Big players welcome R&D move

Fisher & Paykel Healthcare chief executive Michael Daniell. Photo / NZ Herald

The Government's new $321 million research, science and technology funding package has been met with a mixed response from the manufacturing community.

The big players welcomed the news but smaller firms were more muted.

Fisher & Paykel Healthcare chief executive Michael Daniell said the company spent more than $30 million a year on its Research and Development (R&D) department, which employed about 250 staff in Auckland.

"We would anticipate that we might be eligible for $2.4 million [in Government funding].

"We're growing R&D the whole time and effectively getting some of the tax we pay back to help fund R&D will be helpful," he said.

Daniell said the R&D tax credit scheme, scrapped by the National Government, had been more beneficial than the new scheme would be - saving the company around $4 million during the time it operated.

"Our preferred position would be to have a lower tax rate and just retain the money to invest in R&D, but if that's not a practical proposition, then having some specifically targeted R&D support is definitely useful."

Murray Fenton, managing director of Auckland plastics manufacturer Adept, which employs around five R&D staff, said it was unlikely the firm would take advantage of the $20 million in tech vouchers on offer to smaller companies to access public research institutes and universities.

"We have found in the past that you tend to spend a lot of time filling out all the forms and all the requirements and then for some reason or another you don't fall quite into the scheme," he said.

Doug Cleverly, chief executive of Manukau-based biotech firm Argenta, said the new science spending was very positive.

He agreed with the move towards a voucher system for smaller companies and R&D subsidies for larger ones.

Argenta rapidly expanded from employing two R&D staff in 2003 to 40 across its United States and New Zealand operations this year. It spent around $6 million a year on R&D, or around 15 per cent of its turnover.

Cleverly said Argenta, which develops animal health products, also had an eight-strong "commercialisation department", which the R&D team fed its developments into.

"We recognise that [commercialisation] is a critical factor. There's no point in inventing stuff if you can't commercialise it."

Niall Fuller, managing director of Hamilton-based liquid filling system manufacturer Hunter Filler Systems, which employed two R&D staff, said he would like to see a balance in funding for both small and large companies "because sometimes its the smaller companies that come up with the better ideas".

SPEND-UP

The Government has pledged $321m for R&D and science, including:

* $189.5m for R&D subsidies given to medium to large, research-intensive firms that can show their activities result in wider benefits for New Zealand.
* $20m in tech vouchers for smaller firms to be used at public research institutes and universities.
* $23.7m for commercialising public research.
* $25m to assist New Zealand's most talented scientists.
* $9m to lure top science entrepreneurs.
* $44.3m to expand infrastructure.
* $9.5m in miscellaneous costs.