National’s cuts to R&D will hurt economy

National’s planned cuts to research and development (R&D) funding will further undermine New Zealand’s future economic performance, the Green Party said today.

A Grant Thornton International Business Report survey places New Zealand near the bottom of the table of 34 countries for forward investment in R&D. Only 12 percent of New Zealand businesses expect to increase their investment in R&D – a figure considerably less than our major trading partners China (36 percent), Australia (31 percent), the United States (27 percent) and the United Kingdom (20 percent), the report said.

“The Grant Thornton report reaffirms National’s R&D strategy is failing,” said Green Party Co-leader Dr Russel Norman.

“New Zealand’s record on investing in R&D is poor and the tragedy is that National plans to make it even worse.

“The Draft National Statement of Science Investment details National’s plans to cut government investment in R&D in real terms by 10.2 percent over the next three years and by 21.0 percent out to 2023/24.

“Further real cuts to the Government’s investment in R&D will see New Zealand’s value-added exports fall further behind our competitors.

“We will never achieve prosperity pursuing National’s simple pollution economy strategy – a strategy which is bad for the economy and bad for the environment.

“A smart, green, value-added strategy for our economy is essential for our long-term economic prospects.”

A spokesperson for the Grant Thornton report, Paul Kane, said that there was interest from New Zealand businesses to invest in R&D, but it had to be backed by the Government.

“Steven Joyce’s approach of hand-picking winners of R&D grants is clearly failing to get businesses across the economy investing in R&D,” said Dr Norman.

“By putting himself at the centre of a complex web of R&D funding, the Minister is denying businesses the freedom to innovate on their own terms.

“A mix of R&D tax breaks for all companies and direct R&D grants is the best way forward for Government co-investment in innovation.

“A tax credit creates a level playing field and means businesses can get government support for R&D without all the paperwork, bureaucracy, and favouritism inherent in the current system.

“Innovation is one of the best ways to add value to our exports, raise wages, and better protect our environment.”

More on the Grant Thornton report: