PM Christopher Luxon announces major changes to science and research sector

Thursday, 23 January 2025

Seven Crown Research Institutes will be merged into three Public Research Organisations in the biggest shake up of the science sector in 30 years.

Callaghan Innovation would also be scrapped, with its most important functions moved to other areas.

The changes were announced by Prime Minister Christopher Luxon during his State of the Nation speech on Thursday.

Christopher Luxon has announced a major change to New Zealand’s science and innovation sector as he delivered his annual state of the nation speech on Thursday.

Speaking at a lunch hosted by the Auckland Chamber of Commerce in Auckland, Luxon announced the current seven Crown Research Institutes will be merged into three Public Research Organisations (PROs) that focus on bio-economy, earth sciences, and health and forensic sciences.

With this, an advanced technology PRO will also be established to deliver research, capability and commercial outreach around technologies such as artificial intelligence, quantum computing and synthetic biology.

Completing the changes, the biggest in the sector in 30 years, will be the creation of an advisory council to provide strategic direction and oversight of the system, and the establishment of a new agency, Invest New Zealand, as the Government’s one-stop-shop for foreign direct investment.

Callaghan Innovation, the Crown entity that is tasked with making New Zealand business more innovative, will also be scrapped, with its most important functions moved to other areas.

“Callaghan has simply been spread too thinly across too many functions, leading to poor financial performance and an over-reliance on Crown funding,” Science, Innovation and Technology Minister Judith Collins said in a statement.

The Public Service Association (PSA) criticised the axing of Callaghan Innovation, calling it a restructure on top of a restructure.

Acting National Secretary for the PSA Fleur Fitsimons said it was hard to have confidence in the Government’s latest science strategy when it came with no promise of new funding or commitments to retain the current workforce.

“Our heart goes out to staff at Callaghan Innovation who have already endured a long restructure and now face an uncertain future with the agency to be scrapped entirely,” she said.

In a statement, Callaghan Innovation said they would work hard to support its staff and customers as it implemented the Government’s decision to disestablish the agency.

Luxon said the changes meant New Zealand would be able to operate at the cutting edge, unlocking the jobs and opportunities that come from world-leading research and innovation.

“I want us to commercialise our brilliant ideas, so that our science system makes us all wealthier. Because we are going for growth,” he said.

Growth was a major theme of Luxon’s annual address, something that he came back to repeatedly.

“Economic growth is going to influence every decision I take this year,” he said.

“Driving economic growth is critical for improving our quality of life – strengthening local businesses, lifting incomes, and creating opportunity across New Zealand.

“I want a New Zealand where businesses – big and small – thrive. And make a profit. And pay high wages. And hire more people. And invest in growth.”

Luxon added that there will be plenty of pro-growth reform this year, and that a growing economy meant giving Kiwis more choices, the confidence to find a new job or hire a new staff member, to open a business, or start a family.

During his speech, Luxon also thanked his Finance Minister Nicola Willis, whose efforts he said were already having a positive impact on the economy and New Zealanders.

“It’s thanks to Nicola’s efforts that we are already seeing the dividend of careful spending and responsible economic management, even if so many Kiwis are still doing it so tough.“

Luxon said that wages were growing faster than inflation, food prices were rising slowly, and cost pressures were being sucked out of the economy as a result of his Government’s policies.

Luxon’s speech was immediately criticised in some quarters, however, with the head of the New Zealand Council of Trade Unions (NZCTU) calling it an “exercise in smoke and mirrors”.

NZCTU President Richard Wagstaff said Luxon was deflecting from the reality that he had overseen the worst economic growth in 30 years.

“Luxon wants to ‘go for growth’ but since he and Nicola Willis took power, unemployment has skyrocketed, growth has plummeted, and record numbers of New Zealanders are heading overseas. They have overseen the worst record on economic growth since 1991,” he said.

The Green Party said Luxon was offering New Zealand nothing other than “reheated austerity”.

“Luxon’s stated plan is to magically ‘grow’ out of our problems, while he slashes investment in the very infrastructure and research necessary for any kind of growth. His version of growth costs worker’s livelihoods and a stable climate while lining the pockets of the wealthiest,” co-leader Chlöe Swarbrick said.

“Luxon’s State of the Nation wasn’t a vision for the future. It was a reheat of the rhetoric that’s failed us for more than 40 years.”