Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): This is one of the best pieces of legislation that has been reported back to the House from committee in a long time and the reason for that is because it shifts entirely the focus. We've got to recognise that this is a key piece of driving future growth in a sustainable way because as Mr Patterson noted quite rightly the old model doesn't work. We need sustainable growth and also growth that is based on innovation and innovation which doesn't give us those negative externalities such as the emissions and climate change impacts. The great thing about this is that the people who are best placed to make investment decisions make them. Goodness gracious! It almost sounds like a National Party line—that is the people who are going to be spending their own money and putting their own time and effort into these enterprises. It's not for the Government and it's been well shown that the Government can't pick winners. It can't predict the future. Here what we have is the fact that anyone can apply for these tax credits and one of the great things is the lower threshold. At a mere $50000 of research investment anyone can apply for these but it goes all the way up to $120 million and whilst it may be that projections show that say 300 companies will be the main recipients in terms of value there will be huge amounts of smaller companies who might be investing $50000 $100000 or $150000 in research and having great start-up innovations. They are not having to go through some onerous application process for a Callaghan Innovation grant but they are simply having to qualify—qualify by showing that it's genuine research and that it's solving a real problem. The rate itself at 15 percent—and this is another change in the legislation—is generous. It is a real and substantial reduction in the effective cost of research and the generosity just keeps going. It was good to sit on the Finance and Expenditure Committee and work through the fact that there are a whole lot of companies out there in enterprises of all kinds that we need to encourage and not be picky if you like. So with multinational subsidiaries who are operating within New Zealand the fact may be that the ultimate shareholders are overseas but they are doing research in New Zealand. That's good for New Zealand. That is enhancing our economy and so they will qualify. Joint ventures—now not necessarily a model that's used universally or even a lot in this area but sometimes when you need equity and you've got real skills a joint venture is the perfect corporate vehicle for these kinds of enterprises; so they're included as well. It was really useful to work through the software definition including internal software—software that is innovative but might be indeed used internally. So there's a $25 million cap on that. That's a huge amount of money and I think a real recognition that software whilst it's going to be tricky pragmatically to determine exactly where the line is drawn between innovation and business as usual is nevertheless a really important part of innovation. But most importantly this is fair. It's not a bureaucrat deciding who gets a grant and who doesn't—anyone can qualify. This excludes no one. Anyone who thinks they've got a good idea and is willing to put their own money and their own time up can get this tax credit and benefit from it. So we are playing catch up here. We need to absolutely catch up with the rest of the OECD. It's true—one of the earlier speakers from the other side said that there has been an improvement. But it's not enough—it's not fast enough. We're currently at 1.37 percent of GDP. Even if we get to 2 percent that's still below the OECD average but it will be a vast improvement. So that's what we're aiming for. This is about creating a vibrant innovative sustainable economy. This is just another building block in the fantastic economy that this Government is building for New Zealand. Thank you.