21 October 2008 Media Statement

Labour commits to R&D tax credits and Fast Forward

Prime Minister Helen Clark and Research Science and Technology Minister Pete Hodgson today confirmed Labour’s commitment to significant investment in innovation saying it would produce a step change in New Zealand’s economy.

“Labour believes that science and innovation lie at the heart of a modern society and a modern economy. Over the past nine years the profile of research, science and technology in New Zealand society has risen significantly,” Helen Clark and Pete Hodgson said.

“Our science and innovation policy is driven by our commitment to the largest single investment in R&D in New Zealand’s history. This is the New Zealand Fast Forward fund of $700m. It will be matched by private funding from the food and pastoral sectors, and will create a substantial step change in R&D, ranging from basic environmental research to pre-commercial development over the next 10-15 years.

“We are also confirming our 15 per cent research and development tax credit introduced earlier this year. We consider it a vital tool to lift the level of private sector research and development, and to support those clever businesses which will lead the drive for a higher value and internationally competitive kiwi economy.

“Nearly every nation has a research and development credit of some form to acknowledge the risks inherent in seeking higher economic returns.

“The tax credit alone is predicted to increase New Zealand’s private sector R&D investment from one third of the western world average to two thirds of that average in four years. It is a recipe for a smart economy – not the dumb one favoured by National.

“Across New Zealand people are astounded at National’s short-term and short-sighted policies which would take away support for fast-growing research-driven companies and industries.

“Under Labour, tertiary education is at the very forefront of knowledge development and critical thinking. It plays a vital role in this country’s research and innovation activities. Research, and research extension into industry, is crucial if we are to increase productivity. Labour will also continue to invest in the Performance Based Research Fund, lifting it above $250 million by 2010.

“Labour can be trusted to pursue polices aimed at growth and investment in the New Zealand economy, as we have done since we were elected in 1999. We have a plan for innovation backed by major investment in science, research and development and tertiary education. This is in stark contrast to the National Party who would dumb down the kiwi economy to pay for their tax cuts aimed at benefiting higher income groups,” Helen Clark and Pete Hodgson said.

ENDS

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