Growth engine chokes to a halt

Budget documents reveal National’s cuts to economic development are three times greater than the loudly-trumpeted increases in R&D funding, Labour’s Economic Development spokesperson David Cunliffe says.

“Vote Science and Innovation has increased by $40 million, but Vote Economic Development has been slashed by $130 million from 2011/12, meaning that $90 million has been cut from new Ministry of Business, Innovation and Employment (MoBIE) before it has even been formed.

“After siphoning all the gas out of the economy for four years, National’s growth engine has finally given up the ghost.

“These large and irrational cuts prove the increase in science funding is a cynical ploy to detract from National’s underlying agenda – visionless contraction, instead of investment.”

“National has published endless laundry lists of glib aspirational statements, but it has never come up with a credible economic development plan,” David Cunliffe said.

“The Government doesn’t care about Canterbury, it doesn’t care about the regions, and with the recently-revealed 17% crash in exports it’s obvious it has been doing nothing to develop offshore markets either.

“MoBIE was always going to be a disaster, because the due diligence which led to its creation was a 16 page political sham courtesy of Steven Joyce.

“Officials will spend the next year ironing out all the problems which the Minister hid under the carpet, and wasting the remaining (much smaller) budget on pointless rebranding exercises such as new signage for the carparks.

“Meanwhile small businesses will go under, people will lose their jobs, and New Zealand will wave goodbye to another 50,000 kiwis at the departure lounge,” said David Cunliffe.

National’s Vote Economic Development cuts include:

$25 million for the development initiatives to achieve economic growth and stability, and improved public sector procurement;
$13.2 million from the Seed Co-investment Fund, established to develop the market for early stage equity finance – that’s a massive two-thirds cut;
$4 million from the Venture Investment Fund, established to increase the rate of formation of new businesses;
$3.7 million from the Regional and Industry Development Fund;
$3.6 million of New Zealand Trade and Enterprise market access assistance for exporters to Japan and the high-growth emerging markets in China and India;
$3.4 million in assistance to New Zealand firms entering high-growth emerging markets in China and India;
$1.1 million support for special events of international scale, such as the Rugby World Cup and the Commonwealth Games.
$1 million to support earthquake-affected Canterbury businesses.