In a speech in Wellington yesterday, Mr Key announced the Government would spend another $80 million over four years in encouraging more private sector R&D.
The funding was equivalent to a 14% increase in Callaghan Innovation's R&D co-funding budget and would get the Government closer to its overall target for research and development funding, he said.
And the Budget would provide another $244 million over the next four years to meet growing school rolls and to improve the quality of learning environments.
Four new state schools would be built, along with an investment in three new kura kaupapa Maori schools.
The seven new schools would provide spaces for nearly 4000 extra pupils.
Additionally, over the next year, the Government would fund an extra 241 classrooms at other schools around New Zealand, almost half of them in Auckland.
''This considerable new investment includes the first tranche of the $350 million we promised in the election for new schools and classrooms to meet population growth in and around New Zealand.''
Mr Key said he knew from his own experience that a good education could make a real difference in helping to realise personal potential.
A good education benefited individuals, their families, their communities and the country.
The Government had invested significantly connecting schools to ultra-fast broadband, meaning New Zealand teachers and pupils could access the best online resources from anywhere in the world.
In his speech to a Business New Zealand function, the Prime Minister continued to push his relentless focus on competitiveness of the economy.
''We'll be doing that by maintaining competitive tax rates and delivering better results from public services. And we'll do it by continuing with our wide-ranging reforms under the business growth agenda. These reforms are all about providing a platform for growth and addressing the choke points of a growing economy.''
Now was not the time for New Zealand to rest on its laurels, he said.
Labour leader Andrew Little said the Government was set to rely on regurgitated announcements for this year's Budget.
National had been building up to this year's Budget for seven years, promising a surplus and rewards for years of hard work and cutbacks.
''Kiwis have fulfilled their end of the bargain. They deserve to see the payback.''
Mr Key's speech was the Government trying to dress up business as usual.
The Government's $20 million a year spending on R&D might buy Economic Development Minister Steven Joyce some good photo opportunities at his favourite companies, Mr Little said.
However, it would not make a real difference to the export sector.
To really support innovation, an aggressive tax credit system rewarding innovating businesses was needed.
The Taxpayers Union called the $80 million R&D spending corporate welfare and accused the Government of wasting money.
BUDGET 2015
• $244 million being spent on schools.
• Seven new schools: Two primary schools in Auckland, Rototuna Senior High, in Hamilton; a primary school at Rolleston, near Christchurch.
• Three kura kaupapa Maori schools in Whakatane, Gisborne and Hastings.
• Significant expansions at Hingaia Peninsula School, in Auckland, Papamoa College and Golden Sands School, in Papamoa and Shotover Primary School in Queenstown.
• $80 million over four years on research and development growth grants, administered by Callaghan Innovation. New funding is equivalent to a 14% increase in Callaghan Innovation's total annual R&D grants budget and adds to the $566 million committed over four years for grants in Budget 2013.
