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SMC: Budget 2018 expert round-up

Budget 2018 expert round-up

The Labour Government's first Budget focuses primarily on health, housing and education, but a few new research and innovation initiatives got a look-in.

Health received the lion's share of funding in Grant Robertson's first Budget, with boosts for hospitals around the country and cheaper doctor's visits for kids under 14 and those with Community Services cards. They've also allocated $750 million for building and renovating mould and asbestos-plagued hospitals.

Housing was also at the forefront of this year's Budget — with over $140 million allocated to make homes healthier by retrofitting insulation and installing heaters. Professor Philippa Howden-Chapman from the University of Otago, Wellington saidthe "number of households who will benefit is less than a fifth of the estimated 900,000 households, who currently live in uninsulated homes.

"The budget policy is targeted at low-income home-owners. However, rental properties are in poorer condition and less likely to be insulated than owner-occupied homes."

The government spend in research and innovation was more predictable, with core funding retained, and over $1 billion for the R&D tax incentive announced last month.

Professor Shaun Hendy, director of Te Pūnaha Matatini, told the NZ Herald, “a potential disadvantage of the tax credit to the government is that the better it works, the more it will cost them, and this may mean we are in for fairly conservative series of science and innovation budgets until the effects of the tax credit on the government’s coffers are better understood".

Professor Rod McNaughton from the University of Auckland also cautioned against labelling the R&D tax incentive as a fix-all. "The 12.5% rate is lower than the 15% rate when NZ last had an R&D tax credit in 2008/09, and there are bound to be issues around the application of the 'science test' for eligibility, especially for software firms, and questions about whether the $100,000 expenditure threshold is unfair to start-ups."

Other research areas to receive new funding include the Measurements Standards Laboratory, the National Research Information System and the re-instigation of funding for Growing Up in New Zealand — NZ's contemporary longitudinal child development study — which had been cut last year.

"In a sense", said Associate Professor Nicola Gaston, co-director of The MacDiarmid Institute for Advanced Materials and Nanotechnology, "this is business as usual, but underinvestment in infrastructure is one of the ways in which our science system first loses its international competitiveness".

As part of their coalition agreement with the Greens, the government have also put $100 million into the newly launched Green Investment Fund.

But according to Dr Martin Atkins from the University of Waikato, until the exact design and criteria are known, "it is unclear exactly how much impact it will have on the economic transition to a low-carbon economy".

The provincial growth fund also left experts unsatisfied, with Dr Anna Berka from the University of Auckland saying: "[it's] disappointing in scope; an enormous pot of money for a tree planting programme and a rail project. It seems they have put little thought into how to build and scale existing regional capacity, or how to create synergies between regional development, climate change and conservation objectives.”

Read our expert commentary on the 2018 Budget.

Quoted: Universities NZ
"Without doubt her interest in earthquake-prone buildings and the threat of unreinforced masonry stemmed from her traumatic experience...

“[She] identified an issue of national significance and used her academic credentials and training to research the issue and quickly became a recognised expert on building safety."

University of Canterbury's Professor Steve Weaver
on Dr Ann Brower's work that earned her the 2017 Critic & Conscience of Society Award.

Pharmac v Donald Trump
Last weekend saw Donald Trump going after countries with national drug-buying agencies (like Pharmac) that allows them to negotiate with drug manufacturers for drug bundles resulting in lower prices.

New Zealand was one of the first countries to set up a national drug-buying agency in 1993, with many other countries following our model. Pharmac negotiates with drug companies to get their patented drugs, accepting to take some of the drugs that company manufacturers that are no longer under patent as well. This makes patented drugs cheaper for New Zealanders overall.
The US President claims such practices have made America's drug prices the highest in the world, blaming the rest of the world for pushing up prices at home. He plans to "make fixing this injustice a top priority with every trading partner" by negotiating with other countries to pay more in trade deals like the TPPA.
Former medical director of Pharmac Dr Peter Moodie told Stuff: "Trump's argument that foreign countries have been ripping off drug companies is an argument that drug companies have been using for 20 years." He went on to say profits made by drug companies are "absolutely huge" and much of what they call 'research' was actually marketing.
Prime Minister Jacinda Ardern responded to Trump's comments by saying that Pharmac would be protected in any future trade deals with US, as it has always been.
"We have always been at great pains to protect Pharmac and we will in the future."
This week, public health research from the University of Otago published a paper outlining how to prevent trade and investment treaties are putting public health in the backseat. The researchers, led by Louise Delaney, propose a new framework for designing treaties, placing international health, environmental protection, and human rights as having priority over business interests.

As part of yesterday's Budget announcement, changes to the drug-funding model means that anyone who needs expensive Pharmac-funded drugs will be able to access them from July 1, regardless of their DHB's ability to pay for it (these used to be DHB-dependent).

Policy news & developments

Springs hearing adjourned: The Special Tribunal hearing for a Water Conservation Order application for e Waikoropupū Springs has adjourned until late May or early June to hear final evidence and closing statements.

Tongariro mountain biking: The New Zealand Conservation Authority has approved amendments to the Tongariro National Park Management Plan to allow for mountain biking.

New strain of calicivirus: A new strain of the rabbit calicivirus has been confirmed in a single wild rabbit round on a Marlborough farm - the strain, RHDV2, is widespread in Europe and Australia.

Waikato Mycoplasma: The cattle disease Mycoplasma bovis has been confirmed on a Waikato farm.

Improving NAIT: Work will start immediately to improve New Zealand’s animal tracing system, following failures of the system to prevent the spread of Mycoplasma Bovis.

Hard-line biosecurity on dirty vessels: New Zealand has become the first country in the world to roll out nationwide biofouling rules to stop dirty vessels from contaminating our waters.

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