The Government says a taxpayer subsidy for Team New Zealand’s arch rival Oracle Racing has been overstated.
Warkworth-based boat-building business Core Builders Composites, a wholly owned subsidiary of Oracle Racing, has been awarded a three-year research and development grant by the Ministry of Business, Innovation and Employment (MBIE).
A news update on MBIE’s website last week appeared to show that the grant was worth $17.25 million.
Economic Development Minister Steven Joyce said this afternoon that the amount of the grant was confidential.
“But it is nothing like the $17 million quoted in media reports to date which is pure fabrication,” he said.
“To put it in context the company has so far claimed considerably less than half a million dollars.”
The $17.25 million figure referred to by MBIE is the maximum available amount which Core Builders Composites can claim on research and development spending over three years.
The Growth Grants enabled qualifying companies to claim 20 per cent of their R&D expenditure, capped at a maximum of $5 million (plus GST) a year.
Mr Joyce said the Growth Grants were non-discretionary and were automatically paid to companies that grew R&D in New Zealand.
To qualify for one of the grants, a company must commit at least $300,000 and spend at least 1.5 per cent of its revenue on R&D which takes place in New Zealand. The company’s spending on R&D must also either remain steady or increase over the three-year period.
Other companies to receive the Growth Grants are accounting software firm Xero and healthcare company Bayer New Zealand.
Core Builders Composites, which is led by two Kiwis Tim Smyth and Mark Turner, manufactures cutting-edge sailing technology and is Oracle Team USA’s official boat-builder.
After moving its workshop to New Zealand in 2010 it built the AC72 catamarans which Oracle used to defend the America’s Cup in San Francisco in 2013.
Prime Minister John Key reiterated this week that Government funding for Team New Zealand’s next America’s Cup bid was “extremely unlikely”, meaning the syndicate will have to secure major corporate sponsorship to compete in the regatta.
Funding was contingent on part of the challenger series being hosted in Auckland and America’s Cup organisers confirmed this week the series would be held in Bermuda.
Mr Key said this did not mean an initial $5 million funding boost was a waste of money, because it was needed to hold the team together and was made at a time when there was still a prospect of a regatta in New Zealand.
by Isaac Davison