Team NZ not in race for Oracle's Govt subsidy

Oracle Team USA taking on Emirates Team New Zealand at the America's Cup in 2013.

Dalton: We didn’t apply for high-tech grant because funding already in place at time.

Team New Zealand did not apply for a subsidy given to arch-rival Oracle's boatbuilder - potentially worth up to $17.25 million - because it was already receiving Government funding, team boss Grant Dalton says.

The Government says more funding for Team New Zealand is "extremely unlikely".

Warkworth-based business Core Builders Composites, a wholly owned subsidiary of Oracle Racing, is one of the recipients of three-year research and development (R&D) grants distributed by the Ministry of Business, Innovation and Employment.

The company, which is led by Kiwis Tim Smyth and Mark Turner, manufactures cutting-edge sailing technology and is Oracle Team USA's official boatbuilder. After moving its workshop to New Zealand in 2010 it built the AC72 catamarans that Oracle used to defend the America's Cup in San Francisco in 2013.

Economic Development Minister Steven Joyce, who is travelling in South America, said the amount of money given to the boatbuilding company through the Callaghan Innovation scheme was confidential.

But he said the company had so far claimed "considerably less than half a million dollars". That money had allowed the firm to create 26 new jobs and to expand into new markets.

Core Builder Composites said it had received only $252,000 so far and its forecast R&D spending was much lower than the maximum amount.

It said the money would be used to help the company survive beyond the America's Cup cycle, and it was hoping to be involved in the Auckland SkyPath project if it went ahead.

The Callaghan Innovation grants were allocated to 23 high-tech companies by Mr Joyce in August, but gained new attention after the ministry published the maximum value of the Core Builders Composite's grant on its website last week. The grants allowed an eligible company to claim back 20 per cent of R&D costs - to a maximum of $17.25 million over three years.

Dalton said his syndicate had been aware of the Callaghan Innovation funding for a few years.

"But it would have been inappropriate for us to apply for it when we were already getting government funding," he said.

The Government provided $5 million to the New Zealand syndicate after the 2013 America's Cup defeat to keep it afloat while it put together a proposal for another bid.

Dalton did not comment further. But a source said the syndicate was "pissed off" any government money had gone to a company owned by billionaire magnate Larry Ellison.

Labour MP Trevor Mallard echoed this comment, saying he was horrified to know the Government was backing an overseas competitor.

Prime Minister John Key all but ruled out further funding for Team New Zealand this week, meaning the syndicate will have to secure corporate sponsorship to launch another bid.

State funding was contingent on part of the challenger series being hosted in Auckland and America's Cup organisers confirmed on Monday the series would be in Bermuda.

Team New Zealand was given $36 million in state funding for its last America's Cup bid.

High-tech subsidies

• Callaghan Innovation Growth Grants allow high-tech companies in NZ to claim back 20 per cent of their R&D costs.

• The funding is capped at $5 million (plus GST) a year. An eligible company can claim up to $17.25 million.

• To qualify, a company must commit at least $300,000 and spend at least 1.5 per cent of its revenue on R&D in NZ.

• 152 companies including accounting software firm Xero and healthcare company Bayer New Zealand have received grants.