Scott Alastair; Dyson RuthALASTAIR SCOTT (National—Wairarapa): Thank you Madam Speaker. I thought the previous speaker Shane Jones would surely have taken a little more time. He's known for his robust debates and hot air and he's managed to speak for 30 seconds which—and also the previous speaker across the other side Professor Russell—Dr Deborah Russell: Dr not Professor—never Professor.ALASTAIR SCOTT: Dr—sorry sorry. Dr Deborah Russell chair of the Finance and Expenditure Committee—again I thought she would have something to say on this bill. It's a really very important bill.This bill particularly this omnibus bill does a lot of things. Firstly it does set the rates of tax for the year. Both previous speakers on this side have said that we like lower taxes we like less tax we want more money in people's pockets and the Green MP said Well but you increased GST rates back in 2010." as Simeon Brown mentioned but she forgets to realise that the marginal rates were cut at the same time a tax take - neutral policy which incentivised people to work harder because that's what marginal tax rates are all about. Marginal tax rates determine the amount per dollar of gross earnings that is kept and it also disincentivised by increasing the GST—well it incentivised less spending; it disincentivised spending because that's what a GST is it's a tax on consumption. That was the purpose of that move to increase the incentives for people to turn up to work every day to increase their money in their pocket so that they might then determine for themselves what they are to do with that money in their pocket. Of course if one is to spend the money—you can either save it spend it or invest it and of course if you wish to spend it or consume it you would be taxed at that higher rate of GST on the day. Of course the investing was not taxed—there was no investment tax—and there was of course no savings tax or taxes relating to those other two legs if you like of the three-legged chair. So I just wanted to clarify that.My colleagues have talked about the effect of inflation and the increase in gross wages as opposed to real wages and the effects that static tax rates have on the real wealth of the individual and as Andrew Bayly and Simeon Brown have traversed that I will not repeat only to say that our policy is to inflation-proof the marginal tax rates so that only increase in real wages would be caught in an increased marginal tax rate not the gross increase in the person's income.Turning to the bill it does a lot of things. A lot of it's actually quite good. I'm going to go through a couple of a couple of things around the—well where should we start? Let's talk about the—and this is why I was so surprised that Deborah Russell didn't mention some of these things—technicalities that involve the research and development changes if you like how we need to in select committee consider what is going around the rest of the world when it comes to R & D tax credits or rebates or environments because it's easy for an international company to take advantage of one country's tax legislation over another and if we are to incentivise certain things without considering that there is opportunity for international players to game our system and of course we certainly don't want that to occur. So there's a lot of work just in the R & D side of this bill.There's always been a lot of work put around the rules to do with trading and property. It's been there in that legislation for a very long time that if one buys and sells property or is in the habit of buying and selling property that property becomes part of that person's stock or trading stock. So when one buys and sells a widget we're taxed on the gain and so it is with someone who trades in houses. That's been an underlying principle in the Income Tax Act for years and years. We clarified that a few years ago and this current Government has increased the window to five years around what is deemed to be tradable profit when one is dealing with properties. Now we have a situation here today in this bill dealing with the same issue and also closing up loopholes that are being taken advantage of and which I think is a good part of the bill that it does restrict or does not enable people of similar family names or cousins or friends or associates to appear to be separate in their tradings. It binds those people together considers them one and enables—Hon Shane Jones: Associated persons test.ALASTAIR SCOTT: That's what I'm trying to say. Thank you very much Mr Jones. The associated persons test is clarified and so will capture more people who are trading in property. So that's a good bit but quite complex and I think deserves a bit of time in select committee.There is another piece that I'd like to turn my attention to which is a good piece of the bill which relates to M. bovis. This part of the bill is specific to the rural sector where farmers have received compensation because they've had their herds culled. That is you know sort of like you're selling all your stock at once: you've got a massive revenue income stream and so therefore it's taxed and that's obviously quite unfair because the farmer would not normally do that. The farmer would not normally sell all his stock on hand in one hit but the M. bovis has forced the farmers to have their herds culled are compensated for that quite rightly so and at the moment that is income but this allows that income to be spread over a six-year period. So that's another good part of this bill.I think this bill is a missed opportunity. I've talked about the marginal tax rates and how that could be linked to inflation but there are also other opportunities that could have been in this bill to restore confidence in the marketplace to restore confidence in the general economy. The wage subsidy does some of that but there are other things that could be in this bill which enable more cash to be put into the system and targeted incentives. I'm talking about the GST refund proposal from this side of the House. That would enable GST to be refunded from those who pay the GST. So the larger the business the more turnover—it's a turnover-based incentive if you like—the more turnover the more GDP that you are creating as a business would see you benefit the most because it would be based on that the GST that the business would normally have paid away. So I think that's a good target audience.The second target audience that could have been in this bill and that we have proposed is to enable investments to be written down much more quickly than they otherwise would be and something that would normally be 15 to 20 years depreciated down to zero could—even if it's half that even if it's brought to a 10-year or a five-year or a two-year or a one-year or even an immediate deductibility it would incentivise people to invest to invest in hard assets. That makes no difference to the revenue that the Government would collect; it is only a matter of time. That deductibility would happen in any case over a period of time and what we're suggesting is that deductibility happens much more quickly which would incentivise people with cash—because there's plenty of cash around through the quantitative easing and the low interest rates and so on. It would incentivise people to invest in hard assets. Of course if you're investing in whatever it might be—a tractor—well then someone's got to make the tractor build the tractor produce the widgets that go into the tractor and all that multiplier effect can occur if one is incentivised to invest in these things.So I think that is a missed opportunity an opportunity to encourage people to invest. Once you feel like you're investing you're only going to invest where it's deemed or you think you're going to make some money out of it and of course we want people to turn a buck. We want the economy to get kick-started and so that is why that's an excellent proposal because people who are thinking of investing—ASSISTANT SPEAKER (Hon Ruth Dyson): The member's time has expired.Alastair Scott: Oh I was having so much fun!ASSISTANT SPEAKER (Hon Ruth Dyson): You could seek leave for an extension but it may not be granted."