The Food and Pastoral Research Fund

The Herald previews today’s announcement of a new fund for the pastoral and food industries.

Details are not yet known, but on the face of it investing in research is a good thing to do. That is potentially a useful contributor to increasing productivity and economic growth.

One beneficial outcome would be research which leads the way to have less methane emissions in the diary industry, as this would reduce out Kyoto liability.  One has to ask of course why didn’t the Government establish this research oh around seven or eight years ago when it confirmed Kyoto, instead of a few months before its third term ends.

The other thing which isn’t clear to me, is why it needs to be a dedicated fund, rather than merely an increase in annual funding.  The simple answer is the political one – because $500 million into a capital fund sounds far more sexy than announcing and extra $35 million a year in research funding. So when you hear the big numbers, remember that is capital, not expenditure.

Cullen also is probably desperately trying to reduce the cash surplus, so he can attack National’s tax cuts as unaffordable, while his own tax cuts will magically be affordable and non-inflationary

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