MORENA, GOOD MORNING AND WELCOME TO Q+A. I'M CORIN DANN. BUDGET 2018 SETS OUT THE FIRST STEPS IN A PLAN FOR TRANSFORMATION. BUT WILL GRANT ROBERTSON'S FIRST BUDGET DISAPPOINT THOSE WHO HOPED FOR SOMETHING BIGGER AND BOLDER? I'LL BE ASKING VIZ HEADLINE FINANCE MINISTER GRANT ROBERTSON, WHO'S UP FIRST. AND WE'LL ALSO HEAR FROM NATIONAL'S AMY ADAMS LATER IN THE PROGRAMME. THEN ` ROCKET LAB'S PETER BECK, FOUNDER OF A NEW-ZEALAND-BASED COMMERCIAL SPACE AGENCY, ON WHY NEW ZEALAND ENTREPRENEURS SHOULD BE REACHING FOR THE STARS. THERE'S NOTHING MAGIC IN THE WATER OF SILICON VALLEY. AND WE'LL HAVE ANALYSIS FROM OUR PANEL ` JOSIE PAGANI, SHAMUBEEL EAQUB AND DR WAYNE MAPP. CAPTIONS BY JAKE EBDALE AND SHRUTIKA GUNANAYAGAM. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. COPYRIGHT ABLE 2018 WE'LL GET TO OUR BUDGET COVERAGE IN JUST A MOMENT, BUT FIRST TO A WEDDING WITH A BIGGER BUDGET THAN MOST ` PRINCE HARRY AND MEGAN MARKLE GOT HITCHED OVERNIGHT. THE DUCHESS OF SUSSEX, AS SHE'S NOW KNOWN, WORE A SIMPLE GIVENCHY DRESS. ON HER LONG-FLOWING TRAIN WERE EMBROIDERED FLOWERS FROM EACH OF THE 53 COMMONWEALTH COUNTRIES. FOR NEW ZEALAND, THE KOWHAI WAS REPRESENTED. IN A BREAK FROM TRADITION AT ROYAL WEDDINGS, NO CURRENT HEADS OF STATE WERE THERE, THE CHAPEL PEWS FILLED WITH CELEBRITIES INSTEAD. AND EUROPE CORRESPONDENT JOY REID JOINS ME NOW FROM WINDSOR CASTLE WHERE THE FESTIVITIES ARE STILL UNDERWAY. WAS THE WEDDING A SUCCESS? 100,000 people turned out to witness this event. I would call that a success. The fact that Prince Harry was bringing in Megan Markle, an actress and divorcee, a person who grew up with a relatively normal childhood, people can relate to her in a certain way. This wedding has garnered a certain amount of publicity. Prince Harry is never going to be king, or very unlikely. Him and his brother are that new generation of royals. They go about putting effort into charities in the UK. And by bringing in Megan Markle, they are making it far more relevant. AND THE CEREMONY ITSELF ` WHAT DID YOU THINK, JOY? What stood out for you? It is a ceremony that broke with so many traditions. The ceremony was almost stolen by the US bishop, who came over and gave the main sermon or address. He is an African-American preacher who gave a speech in a gospel like style. Many of the royals haven't seen anything like this in St. George's Chapel. The couple chose how the ceremony was going to run. They had a quiet perform 'stand by me'. Are they hitting the dance floor for the first dance? The party is certainly going on. This is the second wedding reception. Prince Charles is hosting it. We have seen Oprah, the Clooneys. They having another party now for their 200 nearest and dearest. They spending their first night as a married couple inside the castle. THANKS, JOY. You have no review of the constitutional arrangements in New Zealand. We are not moving to a republic any time soon? There is a discussion that will go on for a period of time. This budget, you talked about at trying to be transformational. Looking at how this has landed, it's not exactly Michael Joseph Savage. It is the first steps in the transformation. We can't transform the economy without getting the foundations right. This is what the budget focused on. We have investment in the public services and housing and education. We are moving towards a real 21st-century economy. We move towards a goal being a zero emission economy. We adapt to the future of work and changing technology in the workplace. This budget will be the one that laid the foundations. We have two more. Is the transformation going to see labour and this government move away from those market economy frameworks? You said it is time to throw out the neoliberal agenda and build a genuinely progressive vision for New Zealand. When you make the transformation, will you be able to come on this program and three years and say you have debts neoliberalism? We want to reverse the national government's tax cuts. I don't think we will put it back in and put it back out within our families package. We want to transform the basis of our economy. We have programs and here that a much more hands-on. We are going to the regions and developing them. That doesn't make sense. You have said in the budget that as a percentage of the economy, the government will stay under 30%. You will be less than the last government. It is going to get bigger. It will get smarter. We will invest in those sustainable technologies and industries. We are spending about $1000 per head more than the previous government was spending. We are doing spending and a balanced way. We are keeping the buffer for a rainy day. Having fiscal discipline is not the monopoly of the National party. We are making big social changes. It is an issue around trust and what you are campaigning on. You campaign to throw out the agenda. This isn't Bernie Sanders and Jeremy Corbin. We are transforming in a deliberate way. I watch what happened in the 1980s. There was a snap of the fingers and change in economic direction. We need to go in a methodical way. You are wasting a good crisis. You talked of a crisis and housing and health and mental health. Where is the War footing where the government should deal with this? $4 billion shows we are serious with this. We will keep lifting expenditure on those critical services. We are prepared to put the investment in building our hospitals. $750 million in this budget compared to 150 last budget. We will transform the economy in a way that there is still a place for everyone. You hammered the last government on child poverty. The action group says this budget will not do much. The increases will not do much to alleviate the day-to-day poverty. What is the point of coming into government if you can't make a difference? It will make a difference. The families package is part one. We have 5 � billion dollars going to low and middle income families. $75 better off than the last package. We know there is more to do. We will do that over a sustained period of time. For those who are the working poor, 70,000 will be the average wage and 2022, but they will pay the top tax rate. The gains they might make, they will lose. 70,000 is not a lot. We will be making sure we are helping to meet their cost of living. When it comes to tax, New Zealanders want to know if they will pay tax and get the services and health and education. They want to know if the Department is delivering. The tax working group's job is to come back to us in December and finally April 2019 with ideas for the tax system. Nurses and teachers - you have a contingency pot to pay for their wage demands. $650 million - is that correct? If you look at the full contingency line, it is a bit more than that. This is important. Join the coalition talks, they came back with about $530 million. That is just the collective bargaining. It would be way more after pay equity. You wouldn't have anything left over for a problem. I am wondering if Steven Joyce had a point when he was talking about how tight your budget is. Everyone appreciates we are already in negotiations with nurses and teachers. We will go in with good faith. I will not talk about it on air. There are some ambitious claims from those groups. Will there be any money left over in your contingency for any other problems? There has to be. You are confiding a lot of things together. The pay equity claims will come over a few years. That is interesting because you have just told the teachers you are not getting at this time. The nurse negotiations are very active. What I am saying is we have made provisions for our negotiations, but that is exactly what they are - negotiations. We will see the outcomes and time. You mention about Mycoplasma Bovis and a new way to look after bio security. The issue we have is that we are seeing an increasing number of by security threats. We are in a reactive stance when they come in. We scramble around as a government and as an industry to try and respond. We want to get ahead of those and we have examples of how we get ahead. We have the ACC- you are saying a fund? I have asked Treasury to investigate what their fund would look like. We have to be realistic. We know they are happening regularly. You would want farmers in the industry to put in money as well? They already put in money and response to this. I am saying let's not be reactive; let's plan for it. So a levy instead of a fund? We will sit down with the industry and talk about this. It is early days, but I think as a minister of finance, we will make sure we provide whatever we need to to deal with Mycoplasma Bovis. You seem to want the farmers to drive up the steps of Parliament. You have the water, and now you are suggesting they put a bit into a levy for an EQC fund. Is it too much for them? We have money in the budget to work with farmers for more sustainability. We have more money for that Ministry Primary Industries to work for them. They are facing changes and technology, moving to a lower carbon economy. We need to produce higher paying jobs in New Zealand. I heard you on national radio talking about urban development authority. Trying to get rid of zoning laws in Auckland. Could the authority impulsively acquire land? Other authorities in the world do have those powers. The experience they've had is that they don't need to use them. We are designing the authority. I don't think they would be used, the powers, often. You need the threat? We need a way of breaking through the blockages that of stock developments. Phil Twyford is already working on this. The Auckland urban limit needs to be broken back out. Landowners may face requirements to sell. They are forced to sell. Other authorities in the world haven't use those powers. A new stadium in Auckland? Auckland Council has done some work on the overall stadium strategy. I am happy to keep talking about it. SEND US YOUR THOUGHTS. WE'RE NOT FINISHED WITH THE BUDGET. STAY WITH US. NATIONAL'S FINANCE SPOKESPERSON AMY ADAMS IS NEXT. WELCOME BACK, AND GOOD MORNING TO NATIONAL FINANCE SPOKESPERSON AMY ADAMS. You have called this budget the broken promises budget, but also Tax, Spend and Hope Budget. New Zealanders will be paying an extra $2.4 billion. Just to break down the taxes - they are ones you would have done too. We don't want to increase the tax burden on New Zealanders. We were looking at the amazon tax. You did bring in petrol taxes. You acted in before December. In the first six months, we have more new taxes. They are borrowing billions more. There spending huge amounts more than they said in their fiscal plan. They are breaking promises. It is not because of some sort of crisis in underfunding. They got the numbers completely wrong pre-election. Would you continue with tax cuts in the face of clear signs of poverty. All these issues? Would you continue with tax cuts to wealthy New Zealanders? We could afford to return $1000 a week to the average worker and continue to put funding into health and education. Funding into homelessness and say housing. The most important thing is to make sure people have a good paying job. One of the worst things with this government as they are slowing down the economy. Your leaders say trickle down economics is still working. You have a pie and the money will trickle down. You need an economy that works for everyone. It is not about people at the top. You don't get out of poverty if you don't have a job. How did trickle down work? People who own property in this country got very wealthy. Those wage earners saw barely any wage gains. Wages are growing at twice the rate of inflation. What we saw was 50,000 children being lifted out of poverty. We are committed to doing another 50,000. Those are bolder targets than Jacinda Ardern is saying. We have more aggressive and ambitious targets. We promised 2000 news state houses. They are only promising 1600. We are putting more into health over nine years than this government. You have said this government will ruin the economy. Business confidence is hurting the economy. When do you base that on? Forecasts show a very strong economy. The policies this government is bringing and will not wreck the economy, they are saying. Independent economists are labelling treasuries forecasts as optimistic. Treasury's numbers have gone backwards. You don't back Treasury's findings? You are like Phil Twyford. If you look at the predictions in the market, they are just that. The Treasury ones are stronger than independent economists. GDP growth is a lag indicator. It shows us the strength of the economy in the last few years. We had the settings right. Business confidence is telling you where the economy is going. People are also praising this government for a conservative budget. It is orthodox and not spending too much. People are saying stop being so grumpy because you are not being rational. We are returning to 1970s style industrial law changes. investment into New Zealand. Even Treasury is saying that the GDP growth that they have forecast is only held up because of strong immigration numbers. It has been driven by immigration, industrial law changes, foreign direct investment and new taxes. Are you criticising this government for relying on immigration when your government relied on immigration and housing? Grant Robertson made a big deal about the fact that immigration and the net flow of migrants into New Zealand and what was holding up the economy. We have always argued that you need a good inflow of skilled workers. This is a government that talked one game - they are going the other way. It is rich to say they are relying on immigration. They are breaking promises. They would slash immigration, they said. How would you be a different finance minister? Different than Steven Joyce and Bill English? We have the same values as we come from the same party. You will see what our policies are going into the next election. As the finance minister, you look at the economic conditions you have and think about how you would reduce them. The finance minister's job is to use the economic conditions they have to the best advantage for New Zealand. They have not done that. You need to lay a good foundation. I would argue Grant Robertson is not doing a good job. Bill and Stephen were working through difficult conditions. In strong times, we would want to give back to New Zealanders who can afford it and need it. They were inherently cautious as they went through earthquakes the the global financial crisis. Would you as a minister be bolder? We would not take any more money out of New Zealanders' pockets. This is money that has come out of the pocket of a New Zealander and who has earned it. We would spend effectively and in a targeted way. The numbers that they put a pre-election, that plan has been shredded in this budget. They didn't have the skills. Thank you for your time. There will be an independent panel to decide on numbers to make sure they are all good. OUR PRIORITIES ARE DIFFERENT FROM THE PREVIOUS GOVERNMENT. WE ARE DETERMINED TO TURN THE PAGE ON THE IDEOLOGY OF INDIVIDUALISM AND A HANDS-OFF APPROACH TO THE ECONOMY THAT HAS LEFT FAR TOO MANY PEOPLE BEHIND. (APPLAUSE, SCATTERED CHEERS) That was Grant Robertson from Budget day. LET'S BRING IN OUR PANEL ` JOSIE PAGANI, FORMER LABOUR CANDIDATE, DIRECTOR OF THE COUNCIL FOR INTERNATIONAL DEVELOPMENT; ECONOMIST SHAMUBEEL EAQUB; AND FORMER NATIONAL MINISTER DR WAYNE MAPP. What did we see their front doors to Grant Robertson and Amy Adams? We are not seeing a radical shift from either? Budgets aren't the big news breaking events they used to be. WHAT THEY CAN DO IS set a storyline. They can set a values proposition. Most of that could run over who is spending over various areas and that will go over the top of most people's heads. What people really respond to as the story behind this Budget. Labour have very obviously carefully done this. They recorded an easy listening Budget. It is the Michael Buble Budget. You need some kind of legacy, they shown-building Budget that get people excited. The two promises from the election campaign are colliding in this Budget. One was to be fiscally prudent. Then they say there is a crisis. There is poverty and on equality, and people responded to that. It's like they have said fire and brought one bucket for the fire. They sound a little bit Michael Buble. Do you think there was a case for them to be coming in on a war footing? There can be no doubt there is a deficit andour einfrastructure. They have a fiscal straitjacket date they have imposed on themselves. We have a Labour-light Budget, just like we had from National laughter, which was a Labour light Budget two. What do you think of the description of this as a National-Labour light Budget. They say Grant, they have a completely overblown rhetoric. They bring one bucket of water to it, as Josie says. It is gross over promising and gross under delivering. Look at KiwiBuild half the number of houses in our projected. It is just nonsense, the sort of rhetoric they have relative to the delivery. Where is the transformation in this Budget? I do not see it. You are probably right. It is largely business as usual. Transformative budgets are not business as usual. They have essentially failed on their promise to the public. They have made it hard for National to attack. Business has welcomed this Budget. I think that was the purpose of this Budget. They are taking a longer term view. It was about downplaying those criticisms of being too rushed and too ambitious. In my view, like everybody agrees, the Budget is 3% of governments spending Budget that we are quibbling over. government spends a ton of money. This is a huge amount of money that is being spent. We are quibbling over a small sliver being spent on health. National is struggling to find a line on that. It cannot be both tax and spend and broken Promises. I think when you say rhetoric, Wayne, they ran a election campaign that was popular. I think it was successful, because they were not promising business as usual. Brexit is a promise of disruption and having something that is really groundbreaking. I think Labour have to have more confidence are we in the same situation that we see in America or elsewhere? This level of malaise in the middle class. Is it the same year? I think people want something that is transformational. You can't be a little bit transformational. You cannot be a little bit pregnant. I actually do not think New Zealanders want radical transformation. If they did, National would not be the largest party In Parliament. Their core support essentially remained up. That says to me` we do not have the case for transformational government. That is one of the annoying things to me about the government. They talk as if they have this huge mandate for government. They don't Labour governments are successful when they do the legacy staff of building dams and roads. KiwiSaver and so on. Paid parental leave, 40 hour week. You do not need a working group if you are a Labour government to know that you should increase taxes on well. Do something big on productivity to balance that. Product D is something missing in the dialogue of this Budget. How would the market reacted if Labour had blown its deck target out? The reality is that nobody cares about 19.1 the scent of GDP. it could have been 30, and no one would have blinked. We are far too cautious in New Zealand. Both National and Labour. They are both so devoid of ambition. We have actually done pretty well as a nation. But we can do better. We have done well, and I was Minister of science and innovation. I still think the government has fundamentally under delivered on this. If there was to be one area of transformation that would have everyone support, it would be being serious on that. Peter Beck almost got all of his money out of the United States. New Zealand did not do enough for him. He got some from the Callaghan Institute. But only after he had gotten many times more than that from the United States. We did not do enough for him when he started. There is $1 billion for R&D tax credits. Productivity is very important here., Yes, the economy is important. We work more hours than any other country in the OECD, but we get paid less for it. There could have been something really transformational here about a massive ICT smart infrastructure. Something about foreign` both governments have tried all sorts of stuff to do that. Make it a priority. All the talk of productivity, the reality is the government has not been able to move the needle on that. We need to focus on things the government can actually control, like homelessness and not enough state housing. For a government that has campaigned on that, those other things you can throw money at. There is no centre of urgency. They are saying wait for three years. Already, we're not being ambitious enough, and we have been running on the same state housing stock since 1991. government can also get the incentives right to increase productivity. You will not fix homelessness on 8000 Waitlist. They were also going to sell stuff` Labour has essentially failed on that promise. (ALL TALK AT ONCE) before we go, what should National do in this environment now? They have a government that is being cautious, that is not going to upset business too much when it comes to spending. So they are being quite political. How does a National opposition deal with that? I think the most important thing they could do is kind of relook at the whole innovation infrastructure. We have done some as a nation on both parties, but neither party has done enough, and one of the things you get the Ed Vantage to do in opposition as to rethink the sorts of things, and if we really want to get up to the levels of Singapore, and Finland, we would have to double. It is not just done by a broad brush of an R and D tax credit. We shall wait and see. We will come back to you later in the program. BEFORE WE GO TO THE BREAK, MAKE SURE YOU CHECK OUT MY LATEST 'Q+A BUSINESS' PODCAST ` KIM CAMPBELL FROM THE EMPLOYERS AND MANUFACTURERS ASSOCIATION WITH SAM STUBBS, CHIEF EXECUTIVE OF KIWISAVER PROVIDER 'SIMPLICITY'. IT'S THE LACK OF CERTAINTY OF WHERE IT'S GONNA GO, AND BUSINESS DOESN'T LIKE LACK OF CERTAINTY. AND SO LET'S HOPE THAT WE CAN GET SOME OF THE DETAIL HERE SO THAT THAT AMBIGUITY DISAPPEARS. YEAH, AND, LOOK, AND IT'S A SIMPLE FACT ` WE'RE A GROWING ECONOMY; WE'RE A GROWING POPULATION. YEAH. IN HEALTH, EDUCATION, SOCIAL SERVICES IS GONNA BE ENORMOUS, AND SO I DON'T THINK YOU SHOULD BE AT SURPR` NO. I DON'T THINK YOU SHOULD THINK THIS BUDGET IS AT ALL UNUSUAL IN TERMS OF WHAT IT'S GONNA SPEND ON GROWING THESE THINGS. AN AWFUL LOT OF THAT ACTUALLY WAS JUST NORMAL GROWTH FACTORED IN ANYWAY. YOU'LL FIND IT ON YOUR FAVOURITE PODCAST APP, AND THE VIDEO'S ON OUR WEBSITE TOO ` A COMPLETE CHANGE OF FOCUS AFTER THE BREAK ` ROCKET LAB'S PETER BECK, FOUNDER OF A COMMERCIAL SPACE COMPANY BASED HERE AND THE U.S. HIS ADVICE FOR KIWI ENTREPRENEURS ` GO AFTER THE BIGGEST PROBLEMS, BECAUSE IT IS THE SAME AMOUNT OF WORK WHETHER OR NOT YOU WANT TO BUILD A $100M COMPANY OR A BILLION-DOLLAR COMPANY. THE WORLD HAS ENTERED A NEW SPACE AGE AND IT'S ONE DOMINATED BY COMMERCIAL PLAYERS LIKE ELON MUSK AND NEW ZEALAND'S OWN PETER BECK, FOUNDER AND CEO OF ROCKET LAB. ROCKET LAB MAY HAVE ITS CORPORATE HEADQUARTERS IN CALIFORNIA, BUT IT HAS AROUND 200 STAFF AND ONE OF ITS LAUNCH SITES HERE. I CAUGHT UP WITH PETER BECK ON FRIDAY. I CAUGHT UP WITH PETER BECK ON FRIDAY. HE TOLD ME ROCKET LAB'S LATEST SATELLITE LAUNCH ` DUBBED "IT'S BUSINESS TIME" ` WAS DELAYED, BUT A NEW LAUNCH DATE IS EXPECTED SOON. AND IN TIME, THE COMPANY PLANS TO BE MAKING A LAUNCH EVERY MONTH. This flight marks, really, the first fully commercial flight in full commercial operations, and right now in the world, there's two private companies that are putting spacecraft into orbit. There's Elon Musk's SpaceX and Rocket Lab. And the interesting this is you seem to be able to do it dramatically cheaper. Am I right that they are about 60 million and you're doing it for about 5 million? How have you managed that? It's about a third the rocket, a third regulatory and a third infrastructure. So it's about not just focusing on the rocket. The reason why we're in New Zealand is to achieve the launch frequency and launch cost out of New Zealand that you can't achieve out of the US. But you have to remember they're much larger vehicles. You know, they're quite different in scale. But nevertheless, if you have a spacecraft and you wanna dedicate it right into orbit, globally we are the most affordable right now. Do you think you will be able to hang on to that market advantage? Yeah, I think we're in a pretty strong position. There's a number of companies that are looking to try and create what we have created, but they're years behind. We have a very unique advantage ` not just with the technology, but the location of the launch site in New Zealand. We own and operate the only private orbital launch range in the entire world. Yeah, let's talk about that. So you are technically a US-based company now, aren't you? So you are technically a US-based company now, aren't you? It's not right to say that you're New Zealand-owned. But you've got a lot of staff in New Zealand, and, I guess, the key to your success is that you can launch from here. Yeah, absolutely. I mean, we've been a US company for a number of years now. To embark on a project like this, where it takes hundreds of millions of dollars of capital, raising that kind of capital out of the right investors, you can't do that in New Zealand. But we have a large New Zealand staff in New Zealand. Even though we are headquartered in LA, we have over 200 engineers, scientists and technicians here in New Zealand. And, yeah, the launch site is a critical, critical element of our business and our success, quite frankly. of our business and our success, quite frankly. Let's just go back a bit and talk about how your company developed in New Zealand, because I think that's an interesting space. So you got help, or grants from the likes of the Callaghan Institute, and the government obviously helped with legislation in terms of a space agency in New Zealand. That was, obviously, critical. Yeah, I mean, when we first started out, we raised a small amount of private equity in New Zealand and certainly made great use of the Callaghan grant scheme. And we kind of reached a point in 2013 where we had done a lot of work for various US aerospace firms, and we reached a point where we had the credibility in the industry to go to Silicon Valley and raise the capital that we needed for this project. So when we went to Silicon Valley in 2013, we established a US corporation, and we raised over a couple of hundred million dollars. And you don't think that could've been done here? You couldn't have raised that money here? Absolutely not. The venture capital community in New Zealand is something that needs a lot of work. I do a lot with young entrepreneurs here in New Zealand to try and help them. I've seen many companies destroyed in New Zealand where the venture capital community comes in and takes massively dilutive stakes in companies for very small amounts of capital. They have no ability to follow that capital on when the company needs to grow. And when you actually pick that company up and try to take it global, they're uninvestable because there is so much dilution within the company. We've got a massive amount of money sitting there in the Super Fund and ACC, KiwiSaver. There is plenty of money. Yeah, it's unfortunate that those funds aren't being used to back New Zealand companies. That's for sure. Is there anything that you could do to get them to back New Zealand companies, do you think? In their own right, they've been very, very successful funds from a sovereign wealth perspective. They've done very, very well. But there are some opportunities in New Zealand that on the global stage also do very, very well. So it would be great to see some of those funds invest in some New Zealand entities. In the case of Rocket Lab, we have a tremendous amount of foreign investment, and we create a lot of jobs in this country, but it would also be great to have the full cycle there, where New Zealand is an investor in these significant opportunities. And what I'm trying to do outside Rocket Lab with entrepreneurs and try and build a number of Rocket Labs ` lots of billion-dollar, successful organisations. They talk about what they call the valley of death, don't they? So New Zealand companies ` someone has a great idea, they get it to a certain level, and then they can't get that funding, and then they go offshore. Is that necessarily a bad thing? Would you prefer them to stay here? No, this is where I'm different to` Probably the normal thinking here is that we start off as New Zealand companies, and we get to a point where we start to become globally successful, and to be globally successful, it's very difficult to do that from New Zealand. And what upsets me is a company will go overseas and do very well and be globally successful, and we go, 'Oh, we lost another one.' We shouldn't be doing that. We should be celebrating the fact that the company was so successful that it had to go global. That's where if there's some New Zealand investment in that company, that works very well, and New Zealand does very well out of that investment. What do you think about the issue of`? So you, obviously, benefited from the Callaghan Institute So you, obviously, benefited from the Callaghan Institute in terms of a grant. This new government seems to be leaning` It hasn't completely done away with Callaghan; It hasn't completely done away with Callaghan; it has cut some of its grant funding. But it is going to focus on R&D tax credits. Would that have been useful to you? Of course. Any company undertaking R&D that is subsidised in some way is, of course, very beneficial. I think... it would be great to lift the OECD average. I think New Zealand is very poor on that front. But also just the R&D tax credit is kind of one piece of the pie. There's nothing magic in the water of Silicon Valley. It's almost a cultural change that needs to occur where the R&D tax credits and R&D funding from the government certainly can play a part of that, but I think there's much more to be able to grow a large number of successful billion-dollar organisations. Just going back, I understand you didn't go to university. As an entrepreneur, what's your advice to those budding entrepreneurs out there? How important is it that they are able to sell their idea? Can you give some sense of the things they need to think about? Well, my first piece of advice is ` Well, my first piece of advice is ` always go after the biggest problems, because it's the same amount of work whether or not you want to build a hundred-million-dollar company or a billion-dollar company. It's the same stress; it's the same amount of work, so you may as well not mess around with the small stuff. So go after the really big challenges and get on a plane. Stay in New Zealand if there's a strong geographical advantage to do so, but what I'm passionate about is creating globally successful New Zealand entrepreneurs. And if that's in New Zealand, that's fantastic. If it's overseas, it's also fantastic. And what about that idea that some people will have a great idea but they don't know then how to then sell it or get the funding. What they do then? Do they look for people who can help them with that part of the journey? Yeah. That's all part of a very strong venture capital ecosystem. Those things are what venture capitalists are very, very good at, and that's` You know, you go up to Silicon Valley, and when the investor invests in the company, they're not just piling some money into you and walking away; what they are doing is they're introducing you to the people and the resources that you need to grow your company and be successful, and that's the big bit that's missing. How intimidating is that? Going to Silicon Valley and fronting up with some multibillionaire or whoever it is that might invest in your company? What is that like? For me, it is no big deal. People are people, no matter where they are based in the world and what's behind them. For us, it was really important that we got the Tier 1 Silicon Valley investors. These are the guys that look for the next Google and the Facebooks, and unless you can show a clear path to a billion-dollar organisation, they're just not interested in talking to you. But at the end of the day, that community up there is incredibly motivated and incredibly astute and wonderful to work with. AFTER THE BREAK ` WE'LL LOOK BACK AT AFTER THE BREAK ` WE'LL LOOK BACK AT THE FINANCE MINISTER'S FIRST FORAY INTO POLITICS, TAKING ON NATIONAL OVER THEIR EDUCATION SPENDING. YOUR FEEDBACK NOW ` IN RESPONSE TO AMY ADAM'S CRITICISM OF THE BUDGET, TIM PATE'S TWEETED... CHARLES GOODWIN HAS TWEETED... AND KIRSTEN OLIVER HAS EMAILED SAYING... Let us bring the panel back in now. It is an absolute and all story, Peter Beck. We do need more of him. Getting the money still seems to be a problem. Absolutely. If New Zealand had more people like him, we would be doing a lot better. We would not be number three in the OECD. We would be number one. New Zealand investment fund ` $250 million. It has been that for a decade. If the last Budget had said that we are going to put a billion Dollars into that fund, I would say it it was transformational. It sounds risky. That is the whole point of venture capital. It is not just money that is the problem. What those guys do in the US is that they help you To actually grow your business and connect you to the right things and make you a global business. In New Zealand, many of our investors are not very good at that. I do not think we should pretend the New Zealand government throwing money at that is going to help it. He said that Superfund, , Kiwi saver. Could we see more of that money directed into`? those funds have an obligation to perform to the best obligations. I think it is important when we are talking about productivity That actually finding markets, finding investors from overseas Has to be something this government prioritises. When you ban oil and gas, you are sending A message to foreign investors that they are not welcome in New Zealand. One of the big things we need is more access to capital. Signing the TPP was an excellent move on This government in terms of accessing that. It is 100 million. Take Kiwi saver and the superfund. If that money was channelled through VIV Which is owned by the government and independently managed... you talked about the valley of death. It is quite easy To get two or $3 million in terms of equity from investors. It is super hard to get 10, 15, 20 million or more, and that is the gap. And the government has a job, frankly, to fill that gap. There is nothing that we don't have and are water that can Help us. If you look at Singapore, 50 years ago, They were behind France and Germany in terms of productivity as much as we are today. They caught up. How have countries done that? How do we make better stuff, not just more stuff? That is the challenge. If we are reliant on tourism and milk powder, the two least high-value products you could have` When in fact we have guys like Peter Beck and widgets And batteries and magnets` should we be hopeful That we can get more Peter Beck? New Zealand has a very high degree of innovation. We have to make sure we grow our venture capital industry and take away the dilutive Greedy venture capitalists That occupied this space. Let us bring some of that water from silicon valley here. Thank you very much. GRANT ROBERTSON, OUR LEAD INTERVIEW TODAY, FIRST ENTERED POLITICS AS A STUDENT AT OTAGO UNIVERSITY, EVENTUALLY BECOMING CO-PRESIDENT OF THE NEW ZEALAND UNIVERSITY STUDENTS' UNION. THE '90S WERE A TURBULENT TIME FOR STUDENTS, PROTESTING AGAINST RISING FEES AND STUDENT DEBT. HERE HE IS IN ACTION IN 1996. ...ATTEMPTING TO CONTROL ME. ...TO THE COUNCIL CHAMBER. IT SEEMS TO BE A VERY MINOR ISSUE. ARCHIVE: HEATED WORDS JUST AN HOUR AGO AS UNIVERSITY JUDITH MEDLICOTT ARRIVES TO TALK TO STUDENTS. WE WANT TO JOIN WITH STAFF AND STUDENTS AND COUNCIL ON A COMMON PURPOSE. DISCUSSION CENTRED ON THE GROUND RULES FOR A MEETING WITH A HUNDRED STUDENTS WHO'VE BEEN IN CONTROL OF THE UNIVERSITY REGISTRY BUILDING NOW FOR OVER FIVE DAYS. UP FOR DISCUSSION ARE FEES. WHAT MANY PROTESTERS WANT IS A GUARANTEE THAT FEES WON'T RISE THIS YEAR. THAT'S COMPLETELY IMPOSSIBLE. NO WAY. THE FEES WILL HAVE TO RISE. WE WILL KEEP IT LOW. I MEAN, I THINK THE UNIVERSITY HAS TO DO EVERYTHING IT CAN TO LIMIT GOVERNMENT FUNDING CUTS AND LIMIT THE IMPACT ON STUDENTS, AND I THINK THE STUDENTS HERE WILL BE LOOKING FOR A COMMITMENT FROM MRS MEDLICOTT TO STAND UP TO THE GOVERNMENT AND SAY THAT THESE CUTS ARE UNACCEPTABLE. BUT THE MINISTER, WYATT CREECH, SAYS THE GOVERNMENT SPENDS MORE ON UNIVERSITY STUDENTS THAN ANY OTHER AREA OF EDUCATION. MEANWHILE, THE PROTEST CONTINUES, AND STUDENTS HAVE PROMISED TO MEET WITH MANAGEMENT TOMORROW. I think the cheese rolls have served him all right. He has hardly age. AND SIR LOCKWOOD SMITH WAS EDUCATION MINISTER DURING SOME OF THAT TIME. THIS GOVERNMENT RECENTLY APPOINTED HIM TO THEIR ADVISORY GROUP ON EDUCATION. That is a bit weird. NEXT WEEK WE HAVE AN INTERVIEW WITH EDUCATION MINISTER CHRIS HIPKINS. PLEASE SEND IN ANY QUESTIONS YOU HAVE. MARAE IS NEXT. REMEMBER, Q+A REPEATS TONIGHT JUST AFTER MIDNIGHT. THANKS FOR WATCHING AND THANKS FOR YOUR CONTRIBUTIONS. THOSE WERE THE QUESTIONS AND THOSE WERE THE ANSWERS, THAT'S Q+A. THOSE WERE THE QUESTIONS AND THOSE WERE THE ANSWERS; AT'S Q+A. THOSE WERE THE QUESTIONS AND THOSE WERE THE ANSWERS; THAT'S Q+A. SEE YOU NEXT SUNDAY MORNING AT 9. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. COPYRIGHT ABLE 2018