22 May 2011

Agriculture sector to pay for Labour research tax credit

9:58 pm on 22 May 2011

Labour says it will introduce tax breaks for research and development - and pay for it by bringing agriculture into the Emissions Trading Scheme earlier than the Government.

Labour leader Phil Goff announced the policy at the party's election year congress in Wellington.

He said a 12.5% tax credit for R&D spending will cost about $160 million dollars per year, or $800 million over five years.

That would be covered entirely by making the agriculture sector pick up the cost of its emissions from 2013 under the ETS.

Mr Goff said agriculture is vital to the economy, but the sector should pay its fair share.

He said R&D investment will help boost the economy.

Earlier, Mr Goff said on Q + A on TVNZ that the Government has cut spending on trades training, but Labour would spend more.

He said he would explain in his speech how Labour would pay for the increases in spending.

Farmers say Labour's buying a fight

Federated Farmers says the Labour Party would start another fight with farmers if it brought them into the Emissions Trading Scheme in 2013 two years earlier than planned.

Federated Farmers president Don Nicholson says farmers are yet to be shown that the Emissions Trading Scheme is reversing climate change.

He says farmers are tiring of what he calls insidious taxes.