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Greens seek extra billion to fund economic diversification

Greens seek extra billion to fund economic diversification

By Pattrick Smellie

July 16 (BusinessDesk) - New Zealand needs to invest in science and innovation to reduce its economic reliance on agriculture, the Green Party says, in an election policy announcement that pledges the Greens would spend $1 billion over three years as a first step to "kick-starting a transformational shift in how our economy creates wealth."

Party co-leader Russel Norman released the Greens' "Smart, Green Innovation" policy, offering a range of tax incentives, reforms to innovation grant-making, 1,000 more maths and science students annually, research and development tax grants, and "passive" government investment in promising companies receiving "significant taxpayer funds."

The policy would require companies that receive government assistance and are sold to foreign buyers to repay their grants, as would all businesses that "benefit from public investment," so that funds could be recycled for up and coming new businesses.

The Greens' policies will gain most traction if in a coalition government led by the Labour Party after the Sept. 20 general election, and is broadly compatible with Labour, especially on tax incentives for research and development, which the Greens suggest should be extended to cover "management training for medium-sized New Zealand-owned firms", recognising shortcomings in management skills in many local businesses.

However, numerous elements of the Greens' plan would appeal equally to National, were the two parties to repeat the Memorandum of Understanding arrangement they brokered in 2008-11 and gave the Greens some policy wins, including funding for nationwide home insulation programmes.

Among the Greens' detailed proposals are requiring both the ACC and Government Superannuation funds to plough at least 1 percent of their investment portfolios into a "high technology investment fund", adding 1,000 tertiary education places for maths, engineering, and computer and physical sciences, costed at $50 million annually, and an increase to total science funding rather than a cut in primary sector science to refocus national effort.

The proposed extra $1 billion would ramp up from $100 million in 2015/16 to $500 million by 2017/18 and there would be "greater investment in promising new paths in the ICT, renewable energy, and manufacturing sectors."

A further $20 million would be applied to implementing elements of the current government's 2011 Powering Innovation report, including an educational campaign to promote careers in science, maths and engineering, and spending $11.3 million to re-establish student allowances for post-graduate study.

Elsewhere, the policy proposes a $10 million kick-start fund for social and Maori enterprises and changes to the way stock options are taxed for qualifying start-ups, "recognising the value of 'sweat equity' and assuming the introduction of a comprehensive capital gains tax."

The Greens would also allow "passive investment" by government agencies in promising start-up businesses.


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