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R&D Tax Incentive to benefit more firms

Research, Science, and Innovation Minister Megan Woods (Microsoft Photo)

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Wellington, May 29, 2022

Hundreds of New Zealand will benefit from the launch of two new grants aimed at fueling firms that want to innovate, Research, Science and Innovation Minister Megan Woods has said,

“This $250 million investment over the next four years is a sign of my commitment to some of New Zealand’s brightest businesses, and to turning our great ideas into building a higher-value, more sustainable economy,” she said.

Ms Woods said that she is keen to turbo-charge all the tremendous potential that she sees in our business ecosystem by introducing grants to help out with the high costs and steep learning curves associated with R&D, and to provide an on-ramp to our existing R&D Tax Incentive.

“I also want to provide extra encouragement to businesses that are performing innovation that is new to the world. Now with a combination of the R&D Tax Incentive, and the new grants programmes, we will have a system of support that is much more representative of the full gamut of business activity we want to stimulate. As we continue our economic recovery from the challenges presented by Covid-19, we need to continue to foster and invest in innovation which we know creates huge value for society and is vital for addressing our social and global challenges such as tackling high emissions. Returns on fundamental research and development can take decades to materialise so it is right we take a long-term view,” she said.

Ms Woods said that the R&D tax incentive now has more than 1500 businesses enrolled, with over $118 million of RDTI credits approved.

This has supported private sector investment in R&D of over $788 million so far. This new investment is intended to further supplement private investment by funding innovative activities that might not happen – or happen to the optimal extent – without government support, she said.

“We know innovation is the lifeblood of business. It leads to the creation of new higher-wage jobs, and it helps our firms compete more effectively in the global marketplace, bringing down costs by improving efficiency and creating exciting new products and services. We need more unicorns,” Ms Woods said.

About the Trailblazer grant

Ms Woods said the Innovation Trailblazer Grant will help with the costs of activities that do not fall within the definition of R&D and will be targeted at businesses that are pursuing opportunities that will generate significant spillover benefits to the wider economy.

“The primary recipients will be businesses that are performing innovation that not only is new to the world but also has the potential to make a significant difference to the innovation landscape. The grant will also be available to support businesses that are building platforms that enable other innovators to be successful,” she said.

The New to R&D Grant will support businesses that do not have established R&D capabilities and provide an on-ramp onto the R&D Tax Incentive (RDTI), Ms Woods said.

“This grant helps businesses with the high costs and steep learning curves associated with establishing an R&D programme. Callaghan Innovation will administer the grants, which will be available from mid-September 2022,” she said.

Source: Ministry of Business, Innovation and Employment

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