BusinessNZ supportive of Greens’ Innovation policy

 Commenting on Green Party policy released today, BusinessNZ Chief Executive Phil O’Reilly said innovation and sustainability were needed in every sector of the economy, not just some, and business would favour policies that supported those goals if fiscally prudent.

 He said business would strongly support the Green Party’s policy of more funding for science and technology teaching.

 The policy announcement includes the funding of an additional 1,000 places at tertiary institutions for those studying engineering, maths, computer science and the physical sciences.  BusinessNZ Chief Executive Phil O’Reilly said the move went to the heart of business’s need for more technically skilled employees. “Business says their top issue is getting enough appropriately skilled staff.  Businesses that are competing through innovation have a critical need for people with technical skills.”

 He said the Greens’ announcement of continued support for direct R&D grants would also be welcomed. “The value of such grants is that they can be directed towards companies with high growth prospects where their industry is aligned strategically with New Zealand’s exporting strengths.  They can also be timed to be of most strategic value, for example late-stage development where a firm has already invested significantly in the early stages of innovative products.

 “There will not be overall agreement with the policy of R&D tax credits for all firms because of distortions arising from their past use, where firms were able to claim credits for expenditure unrelated to research and development, diminishing the amounts actually spent on R&D.  Clearly targeted R&D grants based on company performance and co-investment criteria are a more transparent form of assistance.”

 Other policies, such as requiring firms that go into overseas ownership having to repay their grants, and firms receiving grants agreeing to government taking an equity stake could pose risks, Mr O’Reilly said. “The principle of getting a direct pay-back from assistance is sound, however the logistics of achieving it could be difficult.  Requiring firms being sold overseas to repay their grants could become red tape obstructing them from selling when it might be in their best interest and New Zealand’s strategic interest to sell.   For similar reasons, government taking an equity stake in firms receiving assistance would not be helpful for their ability to move nimbly and strategically.  R&D assistance for one firm in a strategic industry can have multiplier effects in that industry – and this is where the larger benefit from the policy comes from.”

 He said business would welcome the opportunity to continue dialogue with the Green Party on advancing innovation.

 

 

 

Contact: Phil O’Reilly 04 4966552 or Kathryn Asare 021 555 744

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