Video transcript: R&D tax incentive
Dr Damien Fleetwood, Biotelliga: “The ability to really innovate and generate new products and grow the economy is absolutely reliant on research and development – so using good scientific skills and tools to develop new products, new services and new markets.”
Miriana Lowrie, 1Centre: “R&D is essential. The only way that you can improve what you’re doing is to research.”
David Banfield, Methven: “To really deliver world-class capability and world-class products and services, we need to be at the forefront of research and development – and that requires us to invest in things today that will see a benefit in three, four, five, some cases ten years’ time.”
Martin Simpson, Fraser Engineering: “There is no limit to the potential of companies like ourselves, and there are many of them, and any support would open up all sorts of doors across the globe.”
New Zealand lags behind the world on R&D spending. This Government has an ambitious target of increasing research and development expenditure to 2 percent of GDP by 2027.
Growing R&D will fuel innovation, drive economic diversification, and increase productivity.
For businesses, R&D is recognised as a key indicator of innovation, which enhances their ability to be successful in the evolving global marketplace.
Increasing R&D support is part of how Kiwi firms will move further up the value chain and deliver higher wages, and live up to New Zealand’s reputation as a place of daring and innovation.
To lift spending on R&D, the Government will be introducing an R&D tax incentive. It will have a broad reach across our economy – from start-ups to established R&D performers – to encourage businesses of all sizes and scales to undertake R&D.
The scheme will have a user-friendly R&D definition, a credit rate of 15 per cent, a $120 million cap on eligible expenditure, and a minimum R&D expenditure threshold of $50,000 per year.
The R&D tax incentive will apply from the beginning of a business’s 2019/20 income year.
Growing R&D expenditure has benefits for us all, and will enable our innovators, our entrepreneurs and our visionaries to build a better New Zealand.