From April 1 this year, the Labour Government has introduced a tax break of 15% for companies for money spent on approved research and development projects, estimated to cost $332 million a year in the tax take.
The National Party in its election policies is promising more personal tax cuts and proposing to do away with the research and development tax deduction to help pay for it.
Cancelling the tax break was "a stupid thing to do", Mr Hodgson said.
He said the $332 million estimated saving spread across New Zealand equated to about $1.60 a week per person, and a dumber economy.
Mr Hodgson, along with Minister of Energy David Parker visited two Oamaru companies - Iconix and Gillies Metaltech - yesterday, and research and development was one issue they discussed.
Iconix is a small company which employs 17 people in Oamaru manufacturing hi-tech weighing machines, used mainly in the agricultural industry and sold to 20 countries.
Most are exported, with Europe its biggest market.
Iconix managing director Tim Russell had read the draft proposal for tax breaks on research and development and felt that, at this stage, his company did not qualify.
However, he would have to see, as time went on and it became clearer what projects would qualify for the tax break, whether Iconix could qualify.
Mr Parker said smaller companies often lacked the resources to fully investigate new incentives like the research and development tax break.
Companies like Iconix could qualify and needed to discuss that with their accountants.
