The Government's main act for R&D today is likely to be the already announced $80m increase for Callaghan Innovation's grants programme. Photo / Thinkstock
The Government's main act for R&D today is likely to be the already announced $80m increase for Callaghan Innovation's grants programme. Photo / Thinkstock
Any Budget surprises for innovation expected to be geared towards growing business spending, says expert.
Any surprise research & development measures in today's Budget will likely be geared towards business, says one expert.
It is probable that the Government's main act for R&D today will be the already announced $80 million increase for Callaghan Innovation's grants programme.
That funding, spread over four years, will increase the available Growth Grant funding from $102 million to $122 million annually.
University of Auckland Professor of Physics Shaun Hendy says he isn't expecting much more from Finance Minister Bill English today.
Shaun Hendy Professor of physics University of Auckland. Photo / Mark Mitchell
Hendy, who is the director of research centre Te Punaha Matatini, said if anything new was in the Budget it would likely "be around getting the business R&D spend up".
"It's only growing at about the rate that we've seen for the last few decades so it's not like we've seen a supercharge in business R&D. There's positive trends in our ICT sector - computers and software-as-a-service - we've seen a big growth in research and development spending there but we're actually seeing a decline in spending in our manufacturing sector and in our primary sector," Hendy said.
"That's probably something [Science and Innovation Minister] Steven Joyce is less than happy about because that's where his attention has been ... lifting business R&D."
Hendy believed the best way for the Government to boost R&D spending was to reinstate tax credits.
However, this policy wasn't on the table and he wasn't expecting to see it in the Budget.
Realistically, he would like to see further investment in public-sector research at the likes of universities and Crown Research Institutes.
"When you look in the funding per-person in our public sector R&D system, it's very, very low. It's somewhere below Poland and before Slovakia. We're not lavish spenders on our public-sector researchers."
AUT University Pro Vice Chancellor of Innovation and Enterprise Professor John Raine said he would would like to see more contestable funding made available for the likes of the Marsden Fund or Smart Ideas programme, which provides money for more curiosity-driven research.
Technology Investment Network's Greg Shanahan said he would be surprised if there was not continued support for commercial R&D in today's Budget.
He said R&D spending from companies in last year's TIN100 report grew by 10 per cent, well ahead of the 4 per cent growth in revenue.
"R&D spend as a proportion of revenue shows consistent long-term growth for New Zealand's tech exporters," Shanahan said.
"So supporting R&D spend where appropriately focused is supporting export growth and growth in employment. It makes sense for us as a country to do this," he said.
Andy Hamilton, chief executive of startup incubator The Icehouse, said he wanted more initiatives to help small- and medium-sized businesses "get on the R&D bandwagon".
"Not just hi-tech but our heartland Kiwi SMEs that with encouragement could become that much more productive.
"They need help to start and understand how to do it and then we will unleash a massive amount of growth across New Zealand," he said.
Previous Budgets have not provided only direct funding for R&D. Last year the Government introduced a provision which meant start-up companies investing in R&D can "cash-out" tax losses.
This means they can get an upfront payment rather than tax losses being carried forward and applied against future income.
Under the move, businesses were able to deduct tax for "R&D black-hole expenditure".
