KEY POINTS:
According to the commentariat, there is only one issue anyone cares about this election: the economy. Suddenly, thanks to the Big Chill, the fine print doesn't seem to matter so much when it comes to comparing the various policies of the main parties.
Let's face it: few businesspeople
are probably fretting about what the Greens have to say on student loans. Even global warming doesn't seem so urgent any more - what most business owners are agonising over is how to keep their companies afloat in a sea of icebergs, as the frozen financial markets gradually thaw.
But as New Zealand Institute spokesman David Skilling and NZX head honcho Mark Weldon have correctly pointed out, now is not a good time for either employers or employees to pretend we're on the Titanic. It's actually a very good time to focus on what will eventually enable us to build a bigger, stronger boat in which to navigate international waters.
Ever since the first Knowledge Wave talkfest, growth and innovation have remained perennially fashionable business buzzwords - and once the current crisis is over, you can bet they'll pop up again.
Although there are an astonishing number of start-ups with exciting prospects these days, in some quarters at least, hope seems to be fading of establishing our own version of the Nokia success story. And as always, much of the blame is heaped on politicians, even though it's the private sector where spending on research and development is woefully below the international norm.
In the past few years the Labour-led Government has thrown a swag of taxpayer money at start-ups, largely through its various seed and venture capital funds. So far, it has spent more than $180 million on condition that the money be at least matched by private investors.
For various reasons, however, the fledgling firms have taken longer than expected to bear particularly juicy fruit. In fact, Labour appears to have lost patience with the high-tech and biotech sectors, deciding to put its money where our mouths are instead.
This year it announced it would hand over a whopping $700 million for a Fast Forward Fund, intended to stimulate R&D in the food and farming sectors.
Like its other funds, the point of Fast Forward is to stimulate private sector spending, with Fonterra, Zespri, PGG Wrightson and other primary sector organisations agreeing to at least match the Government's contribution.
For those who claim the kindest cut of all is a cut in corporate taxes, Labour has done that, too, lowering the rate to 30 per cent.
And the public sector can't claim it's been ignored. Not completely deaf to criticism of its contestable funding regime for scientists, Labour has moved to stabilise and increase funding.
Just 10 days ago, it revealed it had scraped together a grant of "up to $25 million over 10 years" to help establish a mega-technology park in Auckland called the New Zealand Innovation Centre. The project, which is not expected to be completed until 2014, is a collaboration between the Auckland City Council and the University of Auckland that will see 10ha of land become a science, research and technology centre.
On at least one issue, Labour and National broadly agree: we also need faster broadband if we are to be truly innovative. Exactly how we will get it and how much it will cost is, however, a much more complex issue than either party seems to admit.
But on another couple of issues, the National Party is offering vastly different policies from Labour.
Last year, Labour chose the premises of one of our brightest business stars, software company Endace, to announce a new scheme that would give innovative companies a 15 per cent tax credit for money spent on R&D.
National was never that keen on the idea, and planned to reduce the credit to 10 per cent. It has since declared it would scrap it altogether, to help pay for personal tax cuts.
The party has copped some flak over this, with one of its most vocal supporters, the northern branch of the Employers and Manufacturers Association, saying it was "very disappointed" by the decision. Business New Zealand's Phil O'Reilly also noted that companies that had already invested significant amounts in anticipation of the tax credit would be unhappy.
One criticism of National's policy is that NZ would once again become one of the few developed countries not to offer tax breaks for R&D. It not only makes us less attractive to international investors, but local companies such as Fonterra could increasingly look to Australia to do their R&D.
A major review of Australia's innovation policy, completed last month, has recommended a 40 per cent R&D tax credit.
The Cutler Review, as it is known, has also suggested the Australian Government fully fund university research, leave businesses to do the commercial part, set up a National Innovation Council, issue vouchers to encourage collaboration between small business and universities, and create prizes for innovation. It would be fair to say, however, that the review got a lukewarm response from Australian ministers.
According to the IRD, our tax credits were due to cost just $37 million this financial year. However, that figure was expected to shoot up to $208 million next year, rising to $332 million in 2011.
It has to be said that a lot of accountants and lawyers will also be grumpy if the scheme is scrapped, as their advice will no longer be required. And not all businesses were drooling at the chance to pocket a taxpayer subsidy for work they planned to do anyway.
F&P Healthcare CFO Tony Barclay says his firm was unlikely to increase its R&D spending - already well above the industry average - because of the tax credit.
But Endace chief executive Mike Riley says he is gutted by National's proposal. The company has just opened a flash new R&D facility in Auckland that will be its world headquarters. In future, he says, it might think about expanding elsewhere.
As for National's other bold decision - to scrap the Fast Forward Fund - the reaction has been strangely muted.
No doubt wary of nailing their colours to any particular political mast, Fonterra, Zespri and others have said little, if anything, about it. Perhaps that's because none have yet coughed up the money they promised, and are now hoping they might get away with not having to spend it at all.
Privately, the Crown Research Institutes are delighted at the possibility the Fast Forward money will be sent directly their way instead.
Understandably, none was willing to speak on the record. But when asked six weeks ago about the issue, Science New Zealand chief executive Anthony Scott, who represents the nine CRIs, admitted they were flattered by the attention.
Science, research and technology, he iterated, was critical infrastructure for the nation, and a general election was a good opportunity to consider how it affected all of our lives. For once, the politicians and the public seemed to be taking note.
"Science is close to joining the A-list of general election topics - areas such as health, education and social welfare," he gushed. Oh well, maybe next time.
