R&D grants are currently focused strongly at big business. Primarily because in a small business the management is focused on running the business rather than taking on another full time job to fill in the applications required to get access to Government R&D funding. Yet small business is often where we see the most innovation! I believe small business should be encouraged to grow by being able to claim or depreciate costs that can be attributed to growth and employment. A policy based on growth could be controlled by allowing claims based on actual attributable costs and offset against increased tax paid due to growth of a business i.e. if I spent $10k to get a $100k increase in sales (15k GST paid) then you could claim some or all of the $10k back from the GST paid in that year. similarly costs associated with government compliance should be deductable e.g. costs for software updates every time IRD change a tax table.