A leading business lobby group says the federal government's industry and innovation plan seemed to be designed with union concerns in mind rather than those of business.

The plan includes a $1 billion cut from research and development tax incentives to big business to pay for measures to boost smaller companies.

"You don't help one part of the economy by pulling down another, and clearly the R&D tax incentive has been an important part for large businesses," Australian Chamber of Commerce and Industry chief economist Greg Evans told reporters in Canberra on Monday.

Mr Evans doesn't like the notion of mandating the purchase of Australian origin goods and services for investment projects because many of these are borderline in respect to costs.

"You can't arbitrarily increase their costs without the potential of some impact," he said.

"We have to attract international capital and we can't diminish the competitiveness of Australian business, otherwise it will be self-defeating."

He felt the creation of innovation precincts, or hubs, was harking back to economic policies of the 1970s.

He said while ACCI was consulted on the plan, the end result appeared more aimed at the concerns of unions.

"It's not surprising in the lead up to an election that perhaps this policy has ... had more input from the union movement than the business sector," he said.

Shadow treasurer Joe Hockey said the plan created more uncertainty for business.

"Labor keeps changing the rules of the game, the rules of engagement, and it creates uncertainty for business investment," Mr Hockey told reporters in Sydney.

He said constantly changing the regulation and taxation of business is not going to stimulate innovation, but diminish it.

"You can't regulate your way to prosperity, and Labor doesn't understand that."