It is likely the primary sector will need to get used to more Budgets like Budget 2012 over the next couple of years. While the sector continues to support the economy through this elongated period of financial constraint it can only expect targeted investment of what little there is to go round as rural voters do not win or lose elections.
So, looking at the positives for the primary sector in this Budget. The government will continue investment in previously introduced programmes, in particular the Primary Growth Partnership, the Irrigation Acceleration Fund and the Sustainable Farming Fund. Spending levels will be maintained on key priorities like biosecurity and food safety. The government will continue to invest in core science activities through Ministry of Science and Innovation and the Crown Research Institutes.
On the downside, there is little in this Budget to drive new transformational innovation in the sector. There is little to help foster greater industry collaboration. There is little to increase the supply of young, talented people into the primary sector. In reality – and perhaps not surprisingly given the current state of the economy – there is little in the Budget that will help the primary sector to make a step change in its performance.
We have been vocal around the need to target tertiary student funding towards economically valuable courses to ensure a supply of talented people to the primary sector. The reforms of tertiary student funding in Budget 2012 presented an opportunity to take a step in this direction but, sadly, this was not taken.
New Zealand’s innovation performance is well below that of our international peers. A recent World Economic Forum report ranked New Zealand’s innovation system the 27th best in the world highlighting low company spending, lack of access to venture capital and a lack of availability of scientists and engineers as significant issues. As a small player in the food, fibre and timber sectors, New Zealand will only compete effectively if we are more innovative than our competitors.
Initiatives the government can introduce to help to create an environment that addresses the weakness in the innovation environment would be welcome. For instance, facilitating greater access to venture capital through the New Zealand Superannuation Fund, or providing personal tax incentives and grants to leading global scientists to base their research programmes in New Zealand.
The reality is, in the current economic environment, the onus is on commercial companies in the primary sector to commit to investing in the innovation needed to drive the sector forward. If the companies choose to wait for the government to lead the innovation we will in all likelihood be waiting too long and opportunities available will be missed.