Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill

If you will indulge me, I would just like to point out one thing, if I may, please. If you go—the Minister of Revenue may like to do this, actually—to clause 261B, “Section OB 1 amended (Definitions)”, subclause (1) and subclause (2) are, actually, exactly the same. So you may want to remove one or two of those. It is just something that needs to be done. We will not complain if you do it without bringing the bill back to the Finance and Expenditure Committee, but it just, you know, tidies up the legislation.

💬 Hon Michael Woodhouse: Section what?

It is in clause 261B. This is called the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. This is one of those bills where it covers everything, but what the Government does is it sneaks things in there. So it sounds really good. It sneaks them in there. I mean, we are all into research and development. We all want to see the research and development spend increase—there is no doubt about that. We have one of the lowest levels of research and development in the OECD, and we understand that it is imperative that our research and development spend increases if we are going to lift this economy and have a knowledge-based way forward. It is important. This is what our economy is built on.

However—and there is always a “however”—this is very, very piecemeal. David Clark is probably going to talk about this a little bit later in his 5-minute contribution, but we would have gone—

💬 Dr David Clark: 10 minutes.

—10 minute contribution—a lot further than this bill does. This is really tinkering around the edges, and even in the select committee it was admitted that this is a little bit of: “Suck it and see. Let’s see how this thing goes.” There are a couple of definitions that are not that clear. Are we allowed to claim back employees’ salaries or contractors’ wages, etc., etc.? But it just tinkers around the edges.

This is not the sort of bill that is going to drive the research and development spend and that is going to allow these little innovative companies to really grow into listed organisations or go global or to be the sort of organisation that we need to drive economic growth in this country. This is tinkering around the edges. And to say “remedial matters”—the dictionary definition of remedial matters is “to remedy or to cure”. We do not agree that this bill does much of that.

We certainly do not agree with Part 2, which is about the annual rates for 2015-16. We think they are inequitable. I remember Dr Clark speaking very eloquently about this last year when we talked about the fact that tax needs to be equitable to be able to deliver the sorts of outcomes that society demands right across all our communities. These rates do not do that.

There is nothing remedial about the rates that are in Part 2 of this bill. In fact, there are a number of tax bills that are coming before the Finance and Expenditure Committee at the moment, and Labour is lukewarm on a lot of them. But none of them are really delivering the sort of tax reform that is needed in this country. We have had a whole number of bills—a series of three—that even the submitters became confused about. They started submitting on bills that were not before the committee. We had to gently remind them, you know: “If you put your submission in and come back in 3 weeks’ time, we’d love to hear what you have to say.” Even the submitters were confused on this, let alone the general public. As for this bill, it could have been and it should have been so much better.

The research and development tax credit is something that is really needed in this country in order to drive the growth that Andrew Bayly has been involved with for a long time. Mr Bayly must read this sort of stuff, sort of mop his brow, and say “We can do better.”, but he is too scared to stand up and let Mr English, or whoever is in charge of this sort of stuff, know that.

It should be better, could be better—must do better. This is the difference between the National Government and the next Labour Government. We will do better. We will put out research and development tax policy that will make a difference. And, yes, there will be another research and development remedial matters tax bill back in this Parliament before 3 years have passed. It will be a Labour bill, and it will make a serious difference to the small to medium enterprises. It is not going to be the sort of bill that gives $50 million to Sanford. Well, why would you? Well, I suppose he is the president of the National Party, so it helps.

This is going to be the sort of bill that gives meaningful support to those businesses that we want to grow, that have a mandate to grow. We are going to give them a mandate to grow. It is not about cheap money; it is not about a handout. It is about a hand up and a help. We understand that this business sector is the backbone of the economy. We understand that research and development must happen. We understand on this side that research and development deserves a hell of a lot better attention than this bill gives it.

I want to take just a short intervention on the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, which is my first as Minister of Revenue, a portfolio that I picked up from my predecessor, the Hon Todd McClay. I want to wish him all the best. He has had, I think, a cracking good start as Minister of Trade, in being able to sign that fantastic agreement, the Trans-Pacific Partnership agreement.

I want to address just a couple of things that Mr Nash has raised in respect of the title and commencement clauses. In his broad overview, he pointed out, firstly, a potential duplication in a clause. I have checked with my officials, and I am very happy to report that there is no duplication; there are minor changes to it, and they affect different parts of various pieces of legislation. But I do applaud him. I was not sure whether he was even awake at one stage prior to his intervention, but he is clearly trying very hard to make that contribution.

What we heard from Mr Nash’s intervention is classic Labour Party. It wants to raise income tax. It wants to get back into Government and be the tax and spend Government that it always was. Mr Nash made it clear that as soon as Labour gets back into Government, it will raise tax. It will take money from every hard-working New Zealander in this country because it knows how to spend it better than the New Zealand taxpayer. So there it is. Campaign 2017 has already started with a $1.5 billion bribe to the citizens of New Zealand, which Labour knows it cannot pay unless it takes more money out of the pockets of the New Zealand taxpayer.

I can reassure this Committee and the people of New Zealand that the National Party and the National-led Government are very clear that the path to prosperity is not tax and spend. So when confirming the annual rates for 2015-16, which need to be in place and commenced by 1 April 2016, I can confirm with confidence not only that the tax rates will remain the same as they are now but also that if the New Zealand taxpayer wants to see the burden on their pockets maintained or reduced, then only a National-led Government will give them that. I think we heard it directly from the horse’s mouth. Mr Nash has confirmed unequivocally that a Labour-led Government will want to take more money out of the pockets of New Zealanders, and we will not.

I appreciate the member Michael Woodhouse’s wide-ranging and interesting contribution. I intend to focus on the title and commencement clauses myself, but I understand now that the debate has been broadened, so I would not wish to limit any other colleagues who want to expand their portfolio of complaints against the Government beyond those that you might expect to find in a tax bill.

This bill does confirm the existing tax structure—in that, the Minister of Revenue is correct. It affirms the tax structure that we have currently, which sees this Government borrowing more money than any other Government in New Zealand history. This is the Government that has borrowed more than any other Government in New Zealand history, and so it is a bit rich for that Minister to come to the Committee and talk about a tax and spend Labour Party. His Government has borrowed more than Muldoon’s Government did. That is how shameless it has been. It has returned one surplus. Despite years and years and years and years of promises it has delivered but one surplus to this country, and it was manufactured. This is the borrow and borrow and borrow and borrow and borrow and hope Government—this Government right here in the House that is pushing through a bill that it is borrowing to pay for.

We are being asked to support it. Let me make it clear. We will support it on the basis that we need a robust tax system, on the basis that the remedial changes in this bill help to make our tax system more robust, but we do not support the rates of tax in there that that Government pushed through to ensure that the wealthiest 10 percent got 40 percent of the value of the 2010 tax cuts. The wealthiest 10 percent got 40 percent of the value, while the bottom 20 percent earning the least got just 2 percent—just 2 percent—of the value of those tax cuts. Of course, we know that at the same time John Key broke his promise—broke his promise; that was the start of many broken promises—not to put up GST. That meant that the small, the very modest, pay increase that people thought they were getting with that initial tax cut—that those at the bottom of the tax structure and in the middle of the tax structure thought they were getting—was swallowed up immediately in that GST increase.

Of course, this change that that Government made in 2010, which we are affirming again today, is part of what has driven that growth in inequality under this Government that sees middle New Zealand getting left further and further behind—robbed of opportunities, robbed of the Kiwi Dream. So I want to suggest a title for this bill, an alternative title, which is to replace the material in brackets with the words (Suffocating the Kiwi Dream), because that is what this bill does. That is one of the things this bill does. It does the remedial matters; I am happy to leave that part in the title because we support the remedial matters. What we do not support is this constant drip, drip, drip of making sure that the 1 percent have that little bit more in their pockets. Those who are in the Cabinet in-club get that little bit of extra handout, while those in small business put their own shirts on the line day after day. Small-business people put their shirts on the line and face excess regulation under this Government. Tax changes and child support changes and constant changes and more red tape from this Government, which cripples middle New Zealanders as they try to do their bit to get ahead—all so that the top 1 percent can have their interests looked after and so that the very, very close friends, the in-club of the National Party, can enjoy their lifestyle in Hawaii.

I want to suggest a second alternative title for this bill, and that is the “Can They Deliver Bill”, because one of the issues that I do not feel has been covered enough in the debate so far is the history that goes with the child support reforms that we are dealing with here today. In here are child support reforms that are “intended to reduce the implementation costs”. Why would the Government be trying to reduce the implementation costs of our new child support changes? Well, the answer is that originally the changes were estimated to cost $30 million—$30 million. Then what happened? That was in 2011. In 2014 the cost estimate for changes to the child support system blew out to $210 million. That is a sevenfold increase—a sevenfold increase.

Is anyone on that side of the Chamber prepared to defend a sevenfold increase in the cost of implementing the child support changes? I hear silence opposite.

It had blown out to $210 million in 2014, and on top of that the implementation of the child support changes was delayed by a year—by a year. So families that had made arrangements based on the existing child support legislation—including things like putting money into a mortgage, or investing in new clothes for their kids and so on, because they thought they had a bit more money in their pockets—were forced to go back to the old system and could not necessarily cover the debts for all the changes they had made.

That was a treacherous mistake by this Government, but it was also a costly one because the taxpayer picks up the extra hundreds of millions of dollars to implement this legislation. Now we are told this bill aims to reduce the implementation costs to $163 million for that legislation. Remember, the original estimate in 2011 was $30 million. Now the Government is hoping, through these changes—which make it a less effective system, I might add—to reduce the costs to $163 million.

This is a Government that is not across the basic details. It was told years ago, in its first briefing to the incoming Minister—in fact, Peter Dunne knew about it in the previous regime—that the tax system needed to be upgraded. The Government has dillied and dallied and it has taken for ever and it has pushed out the capital spend, and we have a tax system that is creaking. We now find ourselves in this Parliament putting through legislation that a few months later we will have to reverse out, and there are all the costs of running legislation through Parliament—and they are not insignificant, I might add. This is a Government that is not across the basics, and so we ask ourselves, and we could rightfully put in the title, “Child Support Changes (Can They Deliver?) Bill”, because I am sceptical—I am sceptical. We have twice brought changes in child support legislation back to this Committee, and we have seen the costs mount further and further.

I wish the new Minister of Revenue well in this responsibility, because he does have a challenge ahead of him. It is not his doing in this case, I would say, although there is an element of collective Cabinet responsibility. The problems go back beyond this Minister. He has his work cut out for him, and I do wish him well in achieving a fair tax system that does the duty, which we all want it to do, of collecting taxes so that we can afford as a community to supply things like roads and hospitals and schools—those things we all need but cannot afford from our own pockets. We need an effective tax system. We need a tax system that collects the revenue to afford those things that we need as a community if we want to live in a modern way and in a way that ensures our future prosperity: hospitals, schools, roads, and, at its most basic, a justice system, and so on. So I wish the Minister well with that, but I do question whether this Government will be able to deliver on the things that are promised in this bill.

I am also concerned, as I said at the outset of my speech, about the chilling effect of this legislation, which is slowly suffocating the Kiwi Dream through reinforcing the kinds of tax changes that have driven a 15 percent anchor on our economy over recent decades, according to the OECD. There is growing inequality. We have the lowest homeownership rate in 60 years in this country. The gap has been growing every year, under this Government, between the very well-off and the rest of New Zealand. Those people in middle New Zealand who aspired to own their own home, who might have aspired to own their own business, and so on are struggling more and more and more as this Government looks after the interests of a very select in-crowd, those who are its closest mates.

We challenge the Government to try to shift to being a fairer Government, but we ask in this bill that consideration be given to the name change of “Suffocating the Kiwi Dream Bill” or “Can They Deliver on the Child Support Promises Bill”. We will support the bill for the fact that it makes our tax system, through the remedial changes, more robust to do the basic things a tax system has to do, but we do it with reservations, and we put forward those suggestions for consideration. I am interested to hear whether the Minister will consider them in a thoughtful way and respond, because these changes in here are political. They do have an important bearing, also, on the future shape of our society. Tax bills often are considered not very exciting, but the stuff that goes through in this bill affects every single New Zealander.

I think my colleague Dr David Clark has covered very well the broad outline of our concerns on this bill, but I want to make reference to the contribution that the Minister of Revenue made a few moments ago. Two things struck me about it. It was his first contribution as the Minister of Revenue, and in it he managed to do two things. The first of those was to contradict the Prime Minister, which is not a good thing, I would suggest, to do in his very first speech as the Minister of Revenue, and I will explain that in a moment. But the other thing he did was the classic National approach. The Labour Party comes forward with a policy proposal to offer 3 years’ free post - high school training and education—

💬 Chris Bishop: A terrible policy.

—which is a contribution, an investment in the future of New Zealand. “Donald Trump Junior” over there does not like it, but actually it is an investment in the future of New Zealanders. It is an investment in making sure we have people who are work-ready—

💬 Alastair Scott: An expensive bribe.

—who are able to deal with the changes that are coming in the workforce, and who will be the highly skilled workers whom employers implore us for day after day, saying: “The thing we can’t find in New Zealand are the skilled workers who will drive productivity and innovation.” Our policy is an investment in that. It is an investment. Mr Scott called it a bribe. Well, there is the great irony, because the “bribe” is being funded from the same funding that the Prime Minister says is going to be used for tax cuts—and that is the bribe. That is the bribe, because that is not an investment in the future of New Zealand and the long-term contribution that the next generation of New Zealanders can make if they get that chance at education and training. Once again from National, it will be tax cuts that benefit the wealthy. It will be tax cuts that go to its mates, rather than an investment that all New Zealanders can be a part of.

My challenge to the members opposite is that they get up and defend tax cuts versus an investment in our future. We are more than happy on this side of the Chamber to have the debate with you and with New Zealand about which is the best approach. Should we invest in the future of New Zealanders, or should we fritter it away in tax cuts for the National Party’s mates? I welcome that debate. The Chair is urging me to come back to the bill.

The CHAIRPERSON (Lindsay Tisch): It would be good.

Well, I was only responding to the Minister—

The CHAIRPERSON (Lindsay Tisch): I know.

—and his contribution. Clause 1 of this bill asks us to talk about the title and, as my colleague David Clark has said, there are many alternative titles. I want to make reference to a couple of points here. The first of those is that two words do not appear in the title—and, actually, in all honesty—they should, and those words are to do with child support changes. That is a big part of what this bill is actually about. And as my colleague David Clark mentioned, this is not Michael Woodhouse’s fault, so he gets off the hook on this. The process of making changes to the child support system has been a bit of a shambles under a couple of Ministers. The most recent of them, Todd McClay, did his best, I suspect, to try to undo some of the damage.

To recap, the situation that we came into when this bill was introduced to the House was that we discovered that the cost of implementing the IT system for child support changes had blown out from an initial $30 million—a fairly substantial sum—to $163 million. What we actually discovered when we got into the select committee process and the Commissioner of Inland Revenue came in was that, actually, it was more than that. The full roll-out of the child support IT system was going to be worth $225 million, and they just decided not to do phase 2 of it at the moment.

There were strong recommendations from Treasury, from the State Services Commission, and from the Government Chief Information Officer to wait until the vast project changing the IT system at the Inland Revenue Department (IRD) overall could be done and these child support system changes could be incorporated into it. The Government rejected that advice. The Government decided to press on, and as a result we now see a potential bill of up around $163 million for the system. That is the equivalent of a quarter of the annual child support payments that the IRD collects. That is a huge amount of money, and not a cent of it is going to be going into those kids themselves and their well-being. The words “child support” should be in the title. The Government should be prepared to acknowledge the fact that it actually got this wrong and is having to undo a stuff-up. It should acknowledge that in the bill.

The annual rates element of the bill is here in the title, and that is as it should be. Our support for this legislation does not indicate our support for those particular rates. I do challenge the Government members to stand up and say whether they believe the tax system at the moment in New Zealand is balanced and whether it is fair. Are people paying their fair share to ensure that all New Zealanders get a fair go? The answer to that question is no. This bill should have in its title the idea that there are missed opportunities.

Time after time this Government brings tax legislation to this House that, yes, deals with some of the minor changes, the remedial changes, and the inefficiencies. Fantastic, great, but where is the vision? Where is the vision for a tax system that actually sets New Zealand up for the future, gives everybody a fair go, and recognises that those who have the most can pay a little more to ensure that all New Zealanders get the chances and the opportunities that they deserve? That is what is missing from this legislation and, unfortunately, it is missing time and time again from other tax legislation.

The other matter mentioned in the title is research and development, and my colleague Stuart Nash covered this pretty well in his contribution. But I want to make one point, and it arises from a visit I made with Mr Nash to the Lowe Corporation in Hawke’s Bay. Andy Lowe was a very busy man, he was with us that day, and just as he stood up and he walked out the door—this was last year—he swung around back to us, and he said: “R and D tax credits—you’ve got to do them.” That was what he said. What Andy Lowe was saying by that was that the grant-based system that is now operated under Steven Joyce, also known as the picking winners system operating under Steven Joyce, is not enough when it comes to research and development in New Zealand. What businesses are telling us when they say to the Labour Party “We support your R and D tax credit policy.” is that it provides certainty, a surety—

💬 Chris Bishop: Stuart said that you wouldn’t give money to Sanford. Stuart said Sanford got nothing.

—for them that they can invest in research and development. They do not have to be at the whim of Steven Joyce, and when Chris Bishop was there I am sure he had his list of winners—when he was Steven Joyce’s adviser—that he picked out and said: “These are the ones we’ll pick this time. These are the people who will get the R and D support.” We do not think that is good enough, on this side of the Chamber. What we think is necessary is that there is a broad base to research and development, that all companies in New Zealand know that that is where they can invest, and that they know they have got the support of the Government. The changes in the bill are tinkering. They are not dealing with the fundamental issue of how we lift research and development to drive a productive economy. Again, it is a missed opportunity in this bill.

In the brief time I have remaining I want to refer to the other matters, and they are the commencement dates in clause 2. One could make a very—I know many of my colleagues want to pick this up—lengthy contribution looking at the commencement dates, plural, that appear in clause 2 because they range all over the place. I mentioned in an earlier call that one of them goes back to 2008-09, but in clause 2(5) we discover that section 250(3) comes into force on 10 October 2000—16 years ago. I wonder whether members opposite would like to help explain to us quite how that has occurred.

Various other commencement dates appear, and we do understand on this side of the House that when you are amending different Acts of Parliament that will happen. But to have a clause that goes all the way back to 2000—I think that Chris Bishop was probably running around in short pants in the Hutt Valley in 2000, listening to Blindspott or something like that, and probably even then would have lost to Trevor Mallard in a bike race.

💬 Chris Bishop: He was a very good MP back then.

Oh, there we go. So Chris Bishop would have been there in 2000, and perhaps he could explain to us quite how we have a clause that gives a provision a commencement date of 2000.

The Labour Party will be supporting this bill, but we are extremely disappointed that once again a taxation bill has come here that fails to reflect what New Zealanders want—a fair tax system, where people pay their fair share so everybody gets a fair go. Unsurprisingly, the National Government does not believe in that.

This is a fairly—what would you say—innocuous sounding bill, the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. You would think it was just a technical little series of remedial amendments, but actually it is much more than that for the reasons that my good colleagues have just said.

Let us touch base on what the rates are saying. Let us touch base on where the Inland Revenue Department and child support are at, and then let us talk about the choice that New Zealand faces between two different economic futures—a dumb one and a high-value, high-knowledge, high-tech one—and how this bill misses the boat in helping us turn that corner. Let us turn first to the rates.

This bill just perpetuates—there is no other word for it—the lie that National told to New Zealanders. The lie was that it would not raise GST and New Zealanders would have a fair tax system. What it did was raise GST, and it made the tax system less fair by disproportionately giving tax cuts to the top end. So 40 percent of the money, New Zealanders’ money, went to the top 10 percent of income earners, the ones who already had more—people like us in this Chamber. We did not need it. We did not want it. But National’s rich mates were greedy, so that is why National got elected. It was the only significant economic measure it took in its first term.

The Government screwed the scrum from the average joe to the rich, and this bill entrenches that inequity for a further year. Government members can dress it up in John Key’s social media. They can go and stand in a cage on morning radio. They can do whatever modern public relations thinks it can buy, but it does not change the fact that National has made New Zealand less fair and less prosperous—less fair and less prosperous.

Let us turn to one other aspect of the “fairness”: child support. We all know that when families go pear-shaped, they can go really pear-shaped. Kids depend upon fair payments between parents who have separated, so that they can be looked after. Child support is a mess. Child support debt is going through the roof, the new formula is not working properly, and New Zealand children are missing out. They are the meat in the grindstone, and it is just not working. This is the bill that is supposed to fix child support. What does it do? Oh, it votes another $160 million to fix the computer system. What a wasted opportunity.

We should be talking about real, systemic changes to child support that mean separated parents can work together better for the interests of their children. That includes, for separated, non-custodial parents—usually the father—the penalty rates being set at a level, and there being a process so that when they get behind and get outside the system they can get back in again, so that they can be real parents to their children. The amount of suffering that is going on in our country because of the anguish of those parents does not bear thinking about. Here is a bill that could have made real, substantive change in dealing with that problem, and it has not. It is a missed opportunity.

Let us turn to what I think is emblematic of the choice we face between two economic futures. One is that we consign ourselves to being producers of raw commodities. Milk powder—that is worth less and less on world markets, sadly. I am not knocking the primary sector—it is our backbone. There are a lot of wonderful, hard-working people out there, doing their very best to make New Zealand better and to raise their families, and good on them. We should always be world’s best in primary agriculture. Do you know what? That is not going to be enough.

Raising New Zealand’s income standards, providing for all our families, building a great future for our children so that our grandkids do not live overseas—that requires more than milking cows more efficiently. That requires us to have a research and development system that generates world-class innovation. We have got two problems: No. 1, we do not have enough research and development, and, No. 2, it does not work well.

Let us deconstruct that. We do not have enough of it. We invest 1.2 percent of GDP in research and development. The OECD average—the rich country average—is more than double that, at 2.5 percent. And the small, smart country average—the countries that we want to compare ourselves with; Singapore, Sweden, Switzerland, Israel, Denmark—those countries invest an average of 3.3 percent. New Zealand invests 1.2 percent. We do not do enough. We do not do enough, and this bill again misses the opportunity to fix the system.

Why are the incentives wrong? We all know that when someone invests in risky research and development, they are doing it for themselves, but they cannot capture all of the benefits of that investment because, if it works, the whole market benefits. They cannot take all of that. That is why, around the world, Governments sweeten the tax system or provide grants—or, usually, both—so that innovative young companies can get a leg-up, can create jobs, can expand, and often are born global. So it is really crucial that we do that.

What has guided best practice? It is two things. It is a baseline sweetener of the tax system, usually delivered through a near-universal or universal tax credit, which is what was in Labour’s manifesto last time around, and I hope will be again. Then, on top of that, it is specific interventions in high-value or high-potential industries or regions to encourage growth where it matters most. It is not picking winners at the company level, but strategically aligning the incentives and de-risking business enterprise so that people know what the game plan is.

What have we got in the current system, which this bill tinkers with—with black hole expenditure—but does not demur from? We have got a grant system through Callaghan Innovation, which is spectacularly the worst of both worlds.

💬 Chris Bishop: Rubbish.

It is not—no, no, it is not rubbish. It is not a universal tax credit system that is easy to implement and fair to all businesses and actually allows market prices to work, nor is it a judicious strategic intervention. What it is is an “automatic”, criteria-based grant system with a huge bureaucratic overhead that as often as not ends up with investments that go spectacularly pear-shaped. For example, Callaghan Innovation gave a research and development grant to—wait for it—a subsidiary company of Larry Ellison’s Oracle America’s Cup bid when it was racing against New Zealand. The taxpayer paid one of the world’s greatest billionaires—the guy with the huge superyacht—to race against our team through the system.

💬 Meka Whaitiri: Treason!

You would not believe it, would you? It is unbelievably stupid. It is unbelievably brain-dead.

💬 Chris Bishop: Tell us about Sovereign Yachts.

Chris Bishop, I think, is probably smart enough to know the truth of that. How about dishing out grants to the subsidiaries of German multinationals? As soon as the company got the grant, it unbolted and took it back to Germany. That was Bayer. Or a publishing company that was so dodgy that no sooner had it pocketed the money than it was off to the Serious Fraud Office? That one has not even been ironed out yet. Those are the kinds of examples we get of an “automatic” grant system, which is still bureaucratic but to which no one is applying a common-sense test. I want to ask the Minister in the chair, the Hon Michael Woodhouse—with the black hole expenditure provisions in this bill, is he going to look at changing that? Is he going to look at making that smarter? Is he going to look at having the horse in front of the cart rather than behind, and having the fence at the top of that cliff, not at the bottom?

What is wrong with the detail of that black hole expenditure? Well, for example, the clawback on derecognised non-depreciable assets is a tiny token of what was in Labour’s policy, which was an increase in the depreciation rate on high-tech plant and equipment. So alongside a baseline research and development tax credit, we increased the depreciation rate to match the actual life of high-tech gear—typically 2 to 3 years. But this rate is based on at least a 5-year life. Who in this country is using a computer today that they bought 5 years ago? Well, they are probably not in the leading businesses. If the Minister was the Minister of Foreign Affairs, the Ministry of Foreign Affairs and Trade would still be using a quill pen. It is uneven, is it not? But this measure does not fix it.

Here we have a bill—I am summing up, Mr Chair—with a boring little name that completely misses the boat. It perpetuates inequitable tax rates. It fails to deal with the inequities of child support, but just basically votes more money for an overblown computer system. And it completely gets it wrong in terms of a decent and sensible tax structure to do what I think both sides of the House want, which is to encourage innovative businesses and to give enterprising Kiwis—the job creators, the wealth creators—an equal hand up so that they can compete in international markets to win. That is what we believe in—backing Kiwi businesses to go global with a good tax structure, with baseline research and development tax credits, and an intelligent system of interventions.

I move, That the question be now put.