Key announced the budget’s R&D package today. The fact that it was done a week out and Mapp was pushed out of the limelight signals that this is the good news of the budget. If this is the good news it doesn’t give us much hope for what’s coming.
The bottom line: there is $56 million a year in new money for science and R&D. On the face of it good news and I welcome any support we can give to our scientists and innovators.
But the 15% tax credit that National axed when it came into office gave double the money in today’s announcement. And, we’ve been waiting 18 months and will probably wait another 6 months before the various schemes are actually implemented. That’s two years when our companies could have beefed up their R&D during the recession and rocked out of it. Time wasted.
Most of the new money will be given to companies to do R&D in the form of grants and vouchers. That means they’ll have to apply to some bureaucrat who will decide which company gets money – and which one misses out.
I happen to believe if our most innovative firms put their brains and their butts on the line doing R&D then we should give them a decent tax break. Not ask some risk-averse bureaucrat to make the call. Let’s trust our entrepreneurs. (By the way, Australia just announced 45% tax credits to its most innovative companies).
Our private R&D spend is one-third the OECD average. Today’s package simply ups state spending. Grants for just three years encourage companies to depend on the state. Tax credits encourage companies to invest in R&D and change their investment culture.
Add to that the Government’s axing of the Fast Forward Fund and replacing it with the ‘Primary Growth Partnership’ – a scheme that has yet to pay out one dollar – and it’s pretty clear that today’s fanfare is a small step that won’t even catch up to where we were a few months ago.
Good news? No, sad.