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Budget 2016: The data behind the science and innovation investments

Budget 2016: The data behind the science and innovation investments

Economic Development Minister Steven Joyce explains the backdrop for allotting $761.4 million towards “Innovative New Zealand”.

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.

Steven Joyce

Economic Development Minister Steven Joyce says the Budget 2016 contains the “single biggest investment in science and innovation in a long time”.

A package of $761.4 million is geared towards an “Innovative New Zealand”.

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, says Joyce at the annual Grant Thornton post-Budget forum.

The investment is broken down into:

  • $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.

"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,” says Joyce.

“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.

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“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.”

He notes while there has been a decline in dairy exports in the previous year, overall exports are up by $2 billion, from $67 billion to $69 billion.

“Diversification is happening in front of our eyes," he says, referring to the continuous growth of industries like tourism, international education, food export (beef and wine) and ICT software as a service.

Read more: New regional research centres get $25 million in 2015 Budget

His speech also touched on the social investment side of the budget, explaining the approach of “throwing money into the problem” where investment has significant impact.

He explains how this “cross sector approach” using data is applied in education.

Rather than funding schools by decile, the government is matching data from the Ministry of Social Development with the Department of Education and paying according to the number of kids they have that come from benefit dependent households.

There are 100,000 children in the target group who are spending significant time in a benefit dependent household. There will be increased focus on these students most at risk and their outcomes, he states.

The same data driven approach is applied to other areas of public services. For instance, $200 million are allotted for reform of services for vulnerable children and young people; and $50 million will be used to reduce barriers to employment including for people with complex health conditions.

James Mansell, NZ Data Alliance: Why are we not systematically aggregating data to force (and support) the government to see the full picture to make better social investment decisions?


The investment approach on the social side is a revolutionary way of delivering government services.

Nick Tuffley, ASB

Read more: 2016 World Competitiveness Report: New Zealand lifts rank,ahead of Australia

Game changing approach

"The investment approach on the social side is a revolutionary way of delivering government services," says ASB chief economist Nick Tuffley, another speaker at the post-Budget forum. "It is a game-changing approach to effective policy outcomes."

"Although it has some critics, we think the logic of the social investment approach is pretty compelling," notes KPMG in its comments on Budget2016.

“Effective social intervention is not only good for the people it’s helping - it’s also good for the Government’s books and a more prosperous New Zealand overall.”

KPMG says the social investment approach is also likely to survive the current Government in some form “given that the idea of using data and analysis to inform evidence-based spending decisions is hard to argue with.”

“This is reinforced by the fiscal benefits – reducing future social spending gives future governments more discretion over where government expenditure is applied,” the report states.

Ministry of Social Development wields analytics to cut welfare costs

Send news tips and comments to divina_paredes@idg.co.nz

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Tags Innovative New ZealandinnovationscienceSteven JoyceBudget 2016asb

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