This year’s Budget includes a big boost for research commercialisation, alongside cuts to a range of research funds.
This includes an additional $37 million towards commercialisation and partnerships and an almost $1.5 million increase to funding to support start-up companies.
There is also a reshuffling of money away from previous research funds and into the four new pillars of ‘Priority Research for New Zealand’: environment, health, primary industry and technology.
The SMC asked experts to comment.
Professor Nicola Gaston, Director of the MacDiarmid Institute for Advanced Materials and Nanotechnology, comments:
“It is not a surprise that there is nothing to celebrate in this budget, as it relates to science, research, and university funding. Cuts and reorganisation over the last few years, along with the total cancellation of funding rounds, have done their damage. This year the government have added to the casualty list Ara Ake, New Zealand’s energy innovation centre that was set up in 2020 in New Plymouth to move our energy sector towards a sustainable future. Some irony of that, given the current cost of petrol!
“Most of us in the university sector are just focused on keeping the lights on and preserving the quality of what we offer to our students.
“But now that we are a couple of years into the ‘once in a generation’ science sector reforms, it feels worthwhile to offer overall comment on how these are tracking. I acknowledge that the process was started under a previous government, and my comments then recognised the need for reform. But at that time, I also thought that we had a bi-partisan consensus on the value of science.
“I am not going to argue that science and research funding is more important than education or health funding, or financial support for those who need it – whether through social welfare support or superannuation. The cost of living crisis is hurting many.
“But I am going to insist that the fact we are poor – that we struggle to pay for the basic needs of our society, and with increasing difficulty – is because we have underinvested in the scientific ecosystem over many decades. I have certainly been banging on about our underinvestment in science for over a decade in my commentary to the Science Media Centre!
“The latest step in the science reform process was the report on prioritisation of research areas. As I said then, I think that there is real need to avoid a competitive, divide and conquer mentality of winners and losers. That does not for a minute mean that there are not choices to be made about what we do, and what we do not do. But how we make those choices matters.
“This budget underscores for me the fact that when this government rejected the STRONG advice from the Science System Advisory Group that increased funding was necessary to achieve the objectives of reform, it rejected those objectives. It should have simply postponed the scale of change originally proposed, because it was never willing to pay for the cost of those changes.
“To mix my metaphors: we have been left with a dog’s breakfast, in need of euthanasia.
“Instead, we have had to watch them kill off the Marsden Fund, for so very long the staunch protector of excellence in research in Aotearoa. I wish my final comments in response to them cutting the humanities and social sciences had not been predictive.
“RIP.”
Conflict of interest statement: “Nicola Gaston receives funding from the Tertiary Education Commission as the Director of the MacDiarmid Institute for Advanced Materials and Nanotechnology. She also receives funding from the Marsden Fund. All research funding goes to the University of Auckland to pay the costs of the research she is employed to do.”
Dr Kristie Cameron, Chair; Dr Hadee Thompson-Morrison, Committee Member; and Dr Samantha Heath, Committee Member – Royal Society Te Apārangi Early Career Researcher Forum Committee, comment:
“This budget is uninspiring. Once again, New Zealand continues to underinvest in science and research that the country critically needs to face challenges in times of unprecedented global change. We continue to lag behind other OECD countries in terms of investment in science as a share of GDP, and fall far short of what the evidence demands — New Zealand spends just ~1.5% of GDP on R&D, against an OECD average of ~2.6%.
“A strong system needs a strong pipeline, and early career researchers are where that pipeline is built. Currently, this part of the system is under-resourced, with student grant schemes failing to keep pace with cost-of-living increases.
“The repurposing of funding that has historically been used for mission-led and investigator-led research, into funding for government priorities, along with the recent abolishment of the Marsden fund, would seem to mark the end of blue-skies research in New Zealand. This also represents yet another shifting of the goal posts. For early career researchers especially, shifting gears on already uneven ground is difficult and increases job precarity and insecurity.
“Early career researchers are not just the future of New Zealand science, they are its present, driving the curiosity-led, blue sky research that builds the long-term capability our innovation system depends on. Yet Budget 2026 offers them no new funding, no named pipeline investment, and no credible path to closing the gap with the OECD peers we aspire to match.”
Conflict of interest statements: Dr Cameron: “I am employed as a lecturer and researcher by Unitec. I received funding from the Ministry of Business, Innovation and Employment, however I am commenting in my capacity as a member of the RSTA ECR Forum Committee.” Dr Thompson-Morrison: “I am employed as a Researcher by the Bioeconomy Science Institute which receives funding from the Ministry of Business, Innovation and Employment, however I am commenting in my capacity as a member of the RSTA ECR Forum Committee.” Dr Heath: “I am employed by the University of Waikato as a senior lecturer. However I am commenting in my capacity as a member of the RSTA ECR Forum Committee.”
Dr James Hutchinson, CEO of KiwiNet, comments:
“Today’s Budget appears to signal a $37.5M uplift in support for research commercialisation and partnerships — but the detail will matter in terms of what this enables on the ground.
“We look forward to seeing more detail from Government on how this funding will be allocated and what it will mean in practice for researchers, institutions and the wider commercialisation ecosystem.
“What is clear is that research commercialisation matters. Great research does not become new products, services, companies or jobs by accident. It takes people, funding, institutional capability and networks to help move ideas from the lab into real-world use.
“We also need to acknowledge that parts of the science system remain under pressure. Commercialisation does not replace the need for strong investment in research — it depends on it.
“The opportunity now is to build on what is working and ensure this investment strengthens the pathway from discovery to impact.”
Conflict of interest statement: “KiwiNet is primarily funded by the Government through the Ministry of Business, Innovation and Employment. Its shareholders are New Zealand universities and publicly funded research organisations.”
Dr Joanne Clapcott, President New Zealand Freshwater Sciences Society, comments:
“Today’s Budget sends a positive signal that science, innovation, and technology are recognised as critical to New Zealand’s future, including our ability to respond to major freshwater, biodiversity, and climate challenges. It is encouraging to see increased investment across parts of the science system, particularly around innovation, partnerships, and technology development. However, we need to keep some perspective on scale. Let’s not forget that New Zealand has historically underinvested in research and development compared with many OECD countries, sitting at around 1.5% of GDP compared with an OECD average closer to 3%. So while the increases announced today are welcome, they are still relatively modest when spread across the breadth of the science and innovation system.
“The Budget also appears to involve significant reprioritisation of existing funds, including Endeavour, Vision Mātauranga, and He Ara Whakahihiko, into the new strategic priority pillars. While there are some positive increases in areas such as commercialisation, industry partnerships, and advanced technologies, environmental sustainability and resilience funding itself appears largely static or slightly reduced.
“There may be opportunities here to strengthen coordination and impact, particularly where innovation supports environmental resilience and practical outcomes for communities. But innovation is not just about technology. It’s also about people, partnerships, and the ability to bring together different knowledge systems to respond to increasingly complex environmental challenges. Maintaining strong partnerships with Māori, communities, and end users will remain essential if we want science to deliver lasting benefits for both the environment and the economy.
“The challenges we face in freshwater, biodiversity, and climate adaptation are long-term challenges. They can’t be solved through short funding cycles alone. Strong science systems are built through sustained investment, trusted relationships, and long-term capability. There is always a risk in science reform that we focus on the shiny new investments while slowly eroding the long-term capability that everything else depends on.”
Conflict of interest statement: “N/A.”
Dr Seohee Ashley Park, Lecturer, School of History, Philosophy, Political Science and International Relations, Victoria University of Wellington, comments:
“I think the most telling signal in budget 2026 is the introduction of a new ‘technology for prosperity’ research pillar. It got 65.8 million NZD to fund advanced technologies and accelerate their adoption across key sectors. The category seems explicit in its commercial orientation such as productivity, sector competitiveness and economic growth.
“In the same budget, the Marsden fund was cut by 5 million NZD from 78.5 million to 73.5 million. The stated reason needs specific look: to enable the broader science, innovation, and technology reforms of which technology for prosperity is a part.
“But then, I would like to ask this question. Marsden funds investigator-led, curiosity-driven research, the kind least likely to be shared by immediate industry demand, and most likely to generate the independent knowledge base needed to critically evaluate emerging technologies including AI. A 5 million reduction may appear modest but the direction it signals matters as much as the number.”
Conflict of interest statement: “None.”
Dr Kyle Higham, Motu Economic and Public Policy Research; Te Pūnaha Matatini, comments:
“This budget asks scientists to do more with less, and then wonders why they leave. The headline change is a wholesale restructure of science funding into two new appropriations: one organising research around thematic priorities chosen by the government, the other bundling ‘system-level support’ into a single block. While perhaps more efficient, this change also conveniently gives the government far more control over the direction of scientific research in this country.
“Because the pie isn’t growing, the Marsden Fund, our only major vehicle for investigator-led blue-sky research, takes yet another cut to make way for these new priorities. We see more and more allocation decisions shifted to hand-picked committees rather than sitting with the researchers actually working at the frontier of knowledge (only some of whom are working on ‘advanced technologies’, it turns out). In short, it appears the powers that be already know where the breakthroughs will come from, and we just need to have some faith in their instincts.
“At the same time, scientists continue to be laid off in droves. PhD graduates ready to contribute to the next big technological leap find the only way to fulfil that dream is to leave the country for good. The government either fundamentally misunderstands the value proposition of scientific research or is willing to permanently hamper long-term economic growth for short-term fiscal optics. You cannot build a knowledge economy while hollowing out the expertise it depends on, and no amount of restructuring or support for commercialisation will compensate for the talent we are choosing to lose. One can only assume governments past and present have collectively misheard Sir Paul Callaghan’s vision for New Zealand: ‘A place where talent wants to leave’.”
Conflict of interest statement: “None.”
Tori McNoe, Head of The Lighthouse, comments:
“A welcome increase puts weight behind a more co-ordinated science system – critical for Aotearoa New Zealand. At The Lighthouse we are interested to see if the investment reaches the part of the system that has been proven to bring out the results the budget is looking for. The Commercialisation Partner Network (CPN) convenes the expertise of researchers, founders, investors and industry that actually turns investment into impact. If a more co-ordinated science system is genuinely where we’re heading, we hope to see this Budget’s intent land in a more strongly resourced CPN.”
Conflict of interest statement: “The Lighthouse is a National Commercialisation Hub, brought to life by MBIE and UniServices.”
Dr Lucy Stewart, Co-President, New Zealand Association of Scientists, comments:
“At the highest level, funding for the science and innovation system was approximately $30 million higher in 2026 than 2025, tracking slightly below inflation pressures. No single area has directly benefited from this increase – it seems to be a much more generalised inflation adjustment. For the first time in some years there are precisely zero new science or research initiatives in the Summary of Initiatives which highlights the Government’s key new funding priorities.
“As signalled in pre-Budget announcements, longstanding funds such as the Endeavour Fund and the Strategic Science Investment Fund are gone, reallocated into entirely new funding pools. Many previously itemised smaller funds such as He Ara Whakahihiko and Science in Society have also been swallowed up into larger appropriations, so it is impossible to comment on whether they will continue in the same way and with what level of funding.
“The Health Research Fund and Catalyst Fund remain at roughly the same funding levels. Seven million dollars has been reallocated from science and innovation contract management to administration and monitoring of business innovation and research.
“The New Zealand Institute for Advanced Technology, announced as a future Public Research Organisation in January 2025 and now seemingly downgraded to a funding provider, receives $40 million. It is notable that its purpose is ‘to undertake research on advanced technology priorities and provide innovation and science services’, not very different to the purposes of Callaghan Innovation, which is still undergoing disestablishment to the tune of a further $28 million of funding in 2026/7, even though its initial closure date of 30 June 2026 is rapidly approaching.
“The best to be said about this budget for researchers is that it does not seem to indicate significantly more pain for the sector in the coming year, leaving aside the question of signalled job cuts as funding is ‘reprioritised’ to the Government’s target research areas, but there’s certainly nothing to write home about.”
Conflict of interest statement: “None at present.”
Rod McNaughton, Professor of Entrepreneurship, University of Auckland Business School, comments:
“Budget 2026 funds parts of the innovation system, but it does not yet tell a convincing story about how New Zealand will turn research, entrepreneurship and Small and Medium-Sized Enterprise (SME) capability into more productive firms.
“Budgets are not just allocations of money. They are also signals. They tell the country what the Government thinks matters, where growth is expected to come from, and who the central actors in the economy are.
“On first reading, Budget 2026 signals fiscal discipline and a focus on infrastructure, energy security, frontline services and vocational education. Those are important economic foundations. But it does not strongly signal that the Government sees SMEs, startups, research commercialisation or entrepreneurial scale-up as central to New Zealand’s productivity challenge.
“New Zealand’s long-run problem is not just public infrastructure or fiscal pressure. It is also weak productivity, uneven firm capability, too few firms growing through innovation at scale, and an underpowered pathway from public research into commercial value.
“There are useful components in the Budget that should be acknowledged. There is funding for science-system investment, commercialisation and partnership, advanced technology, founder support, early-stage capital-market development and small-business services. But the Budget still feels more like a collection of components than a coherent pathway.
“There is also more visible innovation-specific support for startups, early-stage capital and R&D-active firms than for the broad base of SMEs that are struggling with costs, capability constraints and low productivity. Startup support matters, but most New Zealand firms are not venture-backed startups. They are small and medium-sized businesses trying to survive, adopt technology, find staff, improve management capability and lift margins.
“The risk is that we fund parts of the innovation system without designing it from the perspective of the firms that need to use it. The issue is not whether government has programmes, but whether those programmes form a simple, accessible and credible pathway to capability, innovation and growth.”
Conflict of interest statement: “None.”
Professor David Hutchinson, Department of Physics, University of Otago, comments:
“With the restructuring of the science system, the total budget envelope for the ‘replacement’ of Endeavour, etc, including HRC (Health Research Council), looked like an increase from $836M to $910M, which is a positive, nearly 9%, increase. Marsden continues through the previously announced process with a drop of $5M from the $78M in 25/6 to $73M in 26/7).
“Other positives I picked out were an increase in Founder & Start-up Support from $2.7M to $4.1M, and an increase in Industry-Research Connection and Commercialisation from $4.6M to $6.9M. Both positive.
“The Tertiary Education envelope looks a bit static whilst institutions are seeing increasing student numbers (a positive from a fees perspective) and costs. I did note a significant increase in the support of Education as an Export through the increase in support for International Education Programmes (budget $29M 25/6) transferred to International Students and Education Programmes (budget $33M 26/7), so a nearly 14% increase. This may assist tertiary institutions through increases in international fee paying students in the long term, although the total tertiary education appropriation sits at $3.8B for 26/7, down on the just over $4B final budget appropriation for 25/6 (although close to the $3.9B estimated actual for 25/6).”
Conflict of interest statement: “I am a UoO employee, PI in the Dodd-Walls Centre and Quantum Technologies Aotearoa, Chair of the Board of Otago Museum, Chair of the Otago Centre for Bioengineering and Translational Health Strategy Group, Member of the Marsden Fund Council and Convenor of the Physics, Chemistry and Biochemistry Panel of the Marsden Fund.”
Professor Frédérique Vanholsbeeck, director of Te Whai Ao Dodd-Walls Centre for Photonic and Quantum Technologies, comments:
“While acknowledging that funds are being re-prioritized, our Centre is encouraged by the Government’s focus on deep tech and especially the work of the Institute for Advanced Technology.
“We look forward to increased investment in future as the Prime Minister’s Science Innovation and Technology Advisory Council has outlined.
“We’re confident that photonic and quantum technologies can deliver significant prosperity for Aotearoa.”
Conflict of interest statement: “Frédérique Vanholsbeeck receives funding from the Tertiary Education Commission as the Director of Te Whai Ao — Dodd-Walls Centre for Photonics and Quantum Technologies. She also receives funding from the Marsden Fund and the MBIE Endeavour Fund. All research funding goes to the University of Auckland to pay the costs of the research she is employed to do.”
Dr John McDermott, Chair – Independent Research Association of New Zealand (IRANZ) and Executive Director, Motu Economic and Public Policy Research, comments:
“Research is not a luxury for New Zealand – it is part of how we improve productivity, strengthen resilience, support better policy, and create opportunities for future generations. International evidence consistently shows that countries investing in research and development achieve stronger long-term economic performance. But for New Zealand, this is also about maintaining expertise that understands our unique environment, industries, communities and challenges.
“Innovation is not only about developing new technologies. Real-world progress also depends on understanding behaviour, communities, institutions, and how people respond to change. New Zealand benefits from a research system that brings these perspectives together.
“The detail of implementation will matter. Stable settings, clear pathways, and long-term confidence are all important for sustaining a healthy research ecosystem. Periods of structural change, both within Government and the research sector, can create uncertainty across the sector, making clear long-term signals and stable investment settings particularly important.”
Conflict of interest statement: “Dr McDermott’s roles at Motu and IRANZ mean he has a professional and institutional interest in the level and allocation of science funding in the New Zealand Budget. He is commenting in his capacity as a researcher and economist, and his views are his own. Dr McDermott is also a Senior Advisor at Wigram Capital Advisors and a Short Term Expert consultant for the International Monetary Fund.”