25 July 2002

CRIs Not More Concerned About Profitability Than The Public Good

The co-leader of the Green Party Ms Jeanette Fitzsimons, spoke in a debate on this morning's Radio New Zealand nine to noon programme. The topic involved discussion on the appropriate role of Crown Research Institutes (CRIs).

Ms Fitzsimons referred to "...Government science structured as a corporation under an Act which tells them they must be more concerned about their own profitability than about the public good. I mean they are funded largely by taxpayer money..."

The Association of Crown Research Institutes represents the CRIs. It is not our intention to become involved in party political debate. However, it is important to correct a misunderstanding in Ms Fitzsimon's statement.

1. Funding The nine Crown Research Institutes are owned by the Crown. They derive their revenue from contracts with Government agencies, commercial research contracts and consulting activity.

Collectively, CRIs receive about 55 per cent of their revenue from the government's main science purchase agency, the Foundation for Research, Science and Technology. Individually, a number receive less than half of their revenue from the Foundation.

2. Profitability The Crown Research Act 1992 does not tell CRIs to be more concerned about profitability than about the public good. Indeed, the Act explicitly states the CRIs' purpose to be research, undertaken for the benefit of New Zealand.

The Act sets out the principles by which CRIs have to abide. These are: to pursue excellence in all its activities; to comply with any applicable ethical standards; to promote and facilitate the application of the results of research and technological developments; be a good employer; and exhibit a sense of social responsibility.

The Act requires CRIs, in fulfilling their purpose, to "operate in a financially responsible manner". Financial responsibility is defined as providing an "adequate rate of return on shareholders' funds".

Ends

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