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The Health Research Council’s potentially anti-competitive funding policy

Michael MacAskill made this Official Information request to Megan Woods

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From: Michael MacAskill

Dear Megan,

I am writing to you in your capacity as Minister of Research, Science and Innovation, as one of the two ministers responsible for the Health Research Council, but also with wider responsibility for general science funding policy.

The Health Research Council annually publishes guidelines for its funding applications. The current guidelines, dated August 2021 state that funded salaries “may be increased by a maximum of 3% per annum each year, or by more if specific details of expected promotion are provided and fully justified in Section 4A. Note: the HRC does not consider annual scale increments or across-the-board wage increases as promotions.”

Using current University of Otago pay scales as an example, routine annual progression along pay scale increments can often exceed 3%. For example, the lowest-paid academic salary range is for Assistant Research Fellows. In 2022, a person would start at $50892 on Step 1 of that scale. Over the subsequent two years of the typical duration of an HRC project, a combination of annual progression to Steps 2 and 3 of the scale, along with projected inflation adjustment, would result in annual pay rises of 6.8% and 5.8%. As above, the HRC does not regard such progression as being due to promotion and hence will not fund the full increments in salary, leading to deficits which will compound across the multiple years of a contract. The employer may be bound by existing employment contracts to pay the agreed amounts, with the difference therefore needing to be sourced from other funds. Alternatively, there may be pressure upon precarious HRC-funded researchers to accept lower pay rates than those funded by other agencies. Salary-derived overhead funding on grants is also correspondingly reduced, compounding the extent to which the research organisation must subsidise the cost of the research contract.

This policy appears to be a clear deviation from the government’s long-standing policy of full-cost funding of research, with the research provider, or even individual employees, being required to subsidise the cost of a government research contract.

This HRC policy has been in effect for several years. On behalf of the health research community, I have the following questions:

(1) Does this policy indicate that the government is beginning to resile from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting this policy, which does not (currently) appear to have been enacted by other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good health research, dwarfing other agencies such as private philanthropic health research funders. As such, it is in a near-monopsony position, and like any monopsony, poses a risk of imposing anti-competitive practices upon its suppliers (research organisations). The policy outlined above does indeed seem on the face of it to be a clear attempt at price-fixing, enabled by its monopsony power in the public-good health research market.
(i) Before enacting this policy, did the Heath Research Council seek and receive any advice from the Commerce Commission on its anti-competitive nature?
(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by any other government research funder?

Yours sincerely,

Michael MacAskill
Research Director,
New Zealand Brain Research Institute

Link to this

From: Megan Woods (MIN)
Megan Woods

Kia ora,

On behalf of Hon Dr Megan Woods, thank you for your email.  

While the Minister considers all correspondence to be important, and all
messages are carefully read and considered, it is not always possible to
personally reply to all emails.  As such, the following guidelines apply:

* Invitations and meeting requests will be processed as soon as possible
and a staff member will be in contact with you in due course.
* Requests for official information will be managed in accordance with
the provisions of the Official Information Act 1982, which may include
transfer to a more relevant Minister or agency.
* If your email falls outside of the Minister’s portfolio
responsibilities, expresses a personal view, or is copied to multiple
Members of Parliament, your correspondence will be noted and/or
transferred to another office.

If you are a resident in the Wigram electorate, please
email [1][email address] and the electorate office team
will get back to when they are able.
Thank you for the taking the time to write. 
Ngâ mihi,

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance | MP for
Wigram

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

References

Visible links
1. mailto:[email address]

Link to this

From: Megan Woods (MIN)
Megan Woods

Dear Michael,

 

I am writing to acknowledge receipt of your Official Information Act
request dated 15 October 2021. You have requested the following
information:

"(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

We will endeavour to respond to your request as soon as possible and in
any event no later than 15 November 2021, being 20 working days after the
day your request was received. If we are unable to respond to your request
by then, we will notify you of an extension of that timeframe.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [1][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

From: Michael MacAskill
[mailto:[FOI #17199 email]]
Sent: Friday, 15 October 2021 12:31 PM
To: Megan Woods (MIN) <[email address]>
Subject: Official Information request - The Health Research Council’s
potentially anti-competitive funding policy

 

Dear Megan,

 

I am writing to you in your capacity as Minister of Research, Science and
Innovation, as one of the two ministers responsible for the Health
Research Council, but also with wider responsibility for general science
funding policy.

 

The Health Research Council annually publishes guidelines for its funding
applications. The current guidelines, dated August 2021 state that funded
salaries “may be increased by a maximum of 3% per annum each year, or by
more if specific details of expected promotion are provided and fully
justified in Section 4A. Note: the HRC does not consider annual scale
increments or across-the-board wage increases as promotions.”

 

Using current University of Otago pay scales as an example, routine annual
progression along pay scale increments can often exceed 3%. For example,
the lowest-paid academic salary range is for Assistant Research Fellows.
In 2022, a person would start at $50892 on Step 1 of that scale. Over the
subsequent two years of the typical duration of an HRC project, a
combination of annual progression to Steps 2 and 3 of the scale, along
with projected inflation adjustment, would result in annual pay rises of
6.8% and 5.8%. As above, the HRC does not regard such progression as being
due to promotion and hence will not fund the full increments in salary,
leading to deficits which will compound across the multiple years of a
contract.  The employer may be bound by existing employment contracts to
pay the agreed amounts, with the difference therefore needing to be
sourced from other funds. Alternatively, there may be pressure upon
precarious HRC-funded researchers to accept lower pay rates than those
funded by other agencies. Salary-derived overhead funding on grants is
also correspondingly reduced, compounding the extent to which the research
organisation must subsidise the cost of the research contract.

 

This policy appears to be a clear deviation from the government’s
long-standing policy of full-cost funding of research, with the research
provider, or even individual employees, being required to subsidise the
cost of a government research contract.

 

This HRC policy has been in effect for several years. On behalf of the
health research community, I have the following questions:

 

(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

 

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

 

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

 

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?

 

Yours sincerely,

 

Michael MacAskill

Research Director,

New Zealand Brain Research Institute

 

-------------------------------------------------------------------

 

This is an Official Information request made via the FYI website.

 

Please use this email address for all replies to this request:

[2][FOI #17199 email]

 

Is [3][Megan Woods request email] the wrong address for Official Information
requests to Megan Woods? If so, please contact us using this form:

[4]https://fyi.org.nz/change_request/new?bo...

 

Disclaimer: This message and any reply that you make will be published on
the internet. Our privacy and copyright policies:

[5]https://fyi.org.nz/help/officers

 

If you find this service useful as an Official Information officer, please
ask your web manager to link to us from your organisation's OIA or LGOIMA
page.

 

 

-------------------------------------------------------------------

 

--------------------------------------------------------------------------

References

Visible links
1. mailto:[Megan Woods request email]
2. mailto:[FOI #17199 email]
3. mailto:[Megan Woods request email]
4. https://fyi.org.nz/change_request/new?bo...
5. https://fyi.org.nz/help/officers

Link to this

From: Megan Woods (MIN)
Megan Woods

Dear Michael,

 

I am writing in regards to your Official Information Act request below,
received 15 October 2021.

 

Your request has been transferred to Hon Andrew Little as the information
to which your request relates is believed to be more closely connected
with the functions of the Minister of Health.  In these circumstances, we
are required by section 14 of the Official Information Act 1982 to
transfer your request.

 

You can expect a response from the Minister in due course.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [1][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

 

 

From: Megan Woods (MIN)
Sent: Monday, 18 October 2021 2:14 PM
To: 'Michael MacAskill' <[FOI #17199 email]>
Subject: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing to acknowledge receipt of your Official Information Act
request dated 15 October 2021. You have requested the following
information:

"(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

We will endeavour to respond to your request as soon as possible and in
any event no later than 15 November 2021, being 20 working days after the
day your request was received. If we are unable to respond to your request
by then, we will notify you of an extension of that timeframe.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [2][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

From: Michael MacAskill
[[3]mailto:[FOI #17199 email]]
Sent: Friday, 15 October 2021 12:31 PM
To: Megan Woods (MIN) <[4][email address]>
Subject: Official Information request - The Health Research Council’s
potentially anti-competitive funding policy

 

Dear Megan,

 

I am writing to you in your capacity as Minister of Research, Science and
Innovation, as one of the two ministers responsible for the Health
Research Council, but also with wider responsibility for general science
funding policy.

 

The Health Research Council annually publishes guidelines for its funding
applications. The current guidelines, dated August 2021 state that funded
salaries “may be increased by a maximum of 3% per annum each year, or by
more if specific details of expected promotion are provided and fully
justified in Section 4A. Note: the HRC does not consider annual scale
increments or across-the-board wage increases as promotions.”

 

Using current University of Otago pay scales as an example, routine annual
progression along pay scale increments can often exceed 3%. For example,
the lowest-paid academic salary range is for Assistant Research Fellows.
In 2022, a person would start at $50892 on Step 1 of that scale. Over the
subsequent two years of the typical duration of an HRC project, a
combination of annual progression to Steps 2 and 3 of the scale, along
with projected inflation adjustment, would result in annual pay rises of
6.8% and 5.8%. As above, the HRC does not regard such progression as being
due to promotion and hence will not fund the full increments in salary,
leading to deficits which will compound across the multiple years of a
contract.  The employer may be bound by existing employment contracts to
pay the agreed amounts, with the difference therefore needing to be
sourced from other funds. Alternatively, there may be pressure upon
precarious HRC-funded researchers to accept lower pay rates than those
funded by other agencies. Salary-derived overhead funding on grants is
also correspondingly reduced, compounding the extent to which the research
organisation must subsidise the cost of the research contract.

 

This policy appears to be a clear deviation from the government’s
long-standing policy of full-cost funding of research, with the research
provider, or even individual employees, being required to subsidise the
cost of a government research contract.

 

This HRC policy has been in effect for several years. On behalf of the
health research community, I have the following questions:

 

(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

 

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

 

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

 

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?

 

Yours sincerely,

 

Michael MacAskill

Research Director,

New Zealand Brain Research Institute

 

-------------------------------------------------------------------

 

This is an Official Information request made via the FYI website.

 

Please use this email address for all replies to this request:

[5][FOI #17199 email]

 

Is [6][Megan Woods request email] the wrong address for Official Information
requests to Megan Woods? If so, please contact us using this form:

[7]https://fyi.org.nz/change_request/new?bo...

 

Disclaimer: This message and any reply that you make will be published on
the internet. Our privacy and copyright policies:

[8]https://fyi.org.nz/help/officers

 

If you find this service useful as an Official Information officer, please
ask your web manager to link to us from your organisation's OIA or LGOIMA
page.

 

 

-------------------------------------------------------------------

 

--------------------------------------------------------------------------

References

Visible links
1. mailto:[Megan Woods request email]
2. mailto:[Megan Woods request email]
3. mailto:[FOI #17199 email]
4. mailto:[email address]
5. mailto:[FOI #17199 email]
6. mailto:[Megan Woods request email]
7. https://fyi.org.nz/change_request/new?bo...
8. https://fyi.org.nz/help/officers

Link to this

From: Steph Harding


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Kia ora Michael

 

As the information you have requested is more closely connected with the
functions of the Minister of Health, your Official Information Act request
has been transferred to this office for response. Thank you for your
request, received by this office 27 October 2021.

 

You requested:

 

“(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

 

Pursuant to section 15 (1) of the Act we will endeavour to respond to your
request as soon as possible, and no later than 24 November 2021 being 20
working days after the day your request was received. If we are unable to
respond to your request within this timeframe, we will notify you of an
extension of that timeframe.

 

If you have any queries related to this request, please do not hesitate to
get in touch.

 

Ngâ mihi nui

 

 

Steph Harding
Private Secretary (Health)

 

Office of Hon Andrew Little MP, Minister of Health, Lead Coordination
Minister for the Government’s Response to The Royal Commission’s Report
into the Terrorist Attack on the Christchurch Mosques, Minister for Treaty
of Waitangi Negotiations, Minister Responsible for the NZSIS, Minister
Responsible for the GCSB, Minister Responsible for Pike River Re-entry
Reception +64 4 817 8707 | Ministerial Email
[1][email address] | Web [2]beehive.govt.nz | Postal Freepost
Parliament, Private Bag 18 041, Parliament Buildings, Wellington 6160, New
Zealand

[3]https://xink.io/wp-content/themes/Xink/a...

Please note information about meetings related to the Ministers’
portfolios will be proactively released (this does not include personal or
constituency matters). For each meeting in scope, the summary would list:
date, time (start and finish), brief description, location, who the
meeting was with, and the portfolio. If you attend a meeting with the
Minister on behalf of an organisation, the name of the organisation will
be released. If you are a senior staff member at an organisation, or meet
with the Minister in your personal capacity, your name may also be
released. The location of the meeting will be released, unless it is a
private residence. The proactive release will be consistent with the
provisions in the Official Information Act, including privacy
considerations. Under the Privacy Act 1993 you have the right to ask for a
copy of any personal information we hold about you, and to ask for it to
be corrected if you think it is wrong. If you’d like to ask for a copy of
your information, or to have it corrected, or are concerned about the
release of your information in the meeting disclosure, please contact the
sender. You can read more about the proactive release policy at
[8]https://www.dia.govt.nz/Proactive-Releas...

Authorised by Hon Andrew Little MP, Parliament Buildings, Wellington 6160,
New Zealand

 

From: Megan Woods (MIN)
Sent: Wednesday, 27 October 2021 9:05 AM
To: Michael MacAskill <[FYI request #17199 email]>
Subject: RE: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing in regards to your Official Information Act request below,
received 15 October 2021.

 

Your request has been transferred to Hon Andrew Little as the information
to which your request relates is believed to be more closely connected
with the functions of the Minister of Health.  In these circumstances, we
are required by section 14 of the Official Information Act 1982 to
transfer your request.

 

You can expect a response from the Minister in due course.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [9][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

 

 

From: Megan Woods (MIN)
Sent: Monday, 18 October 2021 2:14 PM
To: 'Michael MacAskill'
<[10][FYI request #17199 email]>
Subject: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing to acknowledge receipt of your Official Information Act
request dated 15 October 2021. You have requested the following
information:

"(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

We will endeavour to respond to your request as soon as possible and in
any event no later than 15 November 2021, being 20 working days after the
day your request was received. If we are unable to respond to your request
by then, we will notify you of an extension of that timeframe.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [11][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

From: Michael MacAskill
[[12]mailto:[FYI request #17199 email]]
Sent: Friday, 15 October 2021 12:31 PM
To: Megan Woods (MIN) <[13][email address]>
Subject: Official Information request - The Health Research Council’s
potentially anti-competitive funding policy

 

Dear Megan,

 

I am writing to you in your capacity as Minister of Research, Science and
Innovation, as one of the two ministers responsible for the Health
Research Council, but also with wider responsibility for general science
funding policy.

 

The Health Research Council annually publishes guidelines for its funding
applications. The current guidelines, dated August 2021 state that funded
salaries “may be increased by a maximum of 3% per annum each year, or by
more if specific details of expected promotion are provided and fully
justified in Section 4A. Note: the HRC does not consider annual scale
increments or across-the-board wage increases as promotions.”

 

Using current University of Otago pay scales as an example, routine annual
progression along pay scale increments can often exceed 3%. For example,
the lowest-paid academic salary range is for Assistant Research Fellows.
In 2022, a person would start at $50892 on Step 1 of that scale. Over the
subsequent two years of the typical duration of an HRC project, a
combination of annual progression to Steps 2 and 3 of the scale, along
with projected inflation adjustment, would result in annual pay rises of
6.8% and 5.8%. As above, the HRC does not regard such progression as being
due to promotion and hence will not fund the full increments in salary,
leading to deficits which will compound across the multiple years of a
contract.  The employer may be bound by existing employment contracts to
pay the agreed amounts, with the difference therefore needing to be
sourced from other funds. Alternatively, there may be pressure upon
precarious HRC-funded researchers to accept lower pay rates than those
funded by other agencies. Salary-derived overhead funding on grants is
also correspondingly reduced, compounding the extent to which the research
organisation must subsidise the cost of the research contract.

 

This policy appears to be a clear deviation from the government’s
long-standing policy of full-cost funding of research, with the research
provider, or even individual employees, being required to subsidise the
cost of a government research contract.

 

This HRC policy has been in effect for several years. On behalf of the
health research community, I have the following questions:

 

(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

 

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

 

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

 

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?

 

Yours sincerely,

 

Michael MacAskill

Research Director,

New Zealand Brain Research Institute

 

-------------------------------------------------------------------

 

This is an Official Information request made via the FYI website.

 

Please use this email address for all replies to this request:

[14][FYI request #17199 email]

 

Is [15][Megan Woods request email] the wrong address for Official
Information requests to Megan Woods? If so, please contact us using this
form:

[16]https://fyi.org.nz/change_request/new?bo...

 

Disclaimer: This message and any reply that you make will be published on
the internet. Our privacy and copyright policies:

[17]https://fyi.org.nz/help/officers

 

If you find this service useful as an Official Information officer, please
ask your web manager to link to us from your organisation's OIA or LGOIMA
page.

 

 

-------------------------------------------------------------------

 

--------------------------------------------------------------------------

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14. mailto:[FYI request #17199 email]
15. mailto:[Megan Woods request email]
16. https://fyi.org.nz/change_request/new?bo...
17. https://fyi.org.nz/help/officers

Link to this

From: Steph Harding


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Kia ora Michael
On behalf of Hon Andrew Little, Minister of Health, thank you for your
Official Information request of 27 October 2021.

 

You requested:

             “(1) Does this policy indicate that the government is
beginning to resile from its commitment to the full-cost-recovery funding
model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

The information requested appears to be more closely associated with the
functions and responsibilities of the Health Research Council. Accordingly
I am transferring your request to the Health Research Council under
section 14(b)(ii) of the Official Information Act 1982.

You have the right, under section 28 of the Act, to ask the Ombudsman to
review this decision to transfer your request for information.

 

Ngâ mihi nui

 

 

Steph Harding
Private Secretary (Health)

 

Office of Hon Andrew Little MP, Minister of Health, Lead Coordination
Minister for the Government’s Response to The Royal Commission’s Report
into the Terrorist Attack on the Christchurch Mosques, Minister for Treaty
of Waitangi Negotiations, Minister Responsible for the NZSIS, Minister
Responsible for the GCSB, Minister Responsible for Pike River Re-entry
Reception +64 4 817 8707 | Ministerial Email
[1][email address] | Web [2]beehive.govt.nz | Postal Freepost
Parliament, Private Bag 18 041, Parliament Buildings, Wellington 6160, New
Zealand

[3]https://xink.io/wp-content/themes/Xink/a...

Please note information about meetings related to the Ministers’
portfolios will be proactively released (this does not include personal or
constituency matters). For each meeting in scope, the summary would list:
date, time (start and finish), brief description, location, who the
meeting was with, and the portfolio. If you attend a meeting with the
Minister on behalf of an organisation, the name of the organisation will
be released. If you are a senior staff member at an organisation, or meet
with the Minister in your personal capacity, your name may also be
released. The location of the meeting will be released, unless it is a
private residence. The proactive release will be consistent with the
provisions in the Official Information Act, including privacy
considerations. Under the Privacy Act 1993 you have the right to ask for a
copy of any personal information we hold about you, and to ask for it to
be corrected if you think it is wrong. If you’d like to ask for a copy of
your information, or to have it corrected, or are concerned about the
release of your information in the meeting disclosure, please contact the
sender. You can read more about the proactive release policy at
[8]https://www.dia.govt.nz/Proactive-Releas...

Authorised by Hon Andrew Little MP, Parliament Buildings, Wellington 6160,
New Zealand

 

 

From: Steph Harding
Sent: Wednesday, 27 October 2021 2:19 PM
To: '[FOI #17199 email]'
<[9][FOI #17199 email]>
Subject: Acknowledgement of your request for Official Information -
ALOIA119

 

Kia ora Michael

 

As the information you have requested is more closely connected with the
functions of the Minister of Health, your Official Information Act request
has been transferred to this office for response. Thank you for your
request, received by this office 27 October 2021.

 

You requested:

 

“(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

 

Pursuant to section 15 (1) of the Act we will endeavour to respond to your
request as soon as possible, and no later than 24 November 2021 being 20
working days after the day your request was received. If we are unable to
respond to your request within this timeframe, we will notify you of an
extension of that timeframe.

 

If you have any queries related to this request, please do not hesitate to
get in touch.

 

Ngâ mihi nui

 

 

Steph Harding
Private Secretary (Health)

 

Office of Hon Andrew Little MP, Minister of Health, Lead Coordination
Minister for the Government’s Response to The Royal Commission’s Report
into the Terrorist Attack on the Christchurch Mosques, Minister for Treaty
of Waitangi Negotiations, Minister Responsible for the NZSIS, Minister
Responsible for the GCSB, Minister Responsible for Pike River Re-entry
Reception +64 4 817 8707 | Ministerial Email
[10][email address] | Web [11]beehive.govt.nz | Postal
Freepost Parliament, Private Bag 18 041, Parliament Buildings, Wellington
6160, New Zealand

[12]https://xink.io/wp-content/themes/Xink/a...

Please note information about meetings related to the Ministers’
portfolios will be proactively released (this does not include personal or
constituency matters). For each meeting in scope, the summary would list:
date, time (start and finish), brief description, location, who the
meeting was with, and the portfolio. If you attend a meeting with the
Minister on behalf of an organisation, the name of the organisation will
be released. If you are a senior staff member at an organisation, or meet
with the Minister in your personal capacity, your name may also be
released. The location of the meeting will be released, unless it is a
private residence. The proactive release will be consistent with the
provisions in the Official Information Act, including privacy
considerations. Under the Privacy Act 1993 you have the right to ask for a
copy of any personal information we hold about you, and to ask for it to
be corrected if you think it is wrong. If you’d like to ask for a copy of
your information, or to have it corrected, or are concerned about the
release of your information in the meeting disclosure, please contact the
sender. You can read more about the proactive release policy at
[17]https://www.dia.govt.nz/Proactive-Releas...

Authorised by Hon Andrew Little MP, Parliament Buildings, Wellington 6160,
New Zealand

 

From: Megan Woods (MIN)
Sent: Wednesday, 27 October 2021 9:05 AM
To: Michael MacAskill <[18][FOI #17199 email]>
Subject: RE: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing in regards to your Official Information Act request below,
received 15 October 2021.

 

Your request has been transferred to Hon Andrew Little as the information
to which your request relates is believed to be more closely connected
with the functions of the Minister of Health.  In these circumstances, we
are required by section 14 of the Official Information Act 1982 to
transfer your request.

 

You can expect a response from the Minister in due course.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [19][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

 

 

From: Megan Woods (MIN)
Sent: Monday, 18 October 2021 2:14 PM
To: 'Michael MacAskill'
<[20][FOI #17199 email]>
Subject: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing to acknowledge receipt of your Official Information Act
request dated 15 October 2021. You have requested the following
information:

"(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

We will endeavour to respond to your request as soon as possible and in
any event no later than 15 November 2021, being 20 working days after the
day your request was received. If we are unable to respond to your request
by then, we will notify you of an extension of that timeframe.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [21][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

From: Michael MacAskill
[[22]mailto:[FOI #17199 email]]
Sent: Friday, 15 October 2021 12:31 PM
To: Megan Woods (MIN) <[23][email address]>
Subject: Official Information request - The Health Research Council’s
potentially anti-competitive funding policy

 

Dear Megan,

 

I am writing to you in your capacity as Minister of Research, Science and
Innovation, as one of the two ministers responsible for the Health
Research Council, but also with wider responsibility for general science
funding policy.

 

The Health Research Council annually publishes guidelines for its funding
applications. The current guidelines, dated August 2021 state that funded
salaries “may be increased by a maximum of 3% per annum each year, or by
more if specific details of expected promotion are provided and fully
justified in Section 4A. Note: the HRC does not consider annual scale
increments or across-the-board wage increases as promotions.”

 

Using current University of Otago pay scales as an example, routine annual
progression along pay scale increments can often exceed 3%. For example,
the lowest-paid academic salary range is for Assistant Research Fellows.
In 2022, a person would start at $50892 on Step 1 of that scale. Over the
subsequent two years of the typical duration of an HRC project, a
combination of annual progression to Steps 2 and 3 of the scale, along
with projected inflation adjustment, would result in annual pay rises of
6.8% and 5.8%. As above, the HRC does not regard such progression as being
due to promotion and hence will not fund the full increments in salary,
leading to deficits which will compound across the multiple years of a
contract.  The employer may be bound by existing employment contracts to
pay the agreed amounts, with the difference therefore needing to be
sourced from other funds. Alternatively, there may be pressure upon
precarious HRC-funded researchers to accept lower pay rates than those
funded by other agencies. Salary-derived overhead funding on grants is
also correspondingly reduced, compounding the extent to which the research
organisation must subsidise the cost of the research contract.

 

This policy appears to be a clear deviation from the government’s
long-standing policy of full-cost funding of research, with the research
provider, or even individual employees, being required to subsidise the
cost of a government research contract.

 

This HRC policy has been in effect for several years. On behalf of the
health research community, I have the following questions:

 

(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

 

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

 

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

 

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?

 

Yours sincerely,

 

Michael MacAskill

Research Director,

New Zealand Brain Research Institute

 

-------------------------------------------------------------------

 

This is an Official Information request made via the FYI website.

 

Please use this email address for all replies to this request:

[24][FOI #17199 email]

 

Is [25][Megan Woods request email] the wrong address for Official
Information requests to Megan Woods? If so, please contact us using this
form:

[26]https://fyi.org.nz/change_request/new?bo...

 

Disclaimer: This message and any reply that you make will be published on
the internet. Our privacy and copyright policies:

[27]https://fyi.org.nz/help/officers

 

If you find this service useful as an Official Information officer, please
ask your web manager to link to us from your organisation's OIA or LGOIMA
page.

 

 

-------------------------------------------------------------------

 

 

--------------------------------------------------------------------------

 

P please consider the environment before you print this email

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[28]smxemail.com

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Link to this

From: Lon, Lana


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Kia ora Michael

 

Please find attached our response to your OIA request.

 

Ngā mihi

 

[1][IMG][2]A close up of Lana Lon
a sign Description
automatically generated Project Manager Ethics

Health Research Council of New Zealand

Te Kaunihera Rangahau Hauora o Aotearoa

PO Box 5541, Victoria Street West, Auckland, New
Zealand 1142

DDI: 64 9 303 5221

Email: [3][email address] | [4]www.hrc.govt.nz

 

Please note, the HRC is based in Auckland and I am working from home
during Alert Level 3. Thank you for your patience and understanding.

 

From: Steph Harding <[email address]>
Sent: Thursday, 4 November 2021 10:59 am
To: [FOI #17199 email]
Subject: FW: Acknowledgement of your request for Official Information -
ALOIA119

 

Kia ora Michael
On behalf of Hon Andrew Little, Minister of Health, thank you for your
Official Information request of 27 October 2021.

 

You requested:

             “(1) Does this policy indicate that the government is
beginning to resile from its commitment to the full-cost-recovery funding
model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

The information requested appears to be more closely associated with the
functions and responsibilities of the Health Research Council. Accordingly
I am transferring your request to the Health Research Council under
section 14(b)(ii) of the Official Information Act 1982.

You have the right, under section 28 of the Act, to ask the Ombudsman to
review this decision to transfer your request for information.

 

Ngā mihi nui

 

 

Steph Harding
Private Secretary (Health)

 

Office of Hon Andrew Little MP, Minister of Health, Lead Coordination
Minister for the Government’s Response to The Royal Commission’s Report
into the Terrorist Attack on the Christchurch Mosques, Minister for Treaty
of Waitangi Negotiations, Minister Responsible for the NZSIS, Minister
Responsible for the GCSB, Minister Responsible for Pike River Re-entry
Reception +64 4 817 8707 | Ministerial Email
[5][email address] | Web [6]beehive.govt.nz | Postal Freepost
Parliament, Private Bag 18 041, Parliament Buildings, Wellington 6160, New
Zealand

[7][IMG][8][IMG][9][IMG][10][IMG][11][IMG]

Please note information about meetings related to the Ministers’
portfolios will be proactively released (this does not include personal or
constituency matters). For each meeting in scope, the summary would list:
date, time (start and finish), brief description, location, who the
meeting was with, and the portfolio. If you attend a meeting with the
Minister on behalf of an organisation, the name of the organisation will
be released. If you are a senior staff member at an organisation, or meet
with the Minister in your personal capacity, your name may also be
released. The location of the meeting will be released, unless it is a
private residence. The proactive release will be consistent with the
provisions in the Official Information Act, including privacy
considerations. Under the Privacy Act 1993 you have the right to ask for a
copy of any personal information we hold about you, and to ask for it to
be corrected if you think it is wrong. If you’d like to ask for a copy of
your information, or to have it corrected, or are concerned about the
release of your information in the meeting disclosure, please contact the
sender. You can read more about the proactive release policy at
[12]https://www.dia.govt.nz/Proactive-Releas...

Authorised by Hon Andrew Little MP, Parliament Buildings, Wellington 6160,
New Zealand

 

 

From: Steph Harding
Sent: Wednesday, 27 October 2021 2:19 PM
To: '[FOI #17199 email]'
<[13][FOI #17199 email]>
Subject: Acknowledgement of your request for Official Information -
ALOIA119

 

Kia ora Michael

 

As the information you have requested is more closely connected with the
functions of the Minister of Health, your Official Information Act request
has been transferred to this office for response. Thank you for your
request, received by this office 27 October 2021.

 

You requested:

 

“(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

 

Pursuant to section 15 (1) of the Act we will endeavour to respond to your
request as soon as possible, and no later than 24 November 2021 being 20
working days after the day your request was received. If we are unable to
respond to your request within this timeframe, we will notify you of an
extension of that timeframe.

 

If you have any queries related to this request, please do not hesitate to
get in touch.

 

Ngā mihi nui

 

 

Steph Harding
Private Secretary (Health)

 

Office of Hon Andrew Little MP, Minister of Health, Lead Coordination
Minister for the Government’s Response to The Royal Commission’s Report
into the Terrorist Attack on the Christchurch Mosques, Minister for Treaty
of Waitangi Negotiations, Minister Responsible for the NZSIS, Minister
Responsible for the GCSB, Minister Responsible for Pike River Re-entry
Reception +64 4 817 8707 | Ministerial Email
[14][email address] | Web [15]beehive.govt.nz | Postal
Freepost Parliament, Private Bag 18 041, Parliament Buildings, Wellington
6160, New Zealand

[16]https://xink.io/wp-content/themes/Xink/a...

Please note information about meetings related to the Ministers’
portfolios will be proactively released (this does not include personal or
constituency matters). For each meeting in scope, the summary would list:
date, time (start and finish), brief description, location, who the
meeting was with, and the portfolio. If you attend a meeting with the
Minister on behalf of an organisation, the name of the organisation will
be released. If you are a senior staff member at an organisation, or meet
with the Minister in your personal capacity, your name may also be
released. The location of the meeting will be released, unless it is a
private residence. The proactive release will be consistent with the
provisions in the Official Information Act, including privacy
considerations. Under the Privacy Act 1993 you have the right to ask for a
copy of any personal information we hold about you, and to ask for it to
be corrected if you think it is wrong. If you’d like to ask for a copy of
your information, or to have it corrected, or are concerned about the
release of your information in the meeting disclosure, please contact the
sender. You can read more about the proactive release policy at
[21]https://www.dia.govt.nz/Proactive-Releas...

Authorised by Hon Andrew Little MP, Parliament Buildings, Wellington 6160,
New Zealand

 

From: Megan Woods (MIN)
Sent: Wednesday, 27 October 2021 9:05 AM
To: Michael MacAskill <[22][FOI #17199 email]>
Subject: RE: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing in regards to your Official Information Act request below,
received 15 October 2021.

 

Your request has been transferred to Hon Andrew Little as the information
to which your request relates is believed to be more closely connected
with the functions of the Minister of Health.  In these circumstances, we
are required by section 14 of the Official Information Act 1982 to
transfer your request.

 

You can expect a response from the Minister in due course.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [23][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

 

 

From: Megan Woods (MIN)
Sent: Monday, 18 October 2021 2:14 PM
To: 'Michael MacAskill'
<[24][FOI #17199 email]>
Subject: OIA21-246: Official Information request - The Health Research
Council’s potentially anti-competitive funding policy

 

Dear Michael,

 

I am writing to acknowledge receipt of your Official Information Act
request dated 15 October 2021. You have requested the following
information:

"(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?"

 

We will endeavour to respond to your request as soon as possible and in
any event no later than 15 November 2021, being 20 working days after the
day your request was received. If we are unable to respond to your request
by then, we will notify you of an extension of that timeframe.

 

Kind regards,

 

Office of Hon Dr Megan Woods

Minister of Housing | Minister of Energy & Resources | Minister of
Research, Science & Innovation | Associate Minister of Finance

 

Phone: 04 817 8705 | Email: [25][Megan Woods request email]

Private Bag 18041 |Parliament Buildings | Wellington 6160 | New Zealand

--------------------------------------------------------------------------

From: Michael MacAskill
[[26]mailto:[FOI #17199 email]]
Sent: Friday, 15 October 2021 12:31 PM
To: Megan Woods (MIN) <[27][email address]>
Subject: Official Information request - The Health Research Council’s
potentially anti-competitive funding policy

 

Dear Megan,

 

I am writing to you in your capacity as Minister of Research, Science and
Innovation, as one of the two ministers responsible for the Health
Research Council, but also with wider responsibility for general science
funding policy.

 

The Health Research Council annually publishes guidelines for its funding
applications. The current guidelines, dated August 2021 state that funded
salaries “may be increased by a maximum of 3% per annum each year, or by
more if specific details of expected promotion are provided and fully
justified in Section 4A. Note: the HRC does not consider annual scale
increments or across-the-board wage increases as promotions.”

 

Using current University of Otago pay scales as an example, routine annual
progression along pay scale increments can often exceed 3%. For example,
the lowest-paid academic salary range is for Assistant Research Fellows.
In 2022, a person would start at $50892 on Step 1 of that scale. Over the
subsequent two years of the typical duration of an HRC project, a
combination of annual progression to Steps 2 and 3 of the scale, along
with projected inflation adjustment, would result in annual pay rises of
6.8% and 5.8%. As above, the HRC does not regard such progression as being
due to promotion and hence will not fund the full increments in salary,
leading to deficits which will compound across the multiple years of a
contract.  The employer may be bound by existing employment contracts to
pay the agreed amounts, with the difference therefore needing to be
sourced from other funds. Alternatively, there may be pressure upon
precarious HRC-funded researchers to accept lower pay rates than those
funded by other agencies. Salary-derived overhead funding on grants is
also correspondingly reduced, compounding the extent to which the research
organisation must subsidise the cost of the research contract.

 

This policy appears to be a clear deviation from the government’s
long-standing policy of full-cost funding of research, with the research
provider, or even individual employees, being required to subsidise the
cost of a government research contract.

 

This HRC policy has been in effect for several years. On behalf of the
health research community, I have the following questions:

 

(1) Does this policy indicate that the government is beginning to resile
from its commitment to the full-cost-recovery funding model of research?

 

(2) What are the special circumstances that have led to the HRC adopting
this policy, which does not (currently) appear to have been enacted by
other government agencies?

 

(3) The Health Research Council is a dominant purchaser of public-good
health research, dwarfing other agencies such as private philanthropic
health research funders. As such, it is in a near-monopsony position, and
like any monopsony, poses a risk of imposing anti-competitive practices
upon its suppliers (research organisations). The policy outlined above
does indeed seem on the face of it to be a clear attempt at price-fixing,
enabled by its monopsony power in the public-good health research market.

(i) Before enacting this policy, did the Heath Research Council seek and
receive any advice from the Commerce Commission on its anti-competitive
nature?

(ii) If not, why not?

 

(4) Will this policy be allowed to continue at HRC, or to be adopted by
any other government research funder?

 

Yours sincerely,

 

Michael MacAskill

Research Director,

New Zealand Brain Research Institute

 

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