Labour leader Phil Goff has pledged to restore tax breaks for companies investing in research and development and will pay for its $800 million cost by making farmers pay up under the emissions trading scheme two years earlier.
Mr Goff announced the policy in his keynote address at the party's Congress in Wellington today.
He said restoring the tax credits at a level of 12.5 per cent would cost about $800 million over five years on top of the savings from cancelling National's current R&D grants programmes.
That $800 million would be paid for by making agriculture sector pay under the emissions trading scheme from January 2013, rather than the current 2015. It would also make agriculture pay for its full emissions more quickly, rather than slowly increasing its liability over time.
Mr Goff said the 2015 entry date left taxpayers and other industries subsidising farmers for their pollution. Under Labour's initial scheme, agriculture was scheduled to be covered from January 2013, but National had delayed that by two years.
Mr Goff said even when farmers were covered by the scheme in 2013, they would still only be paying for 10 per cent of their 2005 emissions, plus any growth since then.
"We don't believe this is asking too much. Agriculture is important but all sectors need to pay their fair share."
He said restoring the R&D tax credits which National scrapped in favour of grants would encourage businesses to research and innovate. Labour would restore tax breaks to 12.5 per cent rather than the 15 per cent available under the former Labour government. Mr Goff said fiscal constraints restricted a return to that more generous scheme.
He said high-tech industry was the third largest sector in the economy.
"This is one of the best ways we can lift productivity and growth. We have huge opportunities in areas like health technology and clean technology."
Mr Goff told the delegates Labour wanted to re-strengthen KiwiSaver after the recent cuts in the Budget but he was as yet unable to make any promises because of the state of the government's books.
Mr Goff said in such times, any government had to prepared to take tough decisions required. Labour's proposals were fair, spread the burden more evenly and would better encourage growth in the economy.
Mr Goff also pledged to raise the minimum wage to $15 an hour in its first year in government.
Mr Goff said there was no option other than to reduce debt so tough decisions had to be made.
However he said contrary to National, Labour believed the wealthy should bear more of that load.
Just hours earlier, Council of Trade Unions president Helen Kelly had told the congress it should be increased to $15 an hour "as soon as possible" because wages were not rising to meet the rapidly increasing cost of living.
She said the Government's "tax swindle" had widened the take home pay gap between someone on $30,000 and someone on $150,000 by "a massive $135 a week" without stimulating the economy.
Mr Goff said the last increase in the minimum wage, in April this year, was 25 cents an hour to bring it to $13 and it wasn't enough.
Mr Goff said an increase to $15 an hour would obviously increase the wage bill for those who were paying their workers the minimum wage.
"I don't think it will see people lose their jobs," he said.
"That threat was made every time we lifted the minimum wage when we were in government and unemployment didn't go up, it went down."
He said increasing the minimum wage would ensure a fair wage for everybody.
He said under Labour projects such as the Puhoi to Wellsford "holiday highway" would be put on hold indefinitely.
A missile system for Navy frigates would also be scrapped.
Labour would also reverse National's tax cuts for high income earners.
"I'm not knocking people for being successful. Good on them. But I am telling our top earners today that they need to pay a little more to help reduce our debt and get the economy growing."