Callaghan Growth Grants axed

Science, Research and Innovation Minister Megan Woods explains why they are out.

On Budget 2018 day, the re-introduction of a 12.5% R&D tax break was confirmed.

But the status of a parallel coalition promise – to axe Callaghan Innovation Growth Grants – was not clear.

Late yesterday, Science, Research and Innovation Minister Megan Woods clarified that the $657.2m Growth Grant programme will indeed be shuttered at the end of the current tax year.

"The Growth Grant scheme will be closed to new applicants on March 31, 2019," the minister says.

"Businesses with an active Growth Grant on March 31, 2019, will have the option to continue receiving their grant until March 31, 2020. A temporary grant scheme mirroring the R&D tax incentive will be implemented to provide support for former Growth Grant recipients with insufficient tax liability to use an R&D tax credit immediately."

But while a core focus for Callaghan's 384 staff is now gone, and a sharp round of redundancies is presumably on the way, Dr Woods emphasises it will have a continuing role in support areas.

"All of Callaghan Innovation’s other services and products, including R&D Project Grants [a smaller scheme that typically tops out at $100,000 per grant compared to Growth Grants' $15-25m] and R&D Student Grants are not affected by the R&D Tax Incentive," the minister says.

"Callaghan Innovation will continue to play an important role in fostering R&D growth and innovation in New Zealand, particularly by providing advice and support for startups, innovation accelerators, and business collaborations. Callaghan will continue to deliver complementary R&D funding, such as Getting Started Grants, Project Grants, and Student Grants."

Controversial history
Callaghan Innovation was created by the Key government by fusing Crown agency Industrial Research Ltd with several R&D funding bodies. 

Now Callaghan is essentially being devolved back to the old IRL.

The Key government scrapped the Clark-Cullen 12.5% tax break for R&D — which had been in place for six months — shortly after taking office.

Callaghan Innovation's centrepiece Growth Grant programme constantly attracted flak as some companies allegedly tried to game the system, and others, like PowerbyProxi and F&P Appliances, used the grants to build intellectual property that then went to new offshore owners.

Critics like Sam Morgan said the government should not try to pick winners, and more so when it was looking at a pool of companies who had been rejected by private enterprise.

Growth Grant boosters said New Zealand's remoteness and low population meant a state leg-up through direct grants was necessary (yes, it was a topsy-turvy debate where National was arguing for more hands-on intervention by the state, and Labour for a tax break).

Questions remain
National tweaked the scheme, including adding clawback restrictions in the event of an offshore sale (although exactly how that works has been fuzzy, with discussions dragging on and on in a couple of cases).

And, after a savage review, Callaghan installed a new chief executive and tightened up its act.

But through it all, National kept pouring more money into the agency. Big top-ups with Budget 2016 and Budget 2017 saw Callaghan's four-year Growth Grant budget swell to $657.2m.

The elimination of Growth Grants will, in rough terms, cover the estimated cost of the 12.5% R&D tax credit.

A number of tough questions remain, however. Businesses around the country will be wondering what they will be able to claim as R&D. And, conversely, IRD will want to know what they can't, and what powers it will have to clamp down on those who try to game the system.

And loss-making startups will wonder if they've been left high-and-dry (see more discussion on the pros and cons of R&D tax breaks here).

Those businesses that do make a profit on which to claim an R&D tax credit will be looking across the Tasman to the much more generous tax-break scheme there.

NBR hopes to have an interview with Dr Woods on Monday to resolve some of those issues.


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63 Comments & Questions

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Common sense now prevails

National and Steven Joyce wasted hundreds of millions of dollars on a totally flawed model

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Usual ignorant comment from someone obviously never involved in a startup.

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Agreed it should go but given Labour have gifted Shane Jones the keys to give away not millions but billions of dollars with limited accountability no one should be comfortable that they won’t replace Callaghan with something even worse.

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I suppose it is a mountain of money. But they still have no end of aid money for South Pacific countries and the like, you don't see them canning that.

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Not so

We have a historical and moral responsibility to support our small Pacific neighbours. Just like we rely on the larger countries to support us in many areas.

If Australia and NZ Don t support them we will China controlling them and we will end up totally isolated as well. And we risk more Pacific Island illegal migrants like the 1960s and 1970s as their economies crash. The cost to that would be far more than we find currently - financially and socially.

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Let's stay on topic. Thanks

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A bit of fact checking would help this article (or would help Megan Woods if that’s where the error comes from). For a start, project grants don’t top out at $100k and most of Callaghan staff probably don’t even know what the growth grant is (given it’s such a small part of their overall offer).

Unfortunately the R&D tax credit isn’t any better than the article either. 12.5% of some of the R&D costs deducted from a tax bill will have absolutely zero impact on innovation or R&D plans. No one will hire more engineers and developers for this reason. What it does mean is that R&D already being done will be reported as such thus lifting the stats so that the government can issue a press release saying what a good jobs they have done.

It’s so obvious I’m surprised that there’s discussion about anything else regarding the program...

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Hi Mark,

I can't find any reference to a Project Grant cap, but NBR has covered multiple Project Grants that are in the region of $30,000 to $100,000 and none that are above (compared to Growth Grants that have often been at $15 million to $25 million, dished out at up to $5 million per year in matching funds). 

NBR has carried a lot of discussion on the merits of R&D tax breaks, including Coalition’s R&D tax break ‘unworkable,’ ‘uncompetitive’ and Do R&D tax breaks work?

CK

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Hi Chris - there is no cap on project grants (although the co-funding drops from 40% to 20% over $800k). There’s a section on Callaghan’s website regarding “who got funded” that has the $ values and company if you want to check it out. While businesses could theoretically get up to $5m/year under the growth grant they would have to spend $25m/year on R&D to achieve this (expensed spend and within a whole lot of rules) so only a couple of businesses get anything like that in reality.

Agree that you’ve had some good discussion on the topic with some interesting perspectives -
Cheers.

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Hi again Mark,

Aware of www.callaghaninnovation.govt.nz/grants/grant-recipients, which is where NBR has got the $30K - $100K examples for Project Grants. Guessing they will be capped from this point. Agree many companies would struggle to spend enough on R&D to qualify for the full 5:1 matching funds for Growth Grants.

But there are a number of larger recipients such as the Haier-owned F&P Appliances, the NZX-listed F&P Healthcare, Xero and Orion Health who are quite capable of spending a full $15m or 25m. Frustratingly, Callaghan has never released drawn-down figures for most awards (unlike Project Grants); usually when NBR has quoted a figure it has come from the company itself. 

CK

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Having been involved in the current growth grant scheme since it started in 2013 I know a lot about the type of companies that have received these grants. The current growth grants always provide a 5:1 refund on the eligible R&D spend, up to $5m per year cap, but very few would get the maximum. It is wrong to say, “that many companies would struggle to spend enough on R&D to qualify for the full 5:1 matching funds for growth grants”. Companies like F&P however may not be getting 5:1 as their eligible R&D spend would more than likely exceed $25m a year.

At a tax break of $12.5% F&P that would get less than $5m they could currently be getting but to compensate they are likely to be able to reclassify R&D spend and that only needs to be $40m for them to be no worse off. My guess is that will be the case.

As for Callaghan Innovation could only know what the drawdown of the growth grant for each recipient is after the end of any 12month period as the grant approved is only an estimate and what is claimed can be very different than what was estimated at the time of approval.

A problem with the plans to cancel the scheme is that every funding contract is for 3 years, yet new applicants are not going to be accepted after 2019 and all funding will stop in March 2020, meaning that companies that have made decisions on R&D and have been approved since March 2017 will not get the full 3 years of funding and those that qualified for an extension since March this year may not get their full entitlement. Even those in a profit situation will get a reduced amount on the new scheme.

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You have highlighted one of the biggest problems with the grant. The headline numbers often quoted where clealry BS - people claiming they have a $5m a year grant when in fact they could never claim that.

I am sure that was done to try and justify how important Callagham was etc and to have a large headline number for the government (Joyce).

F&P is classic - did they actually ever do any more R&D than first planned becasue of the grant or did they just use the tax payer to subsidies what they were already doing.

Or if they did do more to claim the grant then the R&D would probably have been the marginal projects etc so the true value of the R&D is less than what Callaghan would claim.

Finally based on feedback why did some people in Callaghan think it was their job to demand additional information etc from clients that complied with the rules - was that just to justify their job / importance? That I know frustrated a number of applicants and simply wasted taxpayer funding.

At least with R&D tax credits there is none of this job creation activity from Callaghan getting in the way.

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Dear Anon
How do you know that the GG didn’t encourage businesses to undertake more risky R&D that they wouldn’t otherwise contemplate?
That’s been my experience....

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It may have. It would be the R&D that was the least commercially viable. But Callaghan will take credit for any R&D success...but what is the pay off from the marginal investment.

Can anyone point to R&D that would not have been done that justifies a $650m investment?

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Agree that there will be more existing R&D reclassified so as to get the tax credit and help the Government claim it has raised R&D activity.
It won't get more scientists, engineers and developers working in R&D. This critical part of innovation in NZ is fobbed off without any discussion. How to employ more of these people in R&D in NZ business certainly needs to be discussed as Mark says its so obvious.

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Interesting reversal as the onus is now on companies to get it right rather than the State to pick winners. Same outcome with eventual wastage, as not everyone can make it big.

"Everything must change, so that it can stay the same"

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Hopefully Vic Cron is first to go. She should be

Now it’s time to put an axe through NZTE. NZTE are wasting the most money picking winners

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My prediction. @clarecurranmp will invite @VicCrone to apply for the CTO job. They will announce that tax credits are more efficient & transparent than continuing with Callaghan Innovation, based on feedback Ms Crone received over the last 12 months.

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What a total disaster that would be.

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You just ruined my Sunday

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I’ll make it better. Even I voted for Phil Goff over her. Curran can’t be that...... oh sorry as you were.

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Unlikely given she was weirdly portrayed as a centre right candidate for the Mayoralty.

Who said she hasn’t applied for the CTO position already though? Since leaving Telcos after a long stint it seems peaking as the head of the colouring in department (marketing), there’s been no track record of staying put anywhere (Xero hardly stopped her from leaving) just an epic dictionary of buzzwords and jargon in everything she says and does.

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Not that this necessarily gives the theory currency,  but while Labour was in opposition, Crone did spread her bets by participating in Andrew Little's Future of Work commission (https://www.labour.org.nz/external_reference_group_for_future_of_work_co...)

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Oh yes I forgot, as I was checklisting reasons to just vote for Goff as he’s probably the better centre right candidate, I did come across this and gag. It was one of many things.

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Derek, is it easier just to hide behind your comments, rather than go in and meet with the CEO's of either organisation and discuss your concerns? Complaining and throwing stones is the easiest job in the world. (No, I don't work for either).

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Hi ‘Anonymous’

Both CEOs have previously declined any interest in meeting and have ignored direct contact. My comments get my point across. I am sure staffers from said companies read them. Read them, then ignore them

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So the 12.5% R&D tax break won't be scammed by business? Yeah right. That's why it was axed in the first place. And if you think that a 12.5% tax break for business isn't corporate welfare, then I have a large patch of jungle in the desert to sell you. Going cheap!

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Yes it will be scammed as the grants are. Is it corporate welfare yes as the grants are.

The R&D tax credits were axed because National did not like them.

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Hilarious, this thread is. Funny watching the roles reverse and the usually nominally right-leaning folk arguing for bureaucracy and social spending, and against what is effectively a tax cut for companies that do productive investment.

It's a good thing if company tax cuts spur productive investment and create jobs. You may have some folk of low character scamming the NZ taxpayer, probably far more than the poor beneficiaries who do so, but that's just character. And the IRD should hit some hard as an example to others.

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Not arguing against tax cuts just pointing out that the grant system is just as likely / more likely to be scammed.

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The original R&D tax break was only in place for a few months before it was axed by the incoming Key government. That was not enough time to make any judgements about its performance either way but I agree it has potential to be scammed. Proponents say IRD has more experience - and more teeth - policing tax issues than Callaghan does in trying to keep its grant recipients in line.

More broadly, the coalition wants to raise R&D spending from 1.28% of GDP (as it is today, having barely moved under the Callaghan regime) to 2%. That would still be shy of the OECD average is 2.38%.

In an earlier article, Lance Wiggs pointed out it's a done-deal that the percentage of "R&D" will rise under the new scheme. After all, business will be incentivised to reclassify as much spending as possible as research and development. 

The trick will be policing that, and accurately measuring if any uptick in R&D has genuinely taken place.

Research across the Tasman indicates a 12.5% tax break won't be enough to move the needle.

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Is NZ’s R&D expenditure % under OECD average? Probably but citing NZ at 1.28% compared to an OECD average of 2.38% ignores the fact that the reported numbers are rubbery.
What is reported both in NZ and in other countries is driven as much, if not more, by considerations other than the accounting standards, including tax and grants. Even if the accounting standards are the only factor, they have enough grey area to allow a lot of flexibility.
So much reported R&D isn’t innovative, and a lot of eligible R&D isn’t reported. As I remarked in the comments section of a Statistics NZ R&D questionnaire a few years ago, its R&D numbers are garbage in, garbage out. Not only are our numbers rubbery, but we compare NZ to dubious benchmarks.

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I also wonder if part of our low R&D spend reflects the high % of low value / commodity output - trees, meat, milk powder and tourism.

What is going to be much more valuable is R&D spend of more innovative / value add sectors.

Plus i agree there is almost zero incentive to report R&D other than to try and get a grant.....and that is not really enough to offset the tax benefit from up front deductions.

Last comment we need to focus on getting value from current spend before we just piss more money down the drain.

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Corporate welfare is bad. Governments trying to pick winners is bad. We old timers have been there and seen how R&D tax credits lead to gaming the system. Expenditure is easily reclassified and unless the IRD have the same in depth knowledge as those in a company they cant pick up the rorts. In addition the R&D expenditure thats worthwhile will get done anyway. If 12.5% is the deal breaker then the project aint worth it in the first place.

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You guys...now it's tax cuts that are bad.

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Just taking the R&D plan from one bad idea back to another old bad idea is not progress.

Labour has been in opposition for 9 years and all they've figured out is this? Is there anybody with any brains in NZ who can come up with a new idea? For R&D spend of all things, this has got to be the least innovative of all the govt. spends I've seen, the irony is thick with this one.

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Our private sector R&D proportion is seriously below OECD averages; worse than the overall average.
While armchair warriors might call it corporate welfare etc, the reality is we operate in a world where most countries find ways to encourage and favour their local technology businesses.
What concerns me is that part of MBIE’s solution is to think the tax credits will encourage foreign businesses to locate here and boost this country’s R&D proportion; they don’t provide any details of what countries they’ll be attracted from, and why we’re more attractive to them.
We’re a member of the D5 high tech group of countries; I’d like to see comparisons with those members’ R&D expenditure and incentive programmes.
From MBIE’s discussion document, it would appear the best NZ businesses invest 1% of revenues on R&D, and yet the SW industry routinely invests well north of 10%; despite that, it seems the new R&D definition may exclude most of their investments.
Finally, no one seems to have picked up on the hugely adverse cash flow implications of tax credits Vs Callaghan; confirming my concerns that none of the bureaucrats OR commentators have any idea of what it’s like to run a SME

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Few NZ software businesses, particularly SMEs, spend “well north of 10%” on R&D. Some may report that they do, and compliant accountants will sign this off, but if you look closely at the relevant accounting standards (NZ IAS 38 and NZ FRS 13) it is plain that much of what is classified as R&D is normal development expenditure.
Moving to a Frascati based definition makes little difference, other than perhaps making it more difficult to justify reclassifying normal expenditure as R&D (see the 2015 Frascati Manual, paras 2.68 to 2.74 at pp 65-67). For example, one exclusion, which describes a big chunk of the NZ software industry, is “the development of business application software and information systems using known methods and existing software tools”.
Maybe MBIE has recognised that subsidising R&D, whether defined by accounting standards or Frascati, is a contrived way to help the software industry. The discussion document talks about work being done on a “variation to the standard definition to ensure it adequately captures R&D software activity” (pg 21).

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David, you clearly know more about these accounting standards than I do.
But I know enough about IAS38 to realise it’s an old “smoke-stack” standard that has little relevance in the 21st Century.
It’s all about those dinosaur industries where research is everything, and development equates to building a plant to manufacture a physical product.
SW all around the world doesn’t fit that model.
If we want to become a high wage economy where our best and brightest WANT to stay in NZ and contribute to our country’s growth, then it’s time to get real and emulate what the likes of Israel, Estonia etc (D5 members) are doing, and what even the UK (D5 member) is aspiring to achieve...
And it’s wonderful you quote P21 of MBIE’s document; but why wasn’t this work completed for inclusion in their document; despite my best efforts I can’t establish who within the industry they’re consulting with. But I reiterate, why wasn’t this aspect addressed in the document?
While accepting they’re not a SME by NZ definitions, I presume you know Orion Health report R&D expenditure of over 30% of revenues

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Will Callaghan stop funding enormous salaries in incubator space? Should companies such as Ice House be forced to stand on their own 2 feet as they promised a long time ago. The model doesn’t work

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Icehouse gets funding, companies are funnelled through them from NZTE, Icehouse takes equity stake and on occasion can make a fortune. How does the tax payer win?

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The funniest thing is that the Icehouse and their band of merry men have actually not made any reasonable money from this as they have failed to actually back any real winners. If they were at least getting some right then the taxpayer might be seeing some real value from all this despite being "ripped" off.

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Prepare for ex-Callaghan staff seeking jobs as innovators in the real world

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They will all be joining IRD as inspectors of R&D tax credit claims. None could make it in the real world. If they had they would never have been at Callaghan in the first place.

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Although they wont work directly for the government, they'll be creaming it through a cost+ "consultancy" entity called IR&D Solutions Ltd.

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R&D grants subsidies call what you like they are all a nonsense if you want business to thrive simply cut the company tax rate to 20% or less and let them get on with it.

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Quite right. Who in their right mind has the time or, the temerity to jump through all the hoops, just to gain a few lousy dollars.

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Agree stupid hoops and not fit for purpose. But if you get say a $100k grant this might equate to say $1m of sales at s 10% margin. I am sure a lot of people would do quite a bit for $1m in sales.

But the whole process could be a lot more straight.

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No one should argue with you Colin
Getting the coy tax rate seriously lowered would be the best possible outcome, but is it achievable in the current environment?

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Before, we had startups telling potential investors that part of their capital strategy was to raise funds and, then they could prove they could fund their part of R&D and effectively leverage investors into a substantial percentage increase in post money valuation, with the "free" uplft from Callaghan. It was a broken, gamed, absurd system. Crone should have done the right thing and shut it down herself if she had any integrity.

Now, I expect government will rely on IAS 38. This in turn will spawn a whole new raft of "Y2K" consultant types charging a "Qualifying expenditure" signoff fee of around 15k/annum, and an equal number of independent "review consultants" employed by IRD to check the checkers... More non-productive people just sucking on the tit..

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How about this...

Callaghan pays a tech incubator $35k to decide if it wants to invest in project A.

Tech Inbutaor takes the $35k +$115k. Then gets a low interest loan from Callaghan for $450k.

Then uses some of the funding to secure grant funding from Callaghan. Tech incubator charges company for services so gets some of its $115k investment back.

So maybe for $100k investment Tech Incubator gets $600k+ from Callaghan.

Of course tech incubator claims the "equity" on those funds.

Some of the tech incubator investment clearly are outside the mandate and in some cases are very small one suspects just to get $450k from Callaghan.

Unfortunately in my view the biggest rort of the system are those being backed by the system.

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Whats even funnier is the Tech incubators think they are being clever by gaming the system and getting a huge chuck of equity in the start-ups. The problem is when those start-ups then go for follow up funding, the Incubators have no cash to invest, and new investors are put off because the incubator has too much equity for no value created, effectively killing the start-up.

I have seen this a few times where the angels have to negotiate with the incubator to reduce their investment in the company before they will invest.

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Agree totally! the ways this has been gamed will become legendary, It makes the old Australian 10BA film funding with 150% tax deductions look childish! How about accumulating a whole bunch of these "investments" that drive up the value of "angel/startup investment" deals done in the market, so politicians feel good and it drives up the expectations of startups to focus on being "investment ready" so they can plug into the rort rather than building real value, and being properly investment ready. Then, using "the market" plus the ramped up Callaghan injected value, to then hit up a bunch of Mum and Dad investors to chuck in a few million, which the promoters can strip 20+% out of upfront, and use the remaining money to prop up poor decisions just because they need "product" to feed into the machine to super charge the pump and suck more money out of Callaghan...! Go you good things! yeeha..!!

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The taxpayer money business model and the exploitation of it, via Callaghan, by the all the incubators and consultants, should now be dispatched to the failed experiment basket.

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A better way to pick winner's is to let the investors do it. Give angel investors tax right offs (like Winston has given the bloodstock industry).

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Worth looking at for startups, but doesn't address the issue of low R&D with established companies.

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it was only $4m for bloodstock wasn't it? not going to go very far in start ups

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Does any company serious about growing and competing internationally really need an ‘incentive’ to invest in R&D? The incentive is staying in business.
The big issue in my opinion is that Australian businesses can access very generous refundable tax credits. Axing growth grants creates a hopeless disparity with Australia.
I view ‘R&D’ credits as simply a WTO & CER loophole for providing export subsidies to their tech sector.

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So many topics raised but lets back to the core. Why do some people in NZ latch onto R&D as a % GDP, how can you compare a country of 340,000 small businesses making up 93% of all businesses with Germany where the auto industry heavily weights R&D and in fact SME R&D is flat-lined. Sweden has high R&D but also high taxes to pay for this allocation and I can't remember what happened to Ericsson,Saab and Volvo. The key issue in NZ is consistency and support for R and separately D and then working out who pays for what. That's been the weakness of the NZ funding and partnership with Government and the private sector for the last 20 years. The UK Industrial Strategy is a good template as is what the Netherlands does through FMO, RVO and Government private sector funds (DGGF). Risk funding is supported by the Government but in conjunction with the private sector and private sector investment expertise. Government funding of higher risk research is by way of grants, industry partnerships and support through incubator funding. Scale-up/seed or development capital is with Government funding for accredited VCTs, tax deductions - the UK SEIS is set at 50% and EIS at 30%. These are meaningful tax breaks so private sector backs the risk. The UK schemes have not changed under successive governments, so there is consistency. The key issue for having a tax deduction for R&D is the rules as has been noted earlier as of course there is now an incentive to write-off normal development expense as research. For software companies, each line of code is in effect development, but actual R&D is a lot less. I argue that R&D is actually two words and each is funded differently, I also argue that R&D as a percentage of GDP is not able to be benchmarked across countries and maybe this is not NZ's Holy Grail but there are some other metrics including productivity that have far more relevance to maintain competitiveness, upskilling and transfer of technology and yes, innovation. NZTE, MFAT and Callaghan should partner with the private sector to lead their investments as they do not have this expertise in-house and NZVIF or a successor is highly relevant to funding early stage and funding new VC funds. It works in Israel, the EU, Switzerland, the Netherlands so why not in NZ.

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The answer to why it does not work in NZ is that we kid ourselves about what we can achieve and there is no real accountability of those being funded.

The eco-system for many is their 3Bs. So why take the risk of looking for real game changing results.

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The biggest risk factors for investments are uncertainty, inconsistency of regulation and taxes, and political intervention. This just happened. The solution to having sustainable programmes is a better dialogue between Government, corporates, the early stage investment community and professional direct investment managers. The goal is a robust system that separates Research funding from Development funding and draws far more on professional investment managers for development stage funding management and oversight. Tax incentives need to be geared to investors for early stage/seed and to corporates at late stage. Accountability, Reporting and Mitigation to investors is the same whether its a grant or an IPO. The issue is whose responsibility is it and why wasn't it put in place. Government should get far away from making investment decisions and outsource this to professionals who are accountable and who can perform, but it can use its balance sheet along the spectrum of risk and to attract private capital.

I disagree in that innovation is there in NZ, consistent funding programmes though are tilted and need better accountability rather than the 120 page annual reports that are too self-promoting. All programmes need to be result driven as all businesses should be, private sector needs to be more engaged with Government as co-investors and in some cases dedicated managers. Then we will lift the ecosystem to where it can grow and develop but now its not realising its potential.

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Very interesting views Michael. All too often in the past policies have been made on the run without the kind of sensible input you offer. The tax rebate was simply picked up from the previous Labour Government. There is no consistency and one could reasonably suspect that if there is a change of Government in 2020 that Joyce's silly scheme won't again see the light of day.
I'm all for much more discussion on this as what is proposed is simply a waste of taxpayers cash and won't see the actual employment of many scientists, engineers and others qualified to undertake R&D. How this is done is the problem as no one in the bureaucracy or the Government seems inclined to seriously listen or discuss.

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Interesting Michael
You are obviously knowledgeable in this area; I’d be keen to learn more, offline if necessary.
Despite people criticising the concepts, I still feel the ultimate Q is “how do we move to becoming a high wage economy”?
I think IT/SW has a large part to play; I’d like us to consider “whatever it takes”, based on learnings from successful countries

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