David Shearer
R,S&T Spokesperson

15 December 2010
Media Statement

Corporate welfare no way to foster R&D, growth

The fact that our biggest technology manufacturer Fisher & Paykel Appliances did not qualify for a Technology Development Grant shows just what a short-sighted scheme this voucher and grant system is, says Labour Spokesperson on Research, Science and Technology David Shearer.

“Wayne Mapp proudly crowed in Parliament last week that the grant and voucher scheme is oversubscribed. That’s nothing to boast about – it simply means that many deserving companies, which could have been doing more research and development, have missed out,” David Shearer said.

“All of these companies would have qualified for the 15 per cent tax credit introduced by the Labour Government.

“Instead, the National Government abolished the tax credit and set up this system of what is effectively R&D welfare where our most innovative and exciting high-tech companies have to go cap-in-hand to the Government for money.

“Rather than the Government deciding who the winners and losers are under Dr Mapp's new system, smart Kiwi companies – which represent New Zealand’s best chance of paying our way in the world – should be given access to the 15 per cent tax credit and allowed to get on with developing new ideas and business opportunities.

“They are the ones who know their business, who take the risks and work hard to succeed, creating jobs and investment, and ultimately economic growth.

“Companies are also telling me that Wayne Mapp’s R&D money will simply fund the expansion of their businesses rather than be used to develop new R&D and innovation.

“The Australian Government now has a 15 per cent tax credit almost identical to the one Labour developed, but since done away with by National. It is retrograde polices such as National’s R&D corporate welfare policy which risk seeing New Zealand fall further behind the Aussies,” David Shearer said.

ENDS

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