Green Party's billion dollar R&D plan

Russel Norman.

The Green Party wants to inject an additional $1 billion into research and development in New Zealand as part of its key economic strategy, it revealed this morning.

The boost in funding would be distributed to companies via direct grants and tax breaks over the next three years.

Co-leader Russel Norman announced the "headline" economic policy in Wellington this morning.

"Innovation lies at the heart of a smart, green economy. Economies that innovate do better over the long term, creating jobs that pay well," Dr Norman said.

"Our economy is on the wrong track. We invest roughly only half what most other developed countries do on research and development.

"National plans to make this bad situation worse by cutting research investment in real terms by 10.2 per cent over the next three years and by 21 per cent out to 2023/24."

The Greens would invest $100 million more into R&D in 2015/16, $400 million in 2016/17, and $500 million in 2017/18.

New Zealand currently invests around $2.6 billion in R&D, split evenly between government and the private sector. This amounted to just 1.27 per cent of GDP.

A Green Party policy paper said the Government would take a collaborative, partnership approach to innovation with the private sector.

Companies which received large grants could choose to allow the Government to take an equity stake in their business.

Businesses which went into overseas ownership after receiving taxpayer support would have to repay their grant.

Greens would also incentivise the study of engineering, mathematics, computer science and physical sciences by funding an additional 1000 places at New Zealand universities for these subjects.

This would cost around $50 million a year.

An expert working group would be formed to work out the best mechanism to deliver the additional funding.

Dr Norman said: "We are committed to working with experts to design the exact distribution system. Unlike Steven Joyce, we don't think politicians should have their fingers in everyone's pie. That just delivers bad results."

"We want to provide business with the freedom to innovate. A tax credit creates a level playing field and means businesses can get government support for R&D without all the paperwork and bureaucracy inherent in the current system."

The Greens have already announced a proposal for a $120 million green investment bank which would fund new projects in renewable energy and clean technologies.