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Minister In Denial Over R&D

Contributor:
Fuseworks Media
Fuseworks Media
Moana Mackey
Moana Mackey

Wayne Mapp's claim that his government's axing of Labour's R&D tax credit has not put New Zealand at a competitive disadvantage compared to Australia shows how out of the touch the Government is, says Labour's Spokesperson for Research & Development, Science & Technology, Moana Mackey.

The Research Science and Technology Minister made the statement at the Education and Science select committee estimates hearing on Vote RS&T and CRIs yesterday and confirmed it in the House today.

"Given the decision in the Australian budget to replace their existing R&D tax concessions with an expanded R&D tax credit, it is of deep concern that our Government is heading rapidly in the opposite direction, and of even greater concern that the Minister of RS&T doesn't think it matters.

Recently released statistics show that business sector investment in R&D is at 0.51% of GDP - one third of the OECD average.

"When Labour introduced its R&D tax credit, the IRD calculated that the investment would be enough to drive reported private sector R&D expenditure from one-third of the western world average to almost exactly two-thirds", Ms Mackey said.

"When asked at select committee whether he was working on a timetable to lift New Zealand's level of R&D investment, the Minister said 'no', in fact he thought the very idea of such a plan was a joke."

Ms Mackey said that Budget 2009 was a terrible budget for RS&T, and the Minister's comments at select committee and in the House today has done nothing to allay concerns.

"The New Zealand Manufacturers and Exporters Association chief executive John Walley said this week that R&D funding is not working. He points out that most other OECD countries have R&D tax incentives and that businesses are likely to move their R&D activity offshore as a result.

"For the Minister to say there is no problem is ludicrous. He needs to take his head out of the sand and explain what his Government is going to do to stop companies moving R&D and jobs overseas

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