Budget 09: Primary investment funding welcomed

AgResearch chief executive Andrew West is pleased that primary industries have been recognised. Picture / Greg Bowker

Government investment for primary industries announced in the Budget yesterday was widely welcomed, although some were unhappy about a scrapped tax credit for research.

A new Primary Growth Partnership was given $190 million of funding over the next four years, reaching $70 million a year when fully operating in 2012/13.

Government investment would be matched by industry, resulting in an annual investment of up to $140 million.

Agriculture and Forestry Minister David Carter said the initiative demonstrated the Government's bid to boost productivity in the economically vital primary sectors.

"Innovation in the primary and food sector industries will be essential for New Zealand's long-term economic growth and improved environmental performance," Carter said.

"This initiative will build world-class expertise in these sectors."

Sectors covered by the funding included pastoral, arable, horticulture, seafood, food processing, climate change, forestry and wood.

Investments would include education, research and development, product development, commercialisation, market development and technology transfer.

The partnership scheme replaced the scrapped NZ Fast Forward fund planned by the previous Labour Government.

The Budget yesterday also included $114 million of new operating spending and $17 million in capital for research, science and technology.

Technology New Zealand was given a 38 per cent boost to $47.4 million for 2009/10 for grants that enhanced the technological capability of businesses.

The Government has scrapped a 15 per cent research and development tax credit announced by Labour at the 2007 Budget, which could be claimed for the 2008/09 tax year.

AgResearch chief executive Andrew West said the Primary Growth Partnership was excellent.

"It's part of a recognition which I think has been growing, not just with National Government but with the previous government too and officials, that primary sector industries are at the heart of the economy and need to be re-invigorated," West said.

Horticulture New Zealand president Andrew Fenton welcomed the partnership which "would help accelerate the application of science, technology and innovation, creating more jobs and exports".

Meat & Wool New Zealand chairman Mike Petersen said gradually increasing the funding during the first four years of the partnership made sense.

However, the loss of the research and development tax credit was disappointing.

"I think it's something that should have been revisited but I have to be realistic though and say given the state of the Government's books today, with the global financial crisis, I'm sure they're not going to go there."