By Clayton Mitchell, New Zealand First Spokesperson for Research and Development.
With its eyes firmly focused on generating a more productive economy and supporting innovation, the Government last week fine-tuned its Research & Development tax credit scheme, to allow loss-making and pre-profit businesses to gain their share of the benefits.
The $1 billion scheme, announced earlier this year, sees businesses able to claim a 15 per cent rebate if spending $50,000 or more on R&D, but this is of little benefit to start-ups and businesses yet to turn in a profit.
We know that some of the most effective R&D activity is delivered by young businesses.
It is only fair that they are able to access the benefits of the scheme.
To that end, broader cash entitlements will now be available to support eligible R&D for businesses in loss.
New Zealand First has always stood for a productivity-focused economy where the outputs of our economy exceeds its inputs. Key to this is innovation. Greater innovation can give an organisation the competitive edge and add real value to their products and services.
In short, we need to encourage investment in great ideas.
The previous Government relied on skyrocketing immigration to inject more money into the economy. We’re focussing on actual measures to build productivity and give businesses the support they need to increase innovation.
New Zealand First set the goal of increasing Research & Development spending to 2 percent of GDP over 10 years, and it is enshrined in the Coalition Agreement.
The R&D tax credit scheme contributes to that goal.
It joins the $3 billion Provincial Growth Fund, which targets regional development; and the new $300 million Venture Capital Fund, which helps small to medium-sized businesses to expand; as policies all working to boost the country’s economic outputs.
The Venture Capital Fund, announced as part of this year’s Budget, will help fill the ‘capital gap’ needed for many New Zealand firms to expand beyond the early start-up phase. It will help keep more start-ups in New Zealand for longer and support the proportion of New Zealand ownership.
The Coalition Government is committed to improving the lives of New Zealanders.
Higher economic productivity helps drive economic performance, higher wages, and higher living standards.
In order to achieve this, it is important that we not only celebrate our successful, established businesses but also support vibrant, forward-thinking businesses which are still finding their way.
Clayton Mitchell is New Zealand First Spokesperson for Research and Development.