Hon Paul Goldsmith
Minister of Science and Innovation
10 May 2017 Media Statement

Budget 2017: $74.6m to further grow business R&D

Science and Innovation Minister Paul Goldsmith has today announced an additional $74.6 million in funding through the Innovative New Zealand programme in Budget 2017 to meet the growing demand for Callaghan Innovation’s research and development (R&D) Growth Grants.

“Encouraging business R&D helps high-tech, innovative Kiwi companies to bring products and ideas to the market sooner, which has significant benefit for export revenues,” says Mr Goldsmith.

“The rise in demand for Growth Grants is a positive sign that businesses are increasing their investment in R&D. This additional funding means a total of $657.2 million is now available over four years through the Growth Grants programme.”

The new funding in Budget 2017 follows on from the $761.4 million investment in Budget 2016 through the Innovative New Zealand package, and continuing investment in science and innovation over a number of years.

New data released earlier this year by Statistics New Zealand showed a significant jump in the amount Kiwi companies are spending on R&D. In the two years to 2016 business R&D increased by 29 per cent and Callaghan Innovation grant recipients increased their own R&D spending by 46 per cent.

“New Zealand companies invested $356 million more on Business R&D in 2016 than they did two years prior, lifting expenditure to the highest level since records began,” says Mr Goldsmith.

“Growing levels of business R&D are likely to increase the productivity of the wider economy as they result in knowledge and technology that can be used by other businesses to generate new industries, higher-value products and higher-skilled jobs.”
Growth Grants provide a predictable, rules-based platform for businesses to increase their investment in R&D and encourages the development of a strong business R&D ecosystem in New Zealand.

“Businesses are lifting their investment in their own R&D, and this boost to Growth Grants funding will assist more Kiwi companies to innovate successfully.”

Notes for Editors:

About the R&D Growth Grants

• R&D Growth Grants are an on-demand, non-discretionary scheme that enables qualifying companies to claim back 20 percent of their eligible R&D expenditure, capped at $5m a year.
• To qualify, a business must commit to spend at least $300,000, and at least 1.5 per cent of revenue, a year on R&D occurring in New Zealand.
• They must also be domiciled in New Zealand and maintain or increase their spending on R&D over the course of the funding. There are clawback provisions should a change occur that reduces the benefit to New Zealand.
• Growth Grants are for three years but after two years, businesses can be granted a further two-year extension of funding.
• Growth Grants are just one of a suite of business innovation services provided through Callaghan Innovation, which include R&D Project Grants for smaller companies and those new to R&D, and R&D Student Grants that give graduates the opportunity to work in innovative companies.

As a result of this announcement Growth Grant funding will increase from:

• $140.3 million in 2016, to;
• $153.9 million in 2017/18
• $161.4 million in 2018/19
• $169.2 million in 2019/20
• $172.8 million in 2020/21

Budget 2017 demonstrates the Government’s ongoing commitment to delivering on the vision set out in the National Statement of Science Investment, which is to create a highly dynamic science system that enriches New Zealand, making a more visible, measurable contribution to our productivity through excellent science.

© Scoop Media