National let business down on R&D

A new survey has confirmed that businesses were let down by National’s punitive tax hikes on Kiwi firms engaging in research and development, says Labour’s Economic Development Spokesperson David Cunliffe.

“Labour introduced significant 15% R&D tax credits in 2007 as well as the $700 million Fast Forward fund for research-led growth.  Business responded and there was a notable jump in private-sector R&D activities in the 2009 financial year.

“As soon as it came to power, National scrapped both programmes and John Key effectively added to the tax burden on those businesses that were investing in New Zealand’s future.

“It’s little wonder that private-sector R&D activities fell back before National was forced to restore a comparatively paltry $50m of annual credits.

“Today’s Statistics New Zealand Business Operations Survey shows just 9% of firms undertook R&D in 2011. While this is positive, it still leaves New Zealand’s total R&D spend as a percentage of GDP ranking below India, Brazil, Turkey, Poland, Mexico and Iran.

“R&D tax credits were welcomed by a wide range of businesses as a positive element of any credible growth plan.  National wasn’t listening then and its recent backtracking has been half-hearted.

“We need a high-value research-led future. Brutal and arbitrary changes to the R&D tax regime do nothing to get us there,” said David Cunliffe.