Business leaders gave broad support for the package of initiatives unveiled by the Government yesterday and aimed at fostering a knowledge-based economy.
But some executives and organisations were sceptical that the policies were comprehensive or bold enough to do the job. They said a failure to reduce taxes was the biggest element missing from the parcel of about 30 initiatives.
The package "points in the right direction. It is a significant down-payment on further policies," said Simon Carlaw, chief executive of the Manufacturers Federation.
But while the federation welcomed the new programmes and funding in areas such as education, the real key to innovation was low taxation.
"A significant reduction or elimination of corporate tax would be the quickest way to stimulate employment, economic growth and research and development," he said.
"We need a comprehensive review of the tax system and a plan for tax cuts. Australia has already signalled it's going to 30c. We need to get under that right away."
Short of a reduction or even outright elimination of corporate tax, the next best option would be mechanisms such as accelerated depreciation rates.
One of the least desirable ways would be research and development writes-offs because they were prone to causing distortions.
As expected, the Government failed to move on research and development funding, although it said a taskforce would report by next March on factors affecting R and D spending, including whether to offer tax incentives.
The Employers and Manufacturers Association (Northern) called for tax relief on research and development by October 1.
"We welcome and applaud the Bright Future programme announced today," said Alasdair Thompson, the association's chief executive. "But come on, Government, show some real conviction and urgency. Announcing tax write-offs of 125 per cent for company R and D would turn on a great big green light for this first-rate change in direction."
The programme was also supported by the agricultural sector.
The chairman of the Dairy Board, John Storey, said the policies would help traditional industries create value through greater innovation and the exploitation of new technologies.
Dr Keith Steele, chief executive of AgResearch, said the Government "recognises that many business opportunities based on innovation can come from our existing economic base in the primary and food sectors."
"This is not about throwing out the old and starting something brand new. It is about using our existing knowledge and building on it with innovative ideas and appropriate research."
While there was widespread support of Government efforts to promote more effective relationships between business, research organisations and the tertiary sector, some concern was expressed about the Government's focus on tertiary education as the prime mover in innovation.
David Mair, an executive director of Interlock, the window fixtures manufacturer, said: "The real innovators come from within companies. Smart, small companies are usually started by innovators with a good idea, not by graduate engineers."
The sentiment was echoed by Warwick Bishop of the Institute of Professional Engineers. "We're one of the few OECD countries producing more scientists than engineers. Research and development is being done, but there's no transfer mechanism. We're short of the wealth creators who can use that technology."
Policy coordination and implementation were also issues raised by executives. Turning the Bright Future programme into concrete policy will be the responsibility of a team of nine ministers and about 10 new or enhanced agencies.
"How will you know where to go for help?" said Ian Devereux, managing director of Rocklabs, an Auckland maker and exporter of laboratory equipment for mines.
A single coordinating ministry to drive the process would be more effective, he said.
ManFed was concerned that the proposed policies would become effective only over the medium to longer term. "Yet we've got to survive the next three years, " said Mr Carlaw.
Speedy implementation was needed to demonstrate that the Government really was committed to the programme. "This should not be an enthusiasm put away after the election and only got out again three years later."
Sceptics pounce on deal's absence of tax cuts
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