Business NZ calls on government to replace R&D credits

Plan for productivity seeks a return to light-handed regulation of telecommunications

Among a host of action points, Business New Zealand is calling on the government to replace the research and development credits it cancelled last year and to return to light handed regulation in the telecommunications market.

"The government must accept that it has an active role in helping promote and encourage investment in research and development and innovation. Business expects the government to develop a replacement for the scrapped R&D tax credits," the organisation says in its productivity plan "Setting New Zealand Apart".

Business NZ also calls for Tthe development of a national innovation strategy, including innovation and science priorities "to identify and harness innovation opportunities to ratchet up the economy".

As part of its proposed programme, Business NZ calls for incentives for stronger links between public research organisations and the private sector.

"This includes actively improving collaboration between private firms and CRIs, universities, the Tertiary Education Commission, FRST and MORST," it says.

Among its other innovation proposals, Business NZ calls for simplification of the current funding system, better coordination of publicly funded research for commercial application and a review of "the role tax can play in promoting private sector expenditure and investment in innovation".

Outside of the innovation sphere, Business NZ is calling for property rights to be included in a Bill of Rights Act.

"New Zealanders are less protected from the possibility of their Government taking or reducing the value of their property than the citizens of most other countries, reducing the incentives to invest in economic development," it says.

In telecommunications it is seeking a shift towards light-handed regulation.

"Ensure that any regulatory steps towards changes to the ownership of telecommunications services balance property rights and investment demand with the best services and prices for homes, businesses and public services," it says.

"Give more weight to commercial solutions by the major players, rather than a ‘regulate first’ approach. Getting an outcome that creates a win-win-win for consumers, business and government should always be the top priority in an industry that continues to move quickly with new products and technology."

Business NZ's chief executive, Phil O’Reilly, says there is growing realisation that the wealth gap between New Zealand and Australia can be directly sheeted home to productivity.  “Australia’s productivity growth is around two percent a year while New Zealand’s is less than one percent," he says. “We need a strategy to close the gap.”

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