Professor Ian Town, thank you for your welcome.

My roles as Minister of Research, Science and Technology and Associate Minister for Tertiary Education are linked by a common thread of research. A significant amount of New Zealand's research capability resides in tertiary institutions. You are also responsible for educating, encouraging, and inspiring our upcoming scientists. This combination makes you vital to our economic future.

I am going to talk about three themes in this speech. First, the Government's overarching goals for growth. Second, I will outline some of our education initiatives. Finally, I will outline how we are improving the research, science and technology system.

Our first order of business as Government has been to deliver on our election promises. This was mostly accomplished through Budget 2009, and we especially delivered on our promises for research, science and technology. We increased the Marsden Fund by $8 million, the Health Research Council fund by $9 million and CRI strategic funding by $10 million. These were significant increases in what has been a difficult financial climate.

We also appointed Sir Peter Gluckman as the Prime Minister's Chief Science Adviser. He has taken to this role with tremendous energy and enthusiasm. In a very short time he has become a leading figure in scientific debate throughout New Zealand. This has led to a significant increase in the coverage that research and science gets through the media.

As we transition from delivering on our promises to implementing the next phase of our strategy, the Government has a very clear overarching goal. We want to close the GDP gap with Australia by 2025. Economic growth, especially through high-value exports, is the key to New Zealand's future.

When we look at New Zealand's economic performance over the past 30 years, we see a steady deterioration when compared with Australia. In the early 1980s, we were level-pegging with Australia. Right now, the GDP per capita in New Zealand is about 30% lower than Australia, including Queensland.

I specifically mention Queensland, because it is the state most like New Zealand. It has a similar population, similar economy and its major city is about the size of Auckland. They have made different choices in the past 20 years, and have done better than New Zealand.

Closing this gap in 15 years means New Zealand needs to become a lot more productive, both in overall output and per person. We will have to do better in education and innovation. And we will have to do this in a global competitive environment.

We are tackling this challenge as New Zealand and the world emerges from a prolonged recession. So we have to meet this challenge by focusing the Government's efforts on the best value for money.

Education is about preparing people, particularly young New Zealanders, for their future. We will be ensuring that our education resources are focused on students and their achievement.  The skill development for young people will have a significant long-term impact on New Zealand's economic wellbeing. 

Early childhood education is the beginning. It is the start of the learning process. We need services that respond to needs in our community. We need services that make sure basic skills like holding a pencil, and the very basic numeracy and literacy skills are developed. The earlier that these very basic concepts can be mastered, the more effective schools can be.

Through school, we need to maintain and develop these skills. Numeracy and literacy are the pillars of educational achievement. These are the key priority for this Government. That is why we are publishing and distributing National Literacy and Numeracy Standards this month. We need to have these standards so that we can check these basic, yet essential skills are developed. By the time students start secondary school, these skills should be in place.

The next challenge is to make sure that students leave secondary schools with qualifications that are relevant. Qualifications must have real meaning to pupils, parents, institutions and employers.

Even when students have literacy and numeracy skills, sometimes secondary school is not the best place for them to get to the next level. Too many young people are leaving school without qualifications. Some of them need a different learning environment. Our education system, particularly at secondary level, can seem a bit "one size fits all".

In response to this, the Government is introducing more flexible and innovative ways to support young people through education and into employment.

The Youth Guarantee aims to keep in education young people that otherwise could be left behind. It provides free study towards school-level qualification in polytechnics, wananga and private training establishments. In 2010 and 2011 up to 2000 places will be created for the Youth Guarantee, but the aim is to make the scheme available to all 16 and 17-year-olds.

Trades academies will support young people to achieve through trades and technology programmes. This will be a partnership between schools, training institutions and industry. We will be setting up at least five trade academies by the beginning of 2011.

We are also establishing a tertiary high school at the Manukau Institute of Technology. Eighty year 11 students will maintain links to school activities while studying towards a work-related qualification.

For tertiary education, we have released a draft Tertiary Education Strategy for public discussion. This draft strategy focuses on making tertiary education more responsive to student and labour market needs.

The draft strategy is available through the Ministry of Education website, and the Government is seeking feedback until early November. Participation in education is important. It is also important to focus on lifting education achievement. That is our goal.

The Performance Based Research Fund (PBRF) is a major contributor to our science capability. Universities get by far the largest share of PBRF. Funding for this was also increased in this year's Budget. The PBRF is currently undergoing a regular review.

We will be looking to ensure that researchers whose work has good development and commercialisation potential are not penalised by the PBRF requirements. Science must be able to flourish across a range of possible outcomes.

The "What Do Students Earn After Their Tertiary Education?" study, which is available through the Statistics New Zealand website, shows very clearly those students who complete degree level courses earn 51% more than those who complete level three or lower. Better qualifications lead to better careers, in higher-paying and more productive industries.

So you can see that right through our education system, we are focusing on improving student achievement, and enabling a range of outcomes that lead young people to productive careers.

The next area of achievement I am focused on is the performance of the research, science and technology system. As the Prime Minister said last month, at the launch of the Primary Growth Partnership, "we need to put science at the heart of this National-led Government ".

Innovation is the key to raising economic performance and improving productivity. New Zealand can get some of this growth now by investing in research, infrastructure and economic development. But the long-term gains will come from an educated and highly skilled workforce. We need to lift the level of education in areas which create wealth and encourage innovation. That means we need to train the best scientists we can.

High-quality science education opens up possibilities for our young people. Desirable careers in medicine, engineering and ICT all depend on having quality education in the fundamentals of science.

Students who study science at school are more likely to undertake and attain a tertiary education. New Zealand currently has good secondary school performance in science. The 2006 Programme for International Student Assessment found that we ranked third of 57 countries for scientific literacy. Our students are able to engage with science in a practical way. The role that school science technicians play in enabling a good practical experience of science lifts our performance.

What we also found in that assessment was that New Zealand students are less likely to see how science is important to them. This can be a difficult thing to communicate.

I am working on setting clear priorities for New Zealand science. There are clearly some research areas where this country has to have the scientific capability in order to function properly. These include biotechnology, biosecurity, hazards research, climate change and the environment.  In some of these and other disciplines, we lead the world.

For instance, in August I launched the Natural Hazards Research Platform at GNS Science in Lower Hutt. New Zealand has a clear need to undertake quality hazards science. The risks posed by earthquakes, tsunamis and volcanoes must be understood. The platform gives security of funding and a level of self-determination for scientists.

One of the biggest disincentives to science students has been the lack of a stable career path. By making an area of research a priority, and supporting it with longer-term strategic funding, we can promote these crucial sciences as a long-term career option for students.

Shortly I will be consulting with my colleagues and the science community about the other priority areas for New Zealand research. As well as science priorities, we are simplifying the system. We want to make it easier for science to flow through the economy. We also want to ensure scientists spend more time on research and less time in bureaucratic processes.

Another initiative we are developing is the Prime Minister's Science Prizes. The Prime Minister will make an announcement about these awards later this month. The overall idea behind these awards is to lift the recognition of science in New Zealand. The science community knows the value of science. We need the whole country to share this knowledge. The Prime Minister's Science Prizes will acknowledge the contribution that scientists make and ensure that the wider public understand what this means for us all.

The last area I will focus on is New Zealand's involvement in what is known as "Big Science". The Square Kilometre Array, or SKA, is a science project on a truly amazing scale. It can be compared to the Large Hadron Collider in Europe. The SKA will be hundreds of satellite dishes, with a total surface area of one square kilometre, aimed at peering into deep space.

New Zealand has joined with Australia to bid for the right to host the SKA. We believe it will provide the basis for new high-tech industries and science-based innovation. However, it would also be an inspiring science project in our own country.

The other, more recently developed, and perhaps more crucial mega-science project, is the Global Alliance on Agricultural Greenhouse Gas. The Prime Minister announced this at the UN last month, and other countries are moving quickly to help us shape this alliance.

Agricultural greenhouse gases are a global issue. Tackling them requires a concentration of effort, by countries with particular research strengths.

New Zealand leads research into pastoral greenhouse gas emissions, and so we intend to lead the global effort to understand and mitigate gases from that source. India would lead research on emissions from rice; the US would look at soil carbon and housed livestock, and so on.

These big projects are flagships for science. They put New Zealand into a global context. They will attract considerable scientific interest from around the world, which will benefit all of us. They will also inspire students, in particular, and encourage them in pursuing a career in science. Whether peering into deep space, or working to solve global problems, both projects have the potential to demonstrate the value of science to New Zealanders.

The Government's actions around education and research have been clear. We fulfilled election commitments. We are now focusing education priorities on achievement and meeting future demands, and we are setting priorities around the areas of research that are important to New Zealand. By focusing on these priorities, we will close the production gap with Australia, and deliver a better quality of life to New Zealanders.

Sir Peter Gluckman noted at the recent Australia - New Zealand Leadership Forum that science will be "the central component of changing national attitude, approach, ambition and achievement". The Government shares that vision. We are now putting it into practice.