Professor Callaghan, the Alan MacDiarmid Professor of Physical Sciences, said that overall investment in research and development had been increased by a mere $28 million, "even if we ignore the loss of the research and development tax credit and Fast Forward".
The National Government ditched a 15c in the dollar research and development tax credit and scrapped Labour's promised Fast Forward Fund aimed at promoting research to help food and farming.
Fast Forward would have invested $700 million with matching contributions from industries to create a $2 billion fund over 10 to 15 years.
The Government has given an extra $40 million over four years to a "capability fund" for state science companies, $36m over four years to the "blue skies research" Marsden Fund, $32m over four years for health research, $4m over four years for prizes in a Prime Minister's Science competition, and a $16m capital injection in 2011 for a high-speed internet link used by researchers.
Prof Callaghan said New Zealand's per capita investment in research and development languishing at just 0.52 percent of GDP -- "way below that of Australia, the OECD average, and small economies like Finland, Singapore and Denmark, all of whom have built prosperity from innovation".
"If New Zealand is to turbocharge its way out of this recession, we have to develop new export businesses based on knowledge and innovation.
"What we need are significant new investments to build our innovation system," he said.
The budget had not addressed that issue, though a $9 million a year boost to the Marsden Fund -- underwriting fundamental research in sciences and humanities -- was welcome.
Dr Jeff Tallon, an Industrial Research expert on high temperature superconductors, said the budget's treatment of science was "extremely disappointing".
The boost it offered was timid, especially in light of the aggressive stances taken on science and innovation by the US and Australia.
"To turn NZ around, to start catching up in the productivity stakes we actually need major new investment in our science system," he said.
The most useful initiative was a pre-budget appointment of an Auckland researcher, Professor Peter Gluckman, as Prime Minister John Key's chief science adviser, he suggested.
Neville Jordan, president of the national science academy, the Royal Society, said investing in the country's scientists was vital for longterm economic stability and growth.
He was pleased with the boost for the Marsden Fund -- administered by the society -- which took its annual funding to $47 million.
It has 360 active research contracts, and will add another eight project and five fast-start grants for younger researchers.
