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National punishes the ‘cleverest businesses’

Hon Pete Hodgson
Minister for Economic Development

2 October 2008
Embargoed till 6pm Media Release

National punishes the ‘cleverest businesses’

The National Party’s announcement that it will increase taxation on companies who undertake research and development has been condemned by Economic Development Minister Pete Hodgson as punishing “some of the cleverest businesses in the land.”

Speaking at the Institution of Professional Engineers’ political forum in Hamilton, Mr Hodgson said that claiming $100 million a year in tax off research and development was myopic and would slow economic transformation.

“About 2500 to 3000 businesses will be affected. These are the companies that are most likely to be taking technology to the next level, most likely to be growing quickly and most likely to contribute to tomorrow’s employment growth and tomorrow’s exports.”

“Loading those businesses with just over $100 million of extra tax is ludicrous. We need to use the tax system to lift the level of private sector research and development, which is amongst the lowest in the western world. That is why the 15 percent tax credit for research and development is so vital. It makes our R&D activities internationally competitive.”

“It is hard to imagine why any political party would want to reduce the assistance to those firms by reducing that credit and therefore increasing the taxation they must pay.”

“National is the only party in this election that is looking to increase tax on business, and they’ve chosen some of our best to target.”


ENDS

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