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Greens seek extra billion to fund economic diversification

New Zealand needs to invest in science and innovation to reduce its economic reliance on agriculture, the Green Party says, in an election policy announcement that pledges the Greens would spend $1 billion over three years as a first step to "kick-starting a transformational shift in how our economy creates wealth."

Party leader Russel Norman released the Greens' "Smart, Green Innovation" policy, offering a range of tax incentives, reforms to innovation grant-making, 1,000 more maths and science students annually, research and development tax grants, and "passive" government investment in promising companies receiving "significant taxpayer funds."

The policy would require companies that receive government assistance and are sold to foreign buyers to repay their grants, as would all businesses that "benefit from public investment," so that funds could be recycled for up and coming new businesses.

The Greens' policies will gain most traction if in a coalition government led by the Labour Party after the Sept. 20 general election, and is broadly compatible with Labour, especially on tax incentives for research and development, which the Greens suggest should be extended to cover "management training for medium-sized New Zealand-owned firms", recognising shortcomings in management skills in many local businesses.

However, numerous elements of the Greens' plan would appeal equally to National, were the two parties to repeat the Memorandum of Understanding arrangement they brokered in 2008-11 and gave the Greens some policy wins, including funding for nationwide home insulation programmes.

Among the Greens' detailed proposals are requiring both the ACC and Government Superannuation funds to plough at least 1 percent of their investment portfolios into a "high technology investment fund", adding 1,000 tertiary education places for maths, engineering, and computer and physical sciences, costed at $50 million annually, and an increase to total science funding rather than a cut in primary sector science to refocus national effort.

The proposed extra $1 billion would ramp up from $100 million in 2015/16 to $500 million by 2017/18 and there would be "greater investment in promising new paths in the ICT, renewable energy, and manufacturing sectors."

A further $20 million would be applied to implementing elements of the current government's 2011 Powering Innovation report, including an educational campaign to promote careers in science, maths and engineering, and spending $11.3 million to re-establish student allowances for post-graduate study.

Elsewhere, the policy proposes a $10 million kick-start fund for social and Maori enterprises and changes to the way stock options are taxed for qualifying start-ups, "recognising the value of 'sweat equity' and assuming the introduction of a comprehensive capital gains tax."

The Greens would also allow "passive investment" by government agencies in promising start-up businesses.

(BusinessDesk)

Comments and questions
9

Right... so the Greens now want the government to invest in private companies and give the business government loans.... and this after spending thousands of tax payer dollars attempting to re-litigate the biggest referendum the country holds every 3 years... spending thousands of tax payer funds employing gullible, easily manipulated individuals to collect signatures against just this?

So, it's only a bad idea if National do it, but it's a great "investment" if the Greens propose it?

Greens - your selective logic really puts you right up there with Laila and her way of thinking...

The current tax system incentivises capital gains, pushes primary industry growth and short term fast growth entrepreneurs such as interweb based applications (e.g. Trade Me). Most investors shy away from a long term commitment to value added high technology because the returns don't come quickly enough and risk is perceived as too high. Perhaps it is in mitigating this risk that government should be investing in applied science innovation to a greater degree.

That investment needs to be in terms of a generation of science and engineering graduates, which means investing in revolutionising secondary education in New Zealand. The problem is not that we don't have the talent, but that we have not yet changed our schools to take advantage of communications in the modern world. If we revolutionised science and maths teaching at secondary school perhaps degree courses would not have to spend their first year playing student catch-up!

It would seem that there is almost bi-partisan support for interventionists policies around the 'tech' industry, though the implementation of each parties agenda differs radically.

The delivery of these subsidies will be critical to a successful outcome. I can see a massive amount of leakage occurring!

As to the greens commitment toward tertiary grants - kudos, i just think it should read 10,000.

I do wonder if a lower tax rate across the economy might generate as much GDP growth / investment?? Does MBIE release this sort of data?

You gotta hand it to them. $1billion idea using tax payers money. Wish I could get tax payers to pay for my ideas and salary. Why not get a better return and use tax payers money that's poorly allocated or allocated to the gravy train for example. (that money had never been accounted for or reported). There would be a better ROI for the past generation of taxpayers if that gravy money went into this Green idea. Let's have a binding referendum, more gravy train money or $1b R&D science, Tech fund???) Because none of the gravey seems to have reached places it really should have, like Opotiki as a recent example of woe.

Have you ever wondered, why the politicians only creative tool to solve a problem when they come up with an idea involves using someone else's money, like a - tax?

Maybe it's the flu, but can anybody recall a politician coming up with a great game changing idea that didn't involve tax?

Wish I could tax my clients every time I come up with an idea to prove I am a visionary, then tell them to sell more, work harder because I need more money (tax money) for my ideas.

Whenever the Greens or Labour propose something like this, the question is the same - from where will the spending come? You guessed it: from other taxpayers, particularly PAYE employees and, they think, capital gains tax. They would also be forced to increase overseas borrowing - which the National Government has done a credible job controlling. Mr Norman is a dangerous animal who has no business experience whatsoever, and ought to stay well away from the Treasury benches.

Please, just stop.

All parties, all politicians, all bureaucrats.

Just keep government out of the private sector. Tech industries do not need government help. neither does gambling. Neither does movie making. Neither does agriculture. Neither does tourism.

Just stop. Please.

Let government deliver police, health care, public education, and social welfare. That's all.

Bravo! I agree whole-heartedly.

Thank you for sharing this comment with us.

Careers in science in New Zealand suck, particularly at tertiary institutions. They don't pay enough with respect to other professions, they lack a clear career path, there are far too few permanent positions available (because the old farts won't go) and competition for funding is such that after 1,2 or 3 years and a failed grant round (which is the norm) a junior or newly qualified researcher or someone without a permanent position can be out on their ear. And getting another similar job may require moving to another country. Who wants a job like that when you're in your 30s or 40s and want to start a family (or already have one) and have a mortgage to pay?

If you are such a whizz at this , then why don't you start your own business , instead of whinging that nobody wants you?
People will be falling over themselves to take advantage of your expertise , right?