$761.4m for an Innovative New Zealand

The Government is making a major investment in growing innovation in Budget 2016, through the Innovative New Zealand package to encourage entrepreneurship, skills and economic growth.

“Innovative New Zealand is a series of 25 initiatives that will see $761.4 million invested over the next four years in science, skills, tertiary education and regional development initiatives. These will help diversify the economy, and support more jobs and higher wages for New Zealanders in the decade ahead,” Economic Development Minister Steven Joyce says.

The package includes:

• $410.5 million for science and innovation, taking the Government’s annual science investment to $1.6 billion by 2020.
• $256.5 million for more tertiary education and apprenticeship programmes, particularly in the areas of science, engineering and agriculture.
• $94.4 million to support regional economic development with initiatives to unlock business opportunities and benefit regional communities.

Innovative New Zealand focuses on growing our science system, producing the 21st century skills New Zealand needs, and encouraging innovation and industry investment in regional New Zealand.

"We have been making very good progress as a country since the Global Financial Crisis. We have been the world’s seventh fastest growing developed economy over the past five years,” Mr Joyce says.

“We have seen over 200,000 jobs created in the last three years, record numbers of highly-skilled graduates, and major growth in new and emerging
hi-tech sectors like the software services sector.

“Now we need to continue that momentum. This package of initiatives will build on the progress we are making and strengthen the diversification that is occurring across the New Zealand economy.”

Innovative New Zealand will increase the Government’s science investment by $410.5 million over four years. As a result, cross-government investment in science will reach $1.6 billion annually by 2019/20.

“This very significant investment shows how committed this Government is to science-led innovation to strengthen and future-proof the New Zealand economy,” Mr Joyce says.

“Innovative New Zealand is a major step towards delivering on the vision of the National Statement of Science Investment, and also supports the Business Growth Agenda, which seeks to grow business investment in R&D to over 1 per cent of GDP.

“Creating a thriving, independent research sector will have a strong impact on New Zealand’s productivity, prosperity and wellbeing.”

Innovative New Zealand also focuses on developing the skilled workforce needed for a 21st century economy.

“We need more skilled people in disciplines like science, engineering, agriculture and the key trades if we are to continue to grow a high-value, diversified New Zealand economy,” Mr Joyce says.

“This Government is continuing to make STEM subjects a priority to make up for historical under-funding of these subjects. Graduates from these subjects make a substantial contribution to productivity.

The total investment includes $132.5 million from base line savings and reprioritised funding in Vote Tertiary Education.

“New Zealand’s employment rate is already the third highest in the OECD, but we have to keep developing the skills of our young people to meet the future needs of New Zealand. We know that we have a constantly evolving economy driven by rapid advances in technology, Innovative New Zealand will help ensure as a country we stay ahead of change.”

The package also includes a series of regional economic development initiatives that will directly benefit communities in regional New Zealand.

Funding will be provided for the Government’s Regional Growth Programme and the Regional Business Partners Programme to help regional New Zealand develop opportunities for new business investment and growth. Funding will also be provided to develop more Regional Research Institutes.

“This dedicated regional investment funding aims to unlock more opportunities for innovation and diversification across New Zealand,” Mr Joyce says. “The key to success is for the Government to help each region build on its own unique mix of economic opportunities and competitive advantages to attract new investment, and grow jobs and incomes.

“The Government will apply its regional funding in partnership with local government, businesses and iwi across regional New Zealand through the Business Growth Agenda and the Regional Growth Programme to help regions capitalise on their economic opportunities.

“Innovative New Zealand is a comprehensive package that adds substantially to the investments previously made in the innovation and skills sectors,” Mr Joyce says.

“The investments the Government is making will provide the capacity to ensure the continued development of a strong diversified economy that enhances the very positive economic performance of New Zealand in recent times.”