R&D, e-commerce get nod in Budget

Finally, some numbers are appearing on the government's plans to boost the knowledge economy.

Finally, some numbers are appearing on the government’s plans to boost the knowledge economy.

They are not large numbers, but in some areas – most notably research and development grants – they represent a significant departure.

Overall, $43 million additional spending will go into R&D alone over the coming year – a 10% increase.

“We’re investing this because we want to stimulate private sector research and development, not just complain about the lack of it,” says Research Science and Technology minister Pete Hodgson.

Compared to other OECD countries, New Zealand has comparatively low private-sector R&D – the ratio is around 70% public, 30% private, although there is evidence that private sector R&D is under-reported.

Hodgson again defended the government's decision to renege on its pre-election pledge of tax-breaks for R&D, saying that tax breaks are of little use to start-up firms which are not making any money yet but which most urgently need

The government announced an additional $11.8 million grants programme, plus another $9 million for the existing Technology New Zealand scheme.

Other knowledge economy initiatives in the Budget include:

  • $9.5 million over two years for Trade New Zealand to implement an e-commerce strategy for exporters;
  • $6.8 million over four years to harmonise New Zealand laws on electronic commerce;
  • an additional $2.9 million for the new economy research fund;
  • $0.55 million for the new Science and Innovation Council to advise Prime Minister Helen Clark;
  • $0.55 million to develop a national e-commerce strategy, consulting industry and the general public;
  • $0.1 million over four years for electronic commerce consumer protection;
  • building a national database to match businesses with innovative ideas with people providing venture capital.

Minister of Commerce Paul Swain said the package was “practical and comprehensive”.

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