23 May 2011

Labour defends research and development plan

9:59 pm on 23 May 2011

Labour leader Phil Goff says no more than $800 million will be spent on his party's research and development tax credit.

If it forms the next government after the November election, Labour says it would introduce a 12.5% RD tax credit and pay for it by bring farming into the emissions trading scheme in 2013, earlier than planned.

Federated Farmers has objected, while Business New Zealand chief executive Phil O'Reilly says bringing farmers into the Emissions Trading Scheme too early would damage the economy.

Labour puts the cost of the tax credit at $800 million over five years, but the Government claims the cost would be far higher.

Mr Goff says Labour has done its figures carefully. We will not be spending more than $800 million; that's the amount of money that we've got available - that's the amount that will be spent.

He will not say how the cost will be contained if more companies than expected qualify for the tax break.

You can insist that the money you've got to spend in any programme in any particular year is at a particular level, and we'll do that.

Mr Goff says details of the policy have still to be worked out.

Earlier, he told Morning Report the investment in research will give New Zealand a smart economy which will be able to compete on the world stage.

We're not beating up on farmers, we're simply saying they've got to pay their fair share, he said.

The president of the Association of Scientists, James Renwick, says earlier entry of agriculture to the Emissions Trading Scheme makes sense, because half the country's total emissions come from the sector.

Dr Renwick says it would be a great signal to the world that New Zealand is serious about reducing emissions, and would be good for the country's clean, green image.