KEY POINTS:
John Key is sticking by his criticism of a new $700 million research fund for agriculture, saying it will be scrapped, though the Government has said he has got his facts wrong.
Prime Minister Helen Clark and other Government ministers yesterday said $700 million would come out of capital spending in this year's Budget and be put into a research fund to be called NZ Fast Forward.
The money would be invested, with a portion carved off each year to fund research aimed at adding value to New Zealand's food exports and reducing primary industries' environmental footprint.
The fund would be spent over 10-15 years and could total $1 billion.
Helen Clark said key private industry players had pledged to match Government spending, pushing the fund's total worth to about $2 billion.
Mr Key accused the Government of smoke and mirrors funding and said the only money that would be spent would be the interest, leaving the lump sum untouched.
"This is a gimmick to pick up $700 million on the Reserve Bank balance sheet, invest it in another little pocket and use that interest to make the number look bigger," Mr Key said.
A National government would increase investment in the areas targeted by the fund by more than Labour, but would scrap the fund.
Told the Government maintained the fund would all be spent, Mr Key replied: "Rubbish ... they are wrong."
Agriculture Minister Jim Anderton called for Mr Key to apologise to those who had applauded the announcement.
Backers included Business New Zealand, Royal Society of New Zealand, some individual scientists, Zespri, and Meat and Wool.
The initiative stems from a 2006 report that warned New Zealand producers faced competition from low-cost producers in other countries.
Helen Clark said Mr Key should just admit he was wrong.
"He's offside with the entire primary sector and people who support them with research because they know what this means to the development of those sectors for New Zealand," she said.
- NZPA
