Choice `silly' says industry

Treasurer Michael Cullen and Pete Hodgson, Minister of Research, Science and Technology, said they had consulted widely with business and justified their choice by citing black holes in crown revenue, too much scope for tax rorts and little benefit to fledgling firms.

But manufacturing and employer representatives questioned just who the Government had consulted in business on the issue.

Alasdair Thompson, chief executive of the northern branch of the Employers and Manufacturers Association, called the decision "silly."

Manufacturers Federation chief executive Simon Carlaw wondered if officials had been persuaded by the "pure researchers" within the scientific community, whose R&D tended to benefit the primary sector far more than it did manufacturing.

Mr Carlaw said those researchers had a history of "capturing" more than their fair share of Government grants.

Biotechnology Association president Selwyn Yorke said grants meant the Government was picking winners.

And while they might help non-profitable start-ups in ways that tax breaks would not, small businesses hoped to grow rapidly into profit-making bigger ones, and start paying tax.

At that stage, they would prefer to have the certainty of better treatment though the tax system, he said.

Also, what might be a big business in New Zealand high-tech terms did not seem so on the world stage.

Mr Yorke said it was unlikely, for example, that the grants scheme would be used for $200,000 clinical trials.

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