Finance Minister answers criticisms of R & D tax incentive scheme

Finance Minister Grant Robertson was given the chance to respond to criticisms of his first Budget – including criticisms of the research and development tax credit scheme – when Simon Shepherd questioned him on Newshub’s The Nation.  

He probably didn’t need being reminded that the Budget has been been praised as solid and sensible while critics say it was boring and a bit too timid.

The interviewer brought R & D into the reckoning when he raised questions around the billion dollars in R & D incentives.

The questioning was not as exhaustive as scientists might like.

Simon Shepherd:  “But a company has to spend $100,000 on R & D in a year to qualify. So that’s going to cut out all the small, upcoming tech start-ups, isn’t it?” 

Grant Robertson: “Yeah, there are other means by which they will be able to get funding and get support. The R & D tax incentive is targeted at businesses, giving them some certainty about the spending that they will do.

“We know that internationally, these schemes exist, and we know that if we want to be competitive in getting innovation going, we need a big, large-scale scheme like this. But this is the point – in order to start transforming the economy, we need to lay the base properly.

“R & D tax incentives, the Green Investment Fund, the Provincial Growth Fund, the money we’re putting into transport and infrastructure – they’re the basis of an economic transformation.”

Question: “But there’s been some criticism of first the Provincial Growth Fund – there seems to be just a big pot for forestry and rail and not the kind of transformational technology – clean, green regional technology.” 

Answer: “Well, we’re in the first year of that, and I think as I said on Budget day, I expect the balance and mix of the Provincial Growth Fund to change over the years. But that forestry work will be part of transforming that industry.

“One of the big issues is that we continue to rely on the export of raw commodities. What we want to do through establishing the New Zealand Forestry Service is start to move that industry up the value chain.

“So part of what the Provincial Growth Fund will do is actually move us in to areas of prefabricated timber, adding value to those products in New Zealand. But you’ve got to start somewhere. And the issue we’ve got is that the regions have not been given the attention they should’ve over the last nine years. We are now putting our stake in the ground on that.”

 

Source: The Nation

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