IRL chief executive Shaun Coffey writing in the New Zealand Herald today, comments on the Government’s plan to scrap the 15 per cent R&D tax credit.
“Compared with most other OECD countries, New Zealand has a rather dismal record of investment in R&D from both the private and public sectors and while tax cuts will stimulate consumer spending and provide a short term fillip for the economy, this will do nothing to build capacity.
“A consumption-led recovery will do nothing to diversify the economy from reliance on exporting primary-sector commodities to selling innovative, value-added products to the world – something I believe is vital if we are to prosper long-term.
“While the primary sector will always be our mainstay, the real opportunity for New Zealand lies in leveraging our world-class science expertise to add value to other sectors. By relying heavily on primary products we expose ourselves unduly to the risk of often volatile global commodity prices.”