WELLINGTON, Oct. 25 (Xinhua) -- The New Zealand government on Thursday introduced legislation to parliament that will incentivize more business expenditure on research and development (R&D).

Research, Science and Innovation Minister Megan Woods said the Taxation (Research and Development Tax Credits) Bill will support the government's broader goals of creating "a productive, sustainable and inclusive economy."

"The R&D tax incentive is a key lever for addressing the critical issues New Zealand is facing. We need new solutions to combat issues like climate change, child poverty and homelessness. Research and development will help us find the solutions to these problems," Woods said.

The tax credit will also incentivize businesses to do more R&D, creating more high value jobs and lifting household incomes, Woods said.

"We worked really closely with businesses and experts on the design details of the tax incentive and as a result we made significant changes from the proposed credit," she said, adding this is a key component of the ambitious goal of lifting R&D spending to two percent of New Zealand GDP.

To reach this target we need to incentivize more business expenditure on R&D, which will be supported by a 15-percent tax credit.

Revenue Minister Stuart Nash said the scheme detailed in the bill strikes a balance between including as many businesses as possible, and upholding the integrity of New Zealand's tax system, and will grow innovation by supporting businesses to undertake genuine R&D.