Seven months after dumping R&D tax credits, New Zealand’s government looks set to slash funding for agricultural and food research, according to media speculation ahead of the 28 May budget.

The Dominion Post reports that the National party – leading a right-of-centre coalition – will replace a ten-year NZ$700 million (£270 million) research fund with a three-year NZ$90 million scheme. And, the paper says, the funding is contingent on matching dollars from industry, so may be pared back even further in the recession.

“I’m a little bit bemused by the economic strategy … $30m a year against $1.5b on tarmac for roads [in Auckland]?” says Derek Fairweather, chief executive at Waikato Innovation Park.

Agriculture minister David Carter wouldn’t confirm the $90m figure. But Simon Lovett, a representative for AgResearch (New Zealand’s largest state-owned research institute, focusing on agriculture and biotechnology), said that Carter had indicated the replacement scheme in a paper presented to a Waikato agricultural advisory committee, the Post says.

Before it came to power in November 2008 elections, the National party had always pledged to scrap the NZ$700 million ‘Fast Forward’ fund, which was announced in March 2008 by the then-ruling left-of-centre Labour coalition. Labour said it would boost innovation in food and agricultural science, and with interest and matching funds from industry, could reach NZ$2 billion. But National leader (now prime minister) John Key said the fund would lead to extra bureaucracy and promised a better deal.

Rumours of Key’s cut-down replacement scheme came on the same day that he appointed the nation’s first chief science adviser, paediatric scientist Peter Gluckman.

“I am sure that Professor Peter Gluckman can make a powerful contribution, but it will hardly be an auspicious start if next week the Government’s replacement for Labour’s $700 million Fast Forward Fund turns out to be a new fund worth just $30 million a year at most. In a time of recession we should be investing more in R&D and innovation, but what the Government seems to be proposing is a fund which will be effectively limited to short-term research,” said opposition research spokeswoman Moana Mackey.