Chief Executive Kirk Hope says for many smaller businesses, the problem with a tax credit scheme was that without sufficient expenditure on R&D there would be no way to claim back a tax credit.

"The Government has listened, and halved the amount of R&D investment required from $100,000 to $50,000. This will place the incentive in the reach of many more smaller businesses.

"Raising the credit itself from 12.5 percent to 15 percent also makes the policy more attractive to more businesses. Along with a broader definition of research and development, these improvements should increase New Zealand’s rate of investment in innovation.

"Businesses surveyed in today’s Mood of the Boardroom survey also showed support for the Callaghan Innovation grants-based system of innovation support, so it is positive to see that both forms of assistance will be available.

"The mission to raise New Zealand business’ investment in innovation is a critical one, as it is only through innovation that businesses and therefore the economy can grow."