Public sector cuts: Why farmers need scientists - Dr Jacqueline Rowarth

Crown Research Institute cuts will have long term impacts. Photo / Pexels / Chokniti Khongchum

OPINION

The government should think twice before making any public sector cuts affecting Crown Research Institute scientists, as the primary sector needs investment and technology in food and fibre processing, Dr Jacqueline Rowarth writes.

Concerns about the way the New Zealand economy is faltering are real. Whether the cuts in the public service will have the desired outcome remains to be seen, but in the meantime, it is clear that we are going backwards.

StatsNZ has released the productivity data for the year to March 2023, and the news is bad.

Labour productivity fell 0.9 per cent, multifactor productivity fell 2.2 per cent and capital productivity fell 3.8 per cent.

In its press release, StatsNZ explained that a 3.4 per cent increase in labour inputs over the year contributed to a 2.5 per cent rise in output.

This suggested more people achieving not quite as much as before, and overall, multifactor productivity decreased.

In considerable contrast, agriculture, forestry and fishing increased in labour productivity by 7.8 per cent and multifactor productivity by 4.8 per cent.

More output to support people and the export economy for every unit of input, and every dollar earned assists with the balance of payments and the ability to pay off debt.

Treasury has reported that finance costs have increased from both higher interest rates and increased debt.

“In the current financial year, finance costs are forecast in the HYEFU [Half Year Economic and Finance Update] to be $8.8 billion”.

Over the years, the primary sector has continued to lead economic growth.

StatsNZ has shown that on a base of 100 in 1996, primary industry workers in 2023 produced 161.1 goods and services per hour.

The comparable figures for measured-sector service industries workers and goods-producing industry workers were 147.1 and 113.6 goods and services per hour, respectively.

Not included in the StatsNZ data are the public services that are “supplied for free or below economically significant prices, typically by governments or non-profit organisations, such as health care and social assistance, education and training, and public administration and safety”.

These areas have been examined by the Productivity Commission, which emphasised the importance of productivity gains in public services for New Zealand in its 2018 report.

Various changes were suggested, including staff education and training, ensuring information sharing and developing an innovation culture.

In addition, making productivity gains a performance indicator was recommended.

Dr Jacqueline Rowarth. Photo / Supplied

Without efficiency as a KPI, the public sector workforce increased by 15 per cent (compared with a 9 per cent growth in the private sector) over the last five years).

The result of staff numbers escalating is now playing out in the media.

The Productivity Commission was disestablished at the end of February this year, and the current government is now in the process of watching the public services cut their budgets by 6.5 to 7.5 per cent.

Significant numbers of staff have been declared redundant.

Confusingly, the Crown Research Institutes (CRIs) have been caught in the cuts.

Unlike the public service, which supports the Government to implement its policies and deliver services for New Zealanders, the CRIs are charged with carrying out scientific research for the benefit of New Zealand.

Certainly, there are similarities with ministries in administration and business managers, but until recently CRIs have been considered as companies and asked to return a dividend on investment to their shareholders (the Ministers of Science and Finance).

Further, they have been encouraged to address funding shortfalls with commercial contracts.

Unlike the ministries, they have not been expanding staff numbers. Now they are being included in public services.

Cuts in CRI scientist numbers will have long-term impacts.

Listen to Rowena Duncum interview Dr Jacqueline Rowarth on The Country below:

Lincoln University’s Professor Jon Hickford, past president of the New Zealand Institute of Agricultural and Horticultural Science, has said “Driving scientists from their laboratories or field research projects is unlikely to achieve the economic growth that the Government insists is the objective of its public service job cuts.

“On the contrary, it should be spending more on delivering research and development – hiring more of the scientists that the country needs to turn its comparative advantage in natural resources into a competitive advantage.”

Professor Michael E Porter said similar things at the Knowledge Wave Conference, in 2001: “Upgrade New Zealand’s scientific and technological capacity in fields where it can be world-class”.

Porter said doing so would assist in enabling New Zealand to make the transition to an “Innovation-Driven” economy based on our unique assets.

After the conference, then-Prime Minister Helen Clark (speaking with Professor John Hood) said in a statement that “the conference has stimulated new thinking on achieving growth through new approaches to education, innovation, research and development, promoting excellence, networks, mentoring, and building scale and clusters in key industries”.

The transformation of public and private institutions was also mentioned.

Yet over two decades later, the Helen Clark Foundation’s latest document, Pathways to Prosperity, contains the same messages.

The paper suggests that improvements in the primary sector would provide major returns for the country because it dominates New Zealand’s exports, but that to improve productivity and earn more value from export markets, the sector will have to increase investment and technology in food and fibre processing.

Maintaining investment on-farm is also vital – New Zealand’s economy relies on the whole innovation value chain from farm to fork, grass to glass and soil to saliva.

Babies and bathwater come to mind.

• Dr Jacqueline Rowarth, Adjunct Professor Lincoln University, is a public good scientist. She worked in the science and then academic sector until 2016. From 2016-2018 she was part of the Wellington-based public service. She is now a director on the board of governance of DairyNZ, Ravensdown and Deer Industry New Zealand.