Govt announces extra millions for business research and development

Science and Innovation Minister Paul Goldsmith has announced an extra $74 million for R&D for businesses. Photo / File

The government will top up Callaghan Innovation's Research and Development (R&D) Growth Grants programme with an extra $74.6 million, Science and Innovation Minister Paul Goldsmith announced today.

The additional funding, to be made available through the Innovative New Zealand programme in Budget 2017, brought the total accessible amount in the grants scheme to $657.2m in four years.

R&D Growth Grants are an on-demand, non-discretionary scheme that enables qualifying companies to claim back 20 per cent of their eligible R&D expenditure, capped at $5m a year.

To qualify, a business must commit to spend at least $300,000, and at least 1.5 per cent of revenue, a year on research and development occurring in New Zealand.

It must also be domiciled in New Zealand and maintain or increase their spending on R&D over the course of the funding.

There are clawback provisions should a change occur that reduces the benefit to New Zealand.

The new funding in this year's Budget followed on from the $761.4m investment in Budget 2016 through the Innovative New Zealand package.

New data released earlier this year by Statistics New Zealand showed a significant jump in the amount Kiwi companies are spending on R&D.

In the two years to 2016, business R&D increased by 29 per cent and Callaghan Innovation grant recipients increased their own research and development spending by 46 per cent.

"New Zealand companies invested $356 million more on business R&D in 2016 than they did two years prior, lifting expenditure to the highest level since records began," Goldsmith said.

"Growing levels of business R&D are likely to increase the productivity of the wider economy as they result in knowledge and technology that can be used by other businesses to generate new industries, higher-value products and higher-skilled jobs."