€70m in tax breaks for R&D expenditure

Research:There will be total tax breaks of €70 million a year available to companies which boost research and development (R&D) spending.

The Minister for Finance announced that he planned to fix the baseline year for calculating tax relief for R&D at 2003.

This means that any increase above 2003 R&D spending will qualify for the tax breaks.

This is an extension of a three-year-old scheme, but the original proposal was to fix the base year at 2004 from between 2007 and 2009.

Mary Cryan, chairwoman of the State's advisory science council, last night welcomed Mr Cowen's initiative.

"This reaffirms the total commitment to R&D," she said. "And there's something in there for everybody involved in the different segments of R&D.

"Also it adds to the corporation tax story for anyone who wants to establish an R&D capability here."

She pointed out that the scheme would encourage companies not already involved in research to begin looking at innovation.

Alongside this, the Minister for Enterprise, Trade and Employment, Micháel Martin, pledged €5 million to support innovation in small businesses.

This will involve various grant and voucher systems, such as knowledge acquisition grants and information, communications and technology audits, which were recommended by the Small Business Forum.

Ms Cryan also welcomed this initiative last night.