The government will pump an extra $20 million a year into the research and development Growth Grants programme, one of three types of grant administered by its innovation agency, Callaghan Innovation as part of the May 21 Budget.
Prime Minister John Key announced the increase along with a commitment to build four new state schools, three new Maori language immersion kura kaupapa schools, and an extra 241 classrooms, mainly to cope with roll growth in Auckland, in a package of new education spending of 244 million over the next four years.
"Smart, innovative exporters are the key to a prosperous future for New Zealand," Key told a Business New Zealand lunch event in Wellington where he unveiled the first of the traditional drip-feed of Budget announcements prior to its official release by Finance Minister Bill English.
"The really important challenge we have is to increase private sector investment in research and development, where New Zealand continues to lag behind some of the world's leading economies."
The Growth Grants scheme meets 20 percent of a firm's research and development budget, provided the company commits $300,000 and at least 1.5 percent of turnover to research and development activity, capped at $5 million a year and available for two years in the first instance, with review that can see a further three years' funding potentially available.
The $80 million additional commitment over the next four years, announced today, is on top of $566 million of co-funding for research and development by private companies.
"This funding is equivalent to a 14 percent increase in Callaghan Innovation's R&D co-funding budget and will get us closer to our overall target," said Key.
(BusinessDesk receives assistance from Callaghan Innovation to help cover the commercialisation of innovation.)