Dr Woods confirms the end of Growth Grant programme at end of 2018/19 tax year

Science, Research and Innovation Minister Megan Woods has made plain that the $657.2 million Growth Grant programme will be terminated at the end of the 2018/19 tax year.

Critics of the programme expressed disappointment on Budget Day that Dr Woods had not reaffirmed the phase-out of the grants in favour of the new R&D tax credit.

Taxpayers’ Union Executive Director Jordan Williams, for example, complained that when the Minister announced Labour’s R&D tax credit scheme earlier in the year, she said it would replace the growth grant scheme administered by Callaghan Innovation.

“But buried in the Budget appropriations we see that Callaghan Innovation’s funding for corporate welfare hasn’t been cut by a cent. Not even one,” he said.

“Megan Woods has let down taxpayers, and we will be working day and night to redouble our efforts to defeat this corporate welfare industry that picks winners and favourites, and keeps Callaghan Innovation’s feather-nesters in their taxpayer funded make-work scheme.”

But the Minister’s Office has confirmed to AgScience that – as reported by National Business Review yesterday – the Growth Grant scheme will be closed to new applicants on March 21 2019.

She told the newspaper:

“Businesses with an active Growth Grant on March 31, 2019, will have the option to continue receiving their grant until March 31, 2020.

“A temporary grant scheme mirroring the R&D tax incentive will be implemented to provide support for former Growth Grant recipients with insufficient tax liability to use an R&D tax credit immediately.”

A core focus for Callaghan’s 384 staff is now gone and a sharp round of redundancies is presumably on the way, NBR reported.

But Dr Woods emphasises Callaghan Innovation will have a continuing role in support areas.

“All of Callaghan Innovation’s other services and products, including R&D Project Grants [a smaller scheme that typically tops out at $100,000 per grant compared to Growth Grants’ $15-25m] and R&D Student Grants are not affected by the R&D Tax Incentive,” the minister says.

A minister staffer told AgScience a paper went to Cabinet on April 19 about the R&D Tax Incentive Discussion Document.

The R&D Tax Incentive discussion document and the Growth Grant transition consultation document (HERE) outline the main features of the Government’s proposals.

Submissions are open until 1 June.

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International innovators helped to connect, collaborate and undertake R&D in NZ

Research, Science and Innovation Minister Megan Woods today formally launched the Innovative Partnership programme which aims to attract future-focused international innovators and firms to undertake R&D and develop their products in New Zealand.

Dr Woods said the Government is committed to developing New Zealand as a hub for high-value, knowledge intensive businesses that create value through innovation and R&D.

The Innovative Partnerships programme, which is led by the Ministry of Business, Innovation and Employment, aims to engage with innovative companies that are pushing the boundaries of technology and solving the world’s big problems, and promotes the advantages of working in New Zealand.

“These companies are then connected with the right people, businesses, agencies, research organisations and universities, as well as supported through navigating central and local governments,” says Dr Woods.

The official launch of the programme comes after American innovator Kitty Hawk Corporation, operating in New Zealand as Zephyr Airworks, credited Innovative Partnerships as part of the reason it is testing its revolutionary air taxi technology in New Zealand.

The Innovative Partnerships programme is run by small team of experts dedicated to helping R&D players connect, collaborate and innovate in New Zealand.

While the programme is led by MBIE, several agencies across local and central governments work together to support and facilitate the elements that influence a decision to undertake R&D in New Zealand.

More information on the programme is available here. 

 

Former Labour Minister appointed chair of Callaghan Innovation

Research, Science and Innovation Minister Megan Woods  has announced the appointment of Pete Hodgson as the new Chair of the Callaghan Innovation Board.

Callahan Innovation is the Government’s business innovation agency and offers several  services aimed at accelerating the commercialisation of research.

Mr Hodgson is a former Minister of Research, Science and Technology and Chief Executive of Otago Innovation.

The Minister said she was delighted he has agreed to use his experience in science and technology-based innovation to lead the Board and provide strategic direction to Callaghan Innovation.

She thanked outgoing Chair Sue Suckling for her work over the past five years in leading the establishment and growth of the agency.

Mr Hodgson will begin his new role on April 1 for a period of three years.

It’s not the first job he has landed since the change of government.

Last month Health Minister David Clark sacked the Dunedin Hospital rebuild chairman, Hawke’s Bay consultant Andrew Blair, and appointed Mr Hodgson to lead the project.

Dr Clark told the Otago Daily Times the rebuild needed to be led by a local person.

Mr Hodgson was Dr Clark’s predecessor as MP in Dunedin North, serving from 1990 to 2011.

 

Scientists claim Callaghan Innovation is focused too much on economic gain

Callaghan Innovation has been criticised by some scientists who claim it cares more about economic gain than the science behind it.

The Crown agency was created to strengthen the ties between the science and business community through grants.

But University of Auckland physics professor Shaun Hendy is reported by Radio New Zealand as saying it hadn’t worked well, and there had been too much focus on economic gain.

He wanted the agency to be given a mandate to make broader links.

“Not just with the business sector, but the social sector, the government sector, so right across New Zealand society – Callaghan could be that bridge.

“These days we’ve got to look a lot more broadly. We’ve got to look at social impact – social enterprise for example – and look at the environment as well.”

Callaghan Innovation’s briefing paper to the incoming minister says the agency is projecting an expenditure this year of $307m including $204m on grants.

Radio New Zealand noted the agency had been named in memory of award-winning scientist Sir Paul Callaghan, a leader in the field of nanotechnology and magnetic resonance, and founding director of the MacDiarmid Institute.

He was a champion of science and technology being the key to diversifying New Zealand’s economy.

Nicola Gaston, a principal investigator at the MacDiarmid Institute, told Radio New Zealand she feared that vision had been skewed in recent years.

“I think it was a message that scientists needed to hear at the time … but since he said that we have had so many changes in our science system.

“I feel like we’ve gone too far.”

Dr Gaston said the Government should look at how Callaghan Innovation was running.

“My feeling is there’s just been so much of a one-dimensional push towards increasing commercial research.”

Science and Innovation Minister Megan Woods referred to her Government’s intention to introduce a research and development tax credit. She said this would help keep the ideal balance between research and business.

“The balance between grants and R&D tax credits will tip things and will have businesses able to make a whole lot more of their decisions about the research and development that they’re going to invest in internally without going through the grants process.”

Ms Wood said she had expressed a concern about the funds being held by one organisation.

But although this was a difficult thing to manage, she credited Callaghan with having done a reasonable job of it.

A change in Govt funding policy – but perhaps not before Apple gets a $25m bite

There’s only so much money in the Government’s science funding pot so it’s always worth keeping an eye on how much will be in the pot and who gets how much of it to do what.

At Fairfax’s Stuff site, Science, Research and Innovation Minister Megan Woods has confirmed the Labour, NZ First and Green Government will be reintroducing research and development tax credits.

Under the scheme, companies wanting government money to keep up with technology trends will no longer need to apply for grants from Callaghan Innovation.

Instead they will have the option again of claiming back a credit for privately funded research.

This was portended by Labour’s campaign commitment to a 12.5 per cent tax credit for research and development.

According to the Stuff report (HERE) –

The National Party axed tax credits when it was elected in 2008. They were replaced by Callaghan, which handed out $113 million in grants to hundreds of businesses last year.

Woods did not outline any specific changes to come for Callaghan and, prior to the election, said her party was not proposing any, despite criticising National’s system as “bureaucratic” and “picking winners”.

This week she said she would be meeting with respective government officials – likely from the Ministry of Business, Innovation and Employment and Callaghan – to discuss a roll-out plan for the scheme.

Woods said Callaghan occupied a “really important space” in the innovation industry and more businesses undertaking research and development would be a “huge cause for celebration” for the agency.

Business leaders seem to be welcoming the change.

ManufacturingNZ executive director Catherine Beard said businesses would happily welcome back tax credits, especially those that did not fit Callaghan’s criteria for growth or project grants.

However, she said the Government should ensure that applying for the tax rebates involved little paperwork.

And –

The Manufacturers’ Network (previously named the New Zealand Manufacturers and Exporters Association) chief executive Dieter Adam said it was great to see tax credits return.

But he was concerned that if Labour was only in government for one or two terms, the credits could easily be axed again by the opposition.

“That would be a huge waste,” Adam said.

The Taxpayers Union, meanwhile, is critical of money being dished out under one of the the old Government’s funding programmes.

Union executive director executive director Jordan Williams says the world’s most profitable company is set to receive up to $25 million a year in corporate welfare grants, thanks to Callaghan Innovation’s ‘growth grant’ programme as a consequence of Apple buying  PowerbyProxi, a major recipient of the R&D grants.

Williams said:

“First it was money for Larry Ellison’s Oracle, then French company Gameloft, and now Apple is getting in on the action. Our Government’s corporate welfare schemes make New Zealand a laughing stock. We pay for R&D and don’t even require the results to stay in New Zealand.”

“Designed in California, funded by Kiwi taxpayers. Anything that results from the R&D ends up in the pockets of Apple’s shareholders. It’s nuts.”

“Callaghan Innovation is trying to defend the grants by pointing out that they couldn’t have known the business would be bought by Apple. But that’s mischievous. Korean giant, Samsung, has owned a substantial equity stake since 2013.”