The Research and Development (R&D) tax credits policy introduced by Megan Woods is still short on detail and long on generalities after today’s estimates hearing, National’s Research, Science and Innovation Spokesperson Dr Parmjeet Parmar says.
“Today I asked the Minister several key questions on the policy, but she quite simply has not nutted out the finer details.
“She could not provide any information on the spending that will go into existing R&D in tax credits, any information on the estimated spending that will go into possible re-classification of work as research and development, and she could not give any assurances that she will be able to monitor rorting of the tax credit system to the fullest.
“When asked about the public investment increase required in research, science and innovation each year up to 2028 to increase R&D to 2 per cent of GDP, her answer was ‘significant’.
“And the threshold set for businesses of $100,000 R&D expenditure during a tax year is now open for discussion according to the Minister, as she tries to win support from innovative smaller businesses.
“The sector deserves a Minister with a better grasp of the figures from than what she demonstrated today.
“The financial risk of R&D is being shifted onto the businesses themselves, leaving them with the burden to develop new, innovative products and technologies with no promise of support from the Government.
“It’s simply not acceptable for New Zealand businesses that the Minister has done no homework on her flagship policy for the portfolio.”
The Government’s R&D tax credit policy has major flaws – it only benefits a small group of large companies, does nothing to help smaller businesses looking to grow, and will likely lead to rorting of the system, National’s Science and Innovation Spokesperson Parmjeet Parmar says.
Submissions are closing on the Government’s discussion documents today, and Dr Parmar has serious concerns about accessibility for a large section of the science and innovation sector.
“The removal of Callaghan Innovation Growth Grants mean many research intensive businesses will actually get less support for Research and Development,” Dr Parmar says.
“Most of our highly research active companies are currently getting 20 per cent of their R&D funding back through the Callaghan growth grants – which Megan Woods is axing. This will drop back to 12.5 per cent and only if you’re making a profit to set the credit against.
“Sadly most of the extra money will only go to companies that spend their time researching how to reclassify existing expenditure as R&D and give themselves a tax break. Indeed, Australia currently has had to redesign their own R&D tax credit scheme because of concerns with firms abusing the system.”
Dr Parmar says huge parts of the science and innovation sector are missing out completely because of Labour’s 12-year fixation on R&D tax credits.
“That’s not a commitment to innovation and high value products and services. It’s a plan for New Zealand to fall further behind other technologically advanced countries.
“This is a purely political move – Megan Woods is dumping the successful Callaghan Innovation Growth Grants only because they were put in place by National.
“We have been seeing big lifts in business R&D under the current grant-based system. The Government needs to convince the tech sector and the public that this change won’t just slow New Zealand down.”
The Government is planning to reduce support for business research and development in New Zealand’s fast-growing R&D intensive tech firms, National Party Research, Science and Innovation Spokesperson Parmjeet Parmar says.
“Hidden way down the back on page 31 of their proposal to introduce R&D tax credits is the news that they plan to cancel R&D growth grants at the same time,” Ms Parmar says.
“This will negatively affect hundreds of New Zealand’s most innovative technology focused companies.
“All of those companies will drop from getting 20 per cent of their research and development expenditure re-funded down to 12.5 per cent.
“And start-ups making a loss may have to wait until they are making a profit to cash-in any tax credit, that could take years compared to the current system which provides grant funding immediately.
“How is this supposed to grow R&D? How is it supposed to speed up development of our high-value tech sector?
Ms Parmar says that the change from growth grants to R&D tax credits will also lead to a big boost in business for accountants.
“When suddenly everyone can get a tax credit for any R&D, it will be amazing how much R&D your average business will find it was doing.
“All over the world these tax credit schemes are ripe for abuse, with their introduction always leading to a lot of ordinary expenditure being ‘reclassified’.
Ms Parmar says that it is telling that the Government’s first practical move in the science and technology sector is to reduce investment rather than increase it.
“These people have talked a big game in science and innovation for a long time. It’s sad for the science and tech sectors, and for New Zealand’s future, that their first move is to take us backwards.
“While small as a percentage of the economy, R&D has been rapidly growing under the previous Government’s settings. Ms Woods needs to explain how it will grow faster when they are reducing the incentive.”
New Zealand innovators could get a smoother path to success, as a Member’s Bill is drawn for debate in Parliament to provide intellectual property rights to advancements that may not qualify for a standard patent.
National Party Science and Innovation spokesperson Dr Parmjeet Parmar will introduce the bill which has been drafted after taking into account experience from European countries and Australia, especially the most recent recommendations for a similar initiative to make the Australian system more effective.
“My Patents (Advancement Patents) Amendment Bill will introduce a more accessible and cost-effective second-tier patent system that will protect novel creations that don’t qualify for the standard patent,” Dr Parmar says.
“I am very committed to providing innovator protection over the use of their creation through a second-tier patent system, providing an opportunity for visionaries and creative people to keep working on their innovations without fear of being copied.
“It will also provide forward-thinking people with the opportunity to commercialise their creation whilst continuing the vital research and development component of our economy.
“Protecting ideas and advancements will help New Zealand innovators to stay competitive and stand out on the international stage.
“I will be seeking cross-parliament support for this bill.
“We should not be waiting – we must promote the advancement of technology and my bill will help ensure that New Zealanders continue to benefit from their creativity and innovation with a system that better supports the development of new and forward-thinking ideas.”
A Member’s Bill has been lodged by National MP Parmjeet Parmar to better support New Zealand innovators by providing intellectual property rights to advancements that may not qualify as an invention for the standard patent.
“Protecting ideas and advancements helps New Zealand innovators and businesses to stay competitive and stand out on the international stage,” Ms Parmar says.
“My Patents (Advancement Patents) Amendment Bill will introduce a more accessible and cost-effective second-tier patent system that will protect novel creations that don’t qualify for the standard patent.
“Providing an innovator monopoly over the use of their creation through a second-tier patent system will provide an opportunity for them to further advance the creation with reduced risk.
“It will also provide them with the ability to commercialize the creation, just as the standard patent system would, without the fear of it being copied. This will enable them to contribute substantially to research and development and to the economy.
“My bill will help ensure that New Zealanders continue to benefit from their creativity and innovation with a system that better supports the development of new and forward-thinking ideas.”
Science and innovation Minister Megan Woods should stop re-announcing the previous Government’s R&D programmes and come up with some of her own, National Party Science and Innovation Spokesperson Parmjeet Parmar says.
“Ms Woods has attempted to fool the media by re-launching the MBIE Innovative Partnerships programme which was previously announced and launched by the National Government in 2016,” Ms Parmar says.
“It is clear that she has nothing new to say on research and development.
“The Ardern-Peters Government have spent so much on its bribe to university students that the word around town is that there will be no new funding available for research and development in this year’s budget.
“Labour has set a big target of lifting research and development spending to 2 per cent of GDP but they have no plan on how to get there.
“Ms Woods needs to stop re-treading the previous Government’s programmes and announce the detail of her own policies.”
With the 2018 academic year drawing near, questions remain around how our science laboratories will maintain a world-class standard given all the Government’s tertiary spending is going into student support with no extra money for the institutions themselves, National’s Tertiary Education spokesperson Paul Goldsmith and Science and Innovation spokesperson Parmjeet Parmar say.
“Surely the Government’s priority for tertiary education should be to improve the quality of education, which means investing more in the universities and polytechnics so that they can deliver world-class education that equips young New Zealanders to be globally competitive,” Mr Goldsmith says.
“Funding science laboratories to maintain the highest quality of education and facilities is essential if we are to ensure that budding Kiwi scientists can keep up with the world’s best.”
But Ms Parmar says that with all the new tertiary spending going into student support, we can be sure that there will be little to no money left to invest in maintaining and developing the quality of our science laboratories.
“Setting up a science laboratory with all the right equipment can cost tens of thousands of dollars, not to mention the annual running costs of such laboratories. But it’s money well spent if it means that New Zealand can continue to produce world-class scientists.
“It’s difficult to see the point of getting more students into tertiary education if the institutions are not even funded enough to be able to keep up with international standards. We should not be compromising quality of education for volume of enrolments.
“What makes this all harder to stomach is the fact that there will be barely any increase in enrolments so the Government can’t even justify the reasons why there will be no extra money for science laboratories.
“Not only this, but if we cannot maintain the quality of our facilities we can be sure that serious aspiring scientists will be taking their enrolments overseas,” Dr Parmar says.
The Government has provided absolutely no Christmas cheer for the science and innovation sector with no commitment in their Half-Yearly Economic and Fiscal Update for more funding for science and innovation, National’s Science and Innovation Spokesperson Parmjeet Parmar says.
“The lack of any plan or funding is very surprising given the Government’s lofty goal for science spending,” Ms Parmar says.
“They say they want to lift New Zealand’s research and development spending to 2 per cent of GDP – and yet they identify no plans to increase Government spending to assist with that.
“In fact the only thing they’ve done so far is reduce research and development spending by taking money from the Primary Growth Partnership and putting it into shuffling around the desks at the Ministry for Primary Industries.
“The Government needs to get beyond sloganeering and start coming up with real plans for the science and innovation sector.
“They keep falling back on the R&D tax credits but even those hardly rate a mention in the half-year update.
“They have an ambitious target and the clock is ticking.”
A law requiring newborns to be enrolled in a general practice before they are six weeks old is a step closer, thanks to a private member’s Bill submitted by National MP Dr Parmjeet Parmar.
Dr Parmar’s Newborn Enrolment with General Practice Bill passed its first reading this week. It requires all newborns to be enrolled with a general practice and primary health organisation before his or her first immunisation at six weeks of age.
“It is important that our children receive the best start in life, and National is working hard to ensure the Government provides high-quality health services for Kiwi families.
“Following on from Coroner Wallace Bain’s comments and recommendation this week to help reduce rates of child abuse, my Bill aims to improve health and social outcomes for newborns and their families through improved access to health care, and the opportunity for earlier detection of both health and social issues.
“By enrolling newborns with a general practice, we can ensure they are connected to various agencies and services including maternity care, Well Child Tamariki Ora (WCTO) services, immunizations, and primary care.
“My bill will ensure more children and families can benefit from these services,” Dr Parmar says.
This is the last column you’ll read from me before the Mt Roskill by-election this Saturday 3 December. As I sat down to write this, I found myself presented with a lot of different things I wanted to talk about.
I considered summarising my strong local plan. A plan I’m very proud of. It focuses on reducing crime, better local transport, more affordable housing, backing local businesses, investing in education and improving healthcare.
I could have written about my background as a scientist, a businesswoman, a mother, a community advocate, and a hardworking List MP.
I would have liked to go into more detail about how proud I am to call myself an Indian New Zealander, a Kiwi, and supporter of all ethnic communities.
And I could have talked about how this is an historic opportunity to elect the first Indian New Zealander in an electorate seat, as opposed to on the list.
Instead, I want to talk to you about something far more important. I want to share some stories from the people I’ve met out on the campaign trail and those I know from my 20+ years of being involved in this area.
I’m talking about business owners like Johannes. He gets up at 5:30am each day, works until about 6:00pm at night, and then goes home to split his time between paperwork and spending time with his family.
He loves his business and doesn’t mind working hard. He tells me he doesn’t expect the Government to fix all his problems, but appreciates everything the National Government has done to reduce red tape for small businesses. Johannes says he’ll support me because I share his experience running a small business and because I share his family values and work ethic.
There’s people like Maureen, one of the lovely seniors we have living in the electorate who has lived here almost all her life. She told me she didn’t vote for National at the last election, and loved Phil Goff, but that she would support me. Maureen lives in social housing, something she says she knows is a privilege and not a right.
She is proud of her home, treats it well, and is pleased to see that National is investing a huge amount improving the quality and supply of social housing for people like her who need a bit of extra help to have somewhere safe and secure to call home. Maureen said she’s voting for me because I’ve worked hard to help others who need social housing, and because I’m a strong advocate for better social housing in Mt Roskill.
I’ve met people like Pradeep. We’ve seen each other at lots of local community events – temple and public meetings talking about the quality of bus stops in the electorate. Pradeep is a proud local and a proud family man. Last week he invited me to join his family for a very special occasion, his grandson Shubhankar’s first birthday.
One of my fondest memories is celebrating one of my own son’s first birthday here in Mt Roskill, so of course I was honoured to attend. My opponents criticise me for focusing on things they say are too local, but I’m the type of person who thinks there is no issue too big or too small for a dedicated local MP.
These are just a few of the many, many people I’ve come across who aren’t of much interest to the media, so you don’t see people like them on the front pages or broadcast at 6pm. They’re not actively talking about how much money they’ve made or how many square metres their house is.
They’re just ordinary people who love living in the Mt Roskill electorate, love Auckland, love New Zealand, love their families, and celebrating their diverse cultures in their own way.
They know candidates who are so desperate to get into Parliament will say and do anything, and they’re more interested in having a local electorate MP who has a local track record of experience and success in getting things done.
There’s a quote in the Bhagavad Gita that I love:
In battle, in the forest, at the precipice in the mountains, the good deeds a person has done before defend them.
For over two decades, I’ve poured my heart and soul into Mt Roskill and all its communities. I’ve worked hard for you and your family, and I’ve gotten results.
In this by-election, I am the clear choice and I hope to have your vote.
Voting closes 7pm Saturday 3 December - for information on where and when you can vote visit www.parmjeetparmar.co.nz/voting