Research and development in the technology sector will reduce as a consequence of the mess the Government has made of its funding support, National’s Research and Science spokesperson Dr Nick Smith says.
“We have leading software companies like Orion Health who will have their research and development support cut by 90 per cent from 1 April due to the mess Labour has made of the Government’s research and development policy.
“These funding cuts are estimated at $50 million per year and will affect about 250 tech companies.
“It is madness that we are reducing R&D support to the tech sector when it offers huge growth potential to support New Zealand’s post-Covid economic recovery and when we need to grow our low carbon export earnings.
“Research, Science and Innovation Minister Megan Woods needs to accept responsibility for this mess.
“Ms Woods has ignored industry consultation in 2018, submissions to Select Committee in 2019 and advice from Callaghan Innovation in 2020 that all stated the policy would significantly reduce funding to the tech sector.
“This funding cut for tech sector R&D is the product of Labour’s poor policy of changing from National’s Callaghan Growth Grants to Labour’s Research and Development Tax Incentive.
“The problem with tax incentives is they have to be very narrowly defined to prevent tax avoidance, but in the process can exclude valuable research and development like in the software sector.
“Labour’s R&D tax policy is starting to look like another KiwiBuild where Labour failing to get the detail right has the policy achieving the opposite of what was intended.”
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