Taxation (Business Tax Measures) Bill — Third Reading 
Taxation (Business Tax Measures) Bill — Third Reading 
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Taxation (Business Tax Measures) Bill 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Business Tax Measures) Bill be now read a third time 
. This bill was introduced under urgency a few weeks ago as part of the $480 million package of tax assistance measures to help small and medium sized businesses weather the current recessionary climate. As such the bill covers a range of provisions that will allow businesses to hold tax moneys for longer and lower the costs of doing business by reducing the amount of form-filling the calculations and the payments they have to make. 
Let me briefly recap the main measures in the bill. The first change is the removal of what is known as the 5 percent standard uplift in the calculation and payment of provisional tax. This is the amount that is added to the previous year’s residual income tax and is based on the assumption that in a normal business cycle a business’s income will increase over the year. Unfortunately we know these are not normal times. To help relieve some of the pressures that small businesses are facing the bill allows the uplift of the provisional tax calculation to be reduced in the current and next income years. The aim behind that is to reduce the amount of provisional tax businesses must pay and free up much needed cash flow. A further change in this bill will allow a greater number of individual taxpayers to reduce their exposure to use-of-money interest. This particular measure was previously part of the omnibus taxation bill I introduced last July but it has been included in this bill to ensure more speedy enactment. Other changes from that previous tax bill have been significantly enhanced in this bill which also introduces some important new measures. 
Overall the aim of these measures is to make lower costs for many businesses by reducing the number of calculations and tax payments they have to make. For example certain GST thresholds are being raised giving more businesses greater freedom from the compliance costs currently associated with accounting for GST. Similarly the PAYE once-a-month filing threshold is being raised to allow more employers to file and pay their PAYE once rather than twice a month. The threshold under which businesses may file fringe benefit returns annually will also rise as will the value of minor fringe benefits that employers can give their employees without attracting fringe benefit tax. Finally a new threshold for business-related legal expenditure is being introduced so that businesses will no longer have to identify which amounts relate to non-deductible capital expenditure and which are deductible revenue expenditure. 
When these measures are all taken together they form a package of assistance that will help smaller businesses to save time and money so that they can spend more time doing their business and dealing with the challenges of the recession. In recognising the importance of smaller businesses to New Zealand’s economic well-being I am heartened by the spirit of cooperation that has been shown in bringing this bill to its third reading. I especially want to thank the Finance and Expenditure Committee for its very constructive and cooperative approach to the consideration of the bill. As the bill stands it provides some very practical assistance to the small-business sector at a time when it needs it most. I also want to record my thanks to the officials who worked on the policy matters contained in the bill and the drafters who worked on the legal detail both of which occurred against very tight time constraints. 
Finally I acknowledge the Committee of the whole House for the very constructive and positive way in which it dealt with the bill a couple of days ago. There were a number of useful contributions in that debate that demonstrated a willingness to see progress being made and recognised that there were positive measures contained in this bill. It is with great pleasure that I now commend this bill to the attention of the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The third reading of the Taxation (Business Tax Measures) Bill provides a welcome opportunity to sum up the various arguments that have been proposed and discussed around the Chamber. The first point that must be made is that this bill is a useful bill. It deserves and will receive the support of the whole House and it does so in recognition of the very real pain that exists in the small and medium sized business sector. Many workers formerly employed in larger businesses have as we know been outsourced and now contract back as small-business owners. That can offer them opportunities which they have taken but it also means that they personally are bearing much of the risk and the pain of this unprecedented recession. 
To that end it is worth recalling that a majority of the measures incorporated into this tax bill have been around for some time. Indeed they were the work of the previous Labour Government either embedded in the broader international tax bill currently under consideration by the Finance and Expenditure Committee in the Inland Revenue Department’s work plan or proposed through the Labour Party’s pre-election manifesto. 
The key issue is that time has moved on. Every week we hear further statistics as we have again today from the Minister of Finance that show that our current account deficit is widening. We also hear from the Minister for Social Development and Employment that unemployment is increasing and that the situation facing New Zealand’s small businesses is getting ever more serious. 
 Once again the question of what the Government has been doing since it took office in November last year must be reflected on and where the additional impetus is that should have been included in this bill. Where is the plan to drive further and faster to reduce the complexities of tax compliance for small businesses which my colleague the outgoing Minister of Commerce Lianne Dalziel was busily working on pre-election? Where is the plan to recognise that in times of recession providing for and estimating provisional tax is probably the No. 1 problem that many small businesses face? 
There are some moves to address those questions in this bill and we welcome them. But they do not go far enough. Let us take as one example the reduction in the use-of-money interest rate for underpayments. It has been reduced from 10.5 percent to 9.7 percent. That is done as a one-off measure rather than as a rolling change but at the same time the official cash rate has been reduced by a full 5 percent. The premium the Inland Revenue Department is taking has actually increased during the time since this policy was first mooted. 
That is why the Labour Opposition has taken it upon itself to propose that the Government consider further change. For a start it should adopt the 90-day bill rate from the Reserve Bank as an ongoing benchmark for the use-of-money debit rate. We further propose that the Minister consider reducing the 105 percent uplift basis for a 2-year previous income to a straight 100 percent. This would acknowledge that it is difficult to accurately forecast income and that if one is using historical income in these circumstances then no penalty should be attached. 
We further argue that the Minister should consider—and I understand that the Minister and his officials have agreed to this measure and we welcome that—the deductibility of patents from their 20-year life to a much shorter period reflecting the fact that New Zealand is an outlier in that regard. Above all we have asked that the Government continue to strengthen its drive to reduce the red tape on tax compliance for small businesses in areas where the results really are de minimis. 
This does bear upon a larger question that is now much on the minds of New Zealanders. Regrettably there is no apparent broad-based plan that gives the public of New Zealand confidence that this Government understands the gravity of the crisis facing New Zealand and indeed the whole world. Examples of this crisis are that Taiwanese exports have been cut by half Japanese exports have been cut by 45 percent and world growth estimates are down from 1.5 percent positive to something like 3 percent negative. This is an absolutely unprecedented cut in 6 months. And why does that matter to New Zealand small businesses? It matters for two reasons. Firstly when we cannot sell our products and services as easily overseas our exporters suffer and many of them are small and medium sized enterprises. Secondly those very same businesses will find it harder and harder to get the credit they need to carry them through this recession because lending from banks has tightened as a result of global economic conditions. 
 So there is a double whammy and this bill is unfortunately a little too late and a little too small to make the kind of difference that small businesses need. What has become apparent in recent weeks particularly is that not only does the Government not have a comprehensive plan for dealing with this situation but that it has described itself as a global outlier. I think the  
Wall Street Journal 
 thought it was doing Mr Key a favour when it praised him for being the only leader in the Western World who is trying to deregulate and cut his way out of this recession. But there is a real problem with that approach which is that this recession has occurred largely because of the problems of deregulation itself. 
An under-regulated American real estate market and a woefully under-regulated American financial system—under the Bush administration—have resulted in a terrific bubble that has now burst and we are all around the world paying the price for that lack of regulatory oversight. Against that background Mr Key thinks it is appropriate to take a deregulatory stance to solve the problem. One wonders why. 
Hon Tau Henare 
: You want more regulation just like America? 
Hon DAVID CUNLIFFE 
: The member should confine himself to areas where he has some expertise—a fairly short list. National in Government is in the unique position in the Western World of taking a conservative approach to recession management. As the debate on the Budget Policy Statement in the last couple of days has made clear the code that is being used by the Government—that it will take the sharpest edges off the recession—simply means that National is not ambitious as a Government about the degree to which it can protect New Zealand workers and small businesses from that pain. 
The second part of the code—that the Government will make New Zealand more lean and competitive for the rebound—simply disguises a classic neo-conservative agenda of deregulation and privatisation which is something that New Zealanders have considered and thrown out in successive Governments from Roger Douglas to Ruth Richardson and to the present day. 
This bill—as good as the measures are and as much as we and all parties will support it at the third reading vote—does not go far enough. It incorporates around two-thirds of its content that had its origins in Labour Party policy and work streams. It has not been significantly extended since the National Government took office and in that time the world has changed. 
In summary I emphasise to the House the contention that this Government clearly must have a different approach in mind. It either has no plan or a plan that New Zealanders have previous tried and once they got the taste of it decisively rejected. 
CRAIG FOSS (National—Tukituki) 
: 
 It is with great pleasure that I stand to speak in the third reading of the Taxation (Business Tax Measures) Bill. If one looks at the record one will find that in every speech I have made on this bill I have registered thanks and I will continue to do so here. I wish to record in  
Hansard 
 my thanks to the Minister of Revenue for helping to push this bill through with speed to fellow members and colleagues on the Finance and Expenditure Committee to the officials who assisted us with getting the bill to this point and to those who sat in the background drafting—thanks very much. I would also like to thank the submitters who participated in the thought process in and around this bill. 
The previous speaker Hon David Cunliffe said that he thought this bill was too late and I think he is quite right. It is 9 years to late. After 4 months this National Government has progressed to the third reading of a bill that should have been put in place in good economic times when there were strong surpluses and the books were looking somewhat rosier than they are at the moment. A natural progression—to make our economy more efficient more productive and more focused on the things that matter—would have been to put these measures in place quite some time ago. On that note I agree with the Labour Party finance spokesman that these measures are much too late but it is not too bad for a National Government after 4-odd months in power having been elected by New Zealand as opposed to the 9 years it took the previous administration to even get a few discussion papers around these matters. 
I also note—and I am quite proud of the fact—that this is the first bill from the new National Government that has been introduced to the House has gone through the select committee process and now arrives here for its third reading. It is notable that this first bill is a tax-reducing bill. It is a compliance-reducing bill and it is a cost-reducing bill. It sits with a suite of measures that the National Party announced prior to the election that it intended to do and it is continuing to do so post-election with the 100-day plan. 
The previous speaker noted that these measures were too late. Then he went on to talk about compliance measures and to say how tough compliance is on small businesses. He is quite right. Compliance is very tough on and awkward for small businesses. But the time spent on compliance and red tape has grown exponentially and compounded in the duration of the previous administration. On the one hand under Labour there were more and more rules and regulations that made it harder to get on with making widgets or whatever the businesses were doing. On the other hand small business policy groups and so on would come out with papers but Labour never actually put things into place. It would talk about them forever but never put them into place. Not one part was put into place. 
As I noted this is part of a suite of solutions. I acknowledge other speakers and the parts of the original taxation bill that have been brought forward. In these trying economic times we have now expanded many of the parameters and changed the various thresholds to the benefit of the taxpayer. 
 But it does go with a suite of solutions. I have noted the 100-day plan. The ongoing personal tax reductions that were put before the electorate were roundly endorsed by the electorate and placed before the House and voted on—and for—prior to Christmas alongside issues such as Resource Management Act reforms and improvement to the commerce legislation that has recently been announced by the Hon Simon Power. 
Many New Zealanders and New Zealand businesses will benefit from these measures. This financial year the quantum of assistance or freeing up of cash flow for those core New Zealand businesses is along the lines of $450 million to $500 million. I would like to touch on some estimates of how many New Zealanders will enjoy the benefits of this bill. It has been estimated that an additional 19000 New Zealand employers will benefit from the changes to the PAYE monthly threshold which makes 98 percent of all employers in New Zealand eligible. It is estimated in regard to the increased fringe benefit tax (FBT) filing thresholds that an additional 4800 employers will benefit. This again means that 98 percent of all employers across New Zealand will be eligible to benefit from the measures in this bill. An additional 47000 GST-registered entities will be able to deregister if they wish to do so because of the changes in the GST registration threshold. That is huge. That change in the compliance rules will free up the time and resources of New Zealand businesses and enable them to focus on what matters and hopefully to grow their productivity to help keep people employed. Also 223000 individuals and 45000 companies will benefit from the reduction in the provisional tax uplift. That is huge and it is of massive benefit to New Zealand particularly as we go through this recessionary trough. As I noted in my own little way that is my favourite part of this bill. An additional 5700 entities will benefit from the increase in the GST payment threshold which means that about 96 percent of all registered entities will now be eligible to choose to use the payment basis. All in all these are very beneficial measures not only to the cash flow itself but also to the time taken to comply with various rules around taxation and Government compliance requirements. 
After only 4 months this National Government with I freely admit the cooperation of parties across the House has voted to bring this bill to this point today. Hopefully after a few more speakers on this third reading it will move from this House. I will not go over the detail of the various parts as other speakers have already done so and others probably will. I again note that I am proud to have helped to get this bill to this point and I am very proud that after only 4 months a National-led Government in cooperation with its coalition partners has been able to get the bill to this point to benefit so many New Zealand businesses. Thank you. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 As my colleague the Hon David Cunliffe has said Labour of course will support this bill because we authored much of it—three-quarters of it in fact. But I do also acknowledge the Hon Peter Dunne who was also the Minister of Revenue then despite the criticism from Mr Foss about delays. I do not believe that either the previous Government or Mr Dunne in his capacity as the then Minister of Revenue did anything to delay this bill. I think we wanted to get it right as we all did so Mr Foss’s uncharitable comments about Mr Dunne and the previous Government can stand as they do for people to scrutinise. 
This is good legislation. I acknowledge it will help a whole host of small businesses that Mr Dunne and others have been passionate about for many many years. I also note though that Labour has urged the Government to go further and undertake additional work as we mentioned in respect of a further reduction in the use-of-money interest the tax deductibility of patent costs and the uplift basis. But I also make the point that although this is good legislation it does not acknowledge as part of the Government’s so-called overall programme the seriousness of the recession that we face. Therese Arseneau summed it up I think when she said on  
Q+A 
: “We need to hear very clearly that National has a plan.” She also said: “This is not just any ordinary recession.” I offer members opposite the opportunity to note that. This is probably the biggest recession or economic crisis globally and for New Zealand that we will see certainly in our lifetime. Ms Arseneau went on to say: “I hear no action plan in terms of what he”—I presume that is the Prime Minister—”is going to do to maximise our competitive advantage.” 
The problem we have here is that this is piecemeal. This is good legislation—Labour has supported it and we will support it—but if one looks at it in the overall fabric or the overall jigsaw that is supposed to be a plan that the Government is charged with implementing to get New Zealand out of minimise and contract the recession and make the landing softer and save as many jobs as possible then we see that this is only a very very small component. When we look at what the plan is we see that the problem is that we have not heard one we do not know whether one exists nor do the New Zealand people. The only thing we have really heard is a couple of absurd examples that were mentioned in speeches as we went through this bill in the second reading debate and the Committee stage where the biggest thing to come out of the Job Summit and the most spectacular answer to the biggest global economic crisis in our history is a cycleway. The Prime Minister told us that the cycleway costings would be around $50 million although we now know from experts that it will be close to if not exceeding $300 million and it will create—the Prime Minister tells us—4000 jobs. It will create 4000 jobs when we are losing 1000 jobs per week! Treasury the Government’s own adviser tells us that in the last 3 months we have lost 30000 jobs. Apparently the major plank to come out of the Job Summit was a cycleway. 
The other point that has been trumpeted in conjunction with this bill as part of the economic plan has been the 9-day working fortnight. The problem there as part of the so-called plan that the Government has is that it is underfunded it targets the wrong areas and critically it lacks the training component. 
Nicky Wagner 
: Everybody supports it. 
Hon CLAYTON COSGROVE 
: The member says everybody supports it. I think it is great that at Fisher and Paykel Appliances for instance 60 jobs have been preserved. I think that is fantastic. But that is 4000 jobs if we throw in the cycleway and 60 jobs if we throw in Fisher and Paykel Appliances and we are losing— 
Hon Darren Hughes 
: And 80 press secretaries. 
Hon CLAYTON COSGROVE 
: There is the National Government’s equivalent of the “jobs machine”. 
 Jim Anderton’s “jobs machine” created 360000-plus jobs. My colleague says 85 jobs will be created through the Steven Joyce spin doctor machine of press secretaries. I suppose 85 new jobs is a good thing—huge salaries. That is a fiscally prudent Government doing its thing as the battlers battle away to save their jobs. But the problem is that if we add 4000 jobs for the cycleway take 60 jobs out of Fisher and Paykel Appliances and lose 1000 jobs a week—and we have lost 30000-plus in the last 3 months—and then the Prime Minister makes a commitment to having 100000 jobs created and preserved then we will fall well short. 
I repeat the comments of Therese Arseneau who said: “We need to hear a very clear plan from National. This is not just an ordinary recession.” I think National either thinks this is an ordinary recession or as I said in a previous speech on this bill it has put politics before really delving in and trying to save and preserve New Zealanders’ jobs. The announcements that National has made are a drop in the ocean when compared to what is happening out there in terms of job losses. I do not have any feeling of celebration about that; I have a feeling of tragedy as 1000 New Zealanders a week lose their jobs. Ms Wagner says that everybody supports the 9-day working fortnight. Well we will see. We will see whether 100000 jobs are created out of it as the Prime Minister said. We will see as we lose 1000 jobs a week whether those 1000 people each week support what Ms Wagner says they will support. We will see as ordinary Kiwis on the 9-day working fortnight effectively lose 10 percent of their wages whether they will support that. 
We will come back to Ms Wagner’s comment at a different time but in the same place and we will ask her whether she stands by her comments to the 1000 people a week who are losing their jobs. I think New Zealanders will look back and say that the National Government did not take this recession seriously when every other economy in the world is hitting it as hard as it can upfront with expenditure and commitments on infrastructure. We are talking about real commitments not re-announcing policies like the scrapping of the State housing bill and then Phil Heatley has announced that 69 State houses will be built. Well whoopee we are losing 1000 jobs a week. Members can imagine if President Obama Kevin Rudd or Prime Minister Brown had risen in the House of Commons in the Australian Parliament or in an address to the Joint Houses of Congress and said that their big hit to solve the recession was to build a cycleway. 
 Members can imagine what the media there would have done. When we throw all these measures in together they are a pebble on the beach compared with the multitude of grains of sand and rubble that is being created through this global economic recession. National’s only other answer of course is to cut programmes that work so it guts KiwiSaver and it guts research and development tax expenditure. 
This bill has been introduced to legitimately assist small business but on the other hand people should not forget that one of the biggest measures to create new and real jobs through research and development tax credits was Labour’s research and development tax credit especially for the manufacturing sector and others which this Government gutted. Members know what that will mean. If one can gain the research and development tax credit in Australia as business people are telling me and it is actually happening now the next step and the next jump is to ask why they do not just relocate and do the whole job in Australia—the jobs; the lot—because they cannot get the tax credit here. If there was ever a time we needed businesses researching and developing new products and new services and therefore creating new and sustainable jobs for the future it is now yet National has cut the tax credit. It throws a few pebbles on the beach and then it cuts substantive programmes. Then it cuts safeguards like KiwiSaver and accident compensation. 
I suspect that what it is proposing to do with the accident compensation scheme will become a defining issue in the next 3 years as people who are down on their luck because they have lost their jobs get injuries and then have the rug pulled out from under them by this crew—as they did in the last election. I remember getting up on the stump and being called a liar by National candidates when I talked about what they would do to superannuation which they have started on already; about what they would do to accident compensation which they have started on already; and about what they would do to the research and development tax credits which they have started on already. I remember candidates on my patch calling me a liar and saying that this would never happen. I just asked them what they did last time and they said they would not do it again. Well they have started on this. 
I say to members opposite that this is the biggest global recession we have had in our lifetime. The people demand a plan. Those members were elected to deliver a plan; they have no plan. They go around New Zealand asking people what the plan should be and then they do not listen to them. I commend this bill but I say that it is time for the Government to get serious and truly help people. 
JOHN BOSCAWEN (ACT) 
: 
 It has been interesting to listen in this debate to the to-ing and fro-ing between the National Party and the Labour Party. The Labour Party members say that a lot of the work on the Taxation (Business Tax Measures) Bill was their own work—and good on them. Clearly they believe that and it is the case. I sat in the Finance and Expenditure Committee and I heard that argument being raised constantly. We have just heard from the Labour Party that the National Government is not doing enough. National’s point of view is that this is the first bill that it has introduced and taken through the select committee process that it provides for a reduction in tax rates and a reduction in red tape and that those are good things to achieve. I do not want to take a particularly partisan approach—I do not want to make it a them-and-us situation—because I would like to try to put a positive spin on my part of the debate. What I am trying to achieve requires the support of both of the major parties in this Parliament. It requires that support. The reality is that I could look to the support of just one of those parties but I am trying to get the support of both of them. 
As I said this bill is designed to reduce rates on use-of-money interest to take away the red tape and to make it easier for small to medium sized businesses to comply with the law and meet their obligations. As members have heard this legislation is one of the consequences of the recession. The Government is looking to make this change to the law as a consequence of the recession. We are all very aware of the reasons that have led up to the recession but many things relate to and contribute to it. I have said before that I believe that one of the issues that are resulting in the poor forecast for growth in retail sales in our country is the massive loss that has been incurred through finance companies in the last 2 to 3 years. It is massive. What is worse is that it particularly affects the retired and the elderly—the people who have lost some or all of their savings in finance company collapses. Without a doubt that is one of the things that have contributed to the recession contributed to the state this country finds itself in right now and contributed to the need for this bill. 
I talked about bipartisan support. I stood to speak on the second reading of this bill just 2 weeks ago. At that time I made a call for an inquiry at the Commerce Committee on the failure of finance companies and the reasons leading up to the failure of those companies. I was able to say to the House that earlier that day I had received tentative support from the Hon Lianne Dalziel the previous Minister of Commerce and now the chair of the Commerce Committee. She said that subject to agreeing the terms of reference it was something that she could recommend that the Labour members on that committee support. I was very very pleased to hear last night from Simon Power that earlier in the day he had issued his own press release and made his own announcement that he as Minister of Commerce would also welcome an inquiry into the collapse of finance companies and the reasons that led to that. I should stress that it is not Mr Simon Power’s decision as to whether the Commerce Committee has an inquiry but nevertheless from my point of view it is still very welcome that he is prepared to say that if the Commerce Committee members decide to vote for an inquiry he would support it. 
I would be very keen to have the support of both the Labour and National members on that committee because if we have a unanimous vote we will be looking at the issues that have contributed in part to this recession but more important have affected significantly—in some cases very very significantly—the lives of some of our elderly citizens. I say that because in the intervening 2 weeks the Commerce Committee has released publicly a report that it received from Mr Harris the Registrar of Companies as an attachment to its report on the annual review of the Ministry of Economic Development. Mr Harris’ report is a 4-page report that looks at the supervisory framework that currently applies in respect of our finance companies and it makes damning reading. As I stand here and think about it I may decide to send a copy of that report to every one of the other 121 MPs in this House because I think that everyone should read it. I see Mr Hughes nodding and I thank him for that support because the report is damning reading. I am very grateful for the support I believe I had from Lianne Dalziel a fortnight ago when she said that the Labour members would consider supporting an inquiry. 
 I will touch on some of the issues that Mr Harris raised in his report. He talked about the level of corporate governance and said the quality of corporate governance is a key factor to be considered in our attempt to understand the reasons for the failure of finance companies. He detailed a number of issues one of which was the calibre of the directors and how the directors of some of those companies operated. He said for example that too often directors were not adequately informed. They were misled or failed to take sufficient interest in the affairs of the company. Members should think about that. Directors were misled ill-informed and failed to take sufficient interest in the affairs of the company to the extent that directors have contributed to the failure of finance companies through their actions. There are many thousands upon thousands of elderly people who have lost their money in those collapses over the last 2 years. The report is a damning indictment. 
Mr Harris then went on to mention some directors who have previously been involved in collapses over the last 20 years. He looked also at the treatment of non-performing loans. A non-performing loan is a loan where a company has lent some money to a client and that client has not been able to pay that money back. Normally there is a disclosure requirement so that the finance company has to disclose to its potential investors that it has some outstanding loans and have not been paid back. Mr Harris referred to the practice where a finance company rather than disclose the fact that a loan was outstanding and was delinquent issued a new loan. They would issue the borrower a new loan to repay the old loan so they could say “Well whoop-de-do! There is no outstanding loan. This new loan is current and we do not have to disclose that.” The way that some of the finance companies treated non-performing loans gave the impression that the finance company in particular—the company that was soliciting funds from the public—was more solvent and stronger than it really was. 
Mr Harris also talked about the lending practices of finance companies. He talked about the fact that in a lot of cases a lot of money was lent on individual projects. I am personally aware of half a dozen projects where in excess of $50 million was lent against in some cases just bare land—albeit bare land that was proposed for subdivision. He talked about the lending practices of concentrating a lot of money into a very few small projects in the case of some finance companies and in some cases of money being lent to projects that the directors of those finance companies were involved in themselves. The directors were borrowing money from companies that they were directing and Mr Harris said that in some cases those projects would not otherwise have got funding. 
Mr Harris also went on to look at the trustee supervisory model and pointed out a number of defects in terms of the way finance companies are currently supervised and in the management for looking after the supervisory model. I note also in Mr Simon Power’s press release yesterday that he says that is something he wants the Securities Commission to give urgent attention to and to review. I congratulate Mr Power again on that. 
Mr Harris then looked at the question of the auditors and quoted a particular auditor who has appeared before the New Zealand Institute of Chartered Accountants and been ordered to pay $130000. He was presumably found guilty and ordered to pay $130000 for the cost of the hearing. When I read that I asked myself what other action has been taken. Does the receiver have the money to bring a civil action against that auditor? Clearly that auditor is being fined $130000 for the cost of the hearing by the New Zealand Institute of Chartered Accountants. Is there the ability to recover some further funds from the auditor or the auditor’s professional indemnity insurance company? I have no idea what the particular finance firm that the auditor was auditing actually lost. 
There are a number of issues here. This is not a simple issue; it is an extremely complex issue. I stress again that a number of finance companies fail simply because of market forces. Directors may have lent money against projects they thought would be successful and a good business proposition and through no fault of the people borrowing the money or of the directors of the finance companies we have had a change in the market and gone into recession and those loans cannot be paid back. 
I am very grateful for the support of both Mr Power and Lianne Dalziel and of the members of the Labour Party. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Speaker. Kia ora tatou i te Whare. 
Hon Tau Henare 
: Tena koe. 
HONE HARAWIRA 
: Tena koe Mr Henare. 
Hon Darren Hughes 
: No one talks to him. 
HONE HARAWIRA 
: Hardly anybody from Labour! Back in January the Minister of Maori Affairs put together some of Maoridom’s movers and shakers to figure out how Maori can avoid the worst impacts of the recession including action from within the Maori community as well as support from Government on how to strengthen the Maori economy. From that we gained some very clear lines. One was the possibility of public-private partnerships between iwi and the Crown including the ring-fencing of Government moneys for such projects. Tainui chairman Tukoroirangi Morgan summed up clearly the thinking within iwi when he said: “We are poised and ready to go. We just need the gateway of opportunity to be opened by the Crown.” Erima Henare added that Maori do not want to be just bit players and bulldozer drivers; they also want to have a viable partnership with the Crown and with private enterprise in their development. Mr Henare also suggested that if Nga Puhi Tainui Ngai Tahu and Te Arawa came up with $100 million they might consider tendering for the $360 million motorway extension north of Auckland although no doubt if the people of Tai Tokerau found out there was a spare $100 million floating around I would hazard a guess that they would prefer to see that the money was spent on housing rather than on roads. But members will get the drift: Maori are ready and willing to move on many levels. 
Other areas the Maori economic summit conference gave serious consideration to were how best to support small and medium Maori businesses during the recession and how to provide long-term assistance for businesses including ways to help them take advantage of opportunities presented by future economic trends. This Taxation (Business Tax Measures) Bill goes some way to helping small business enterprises by introducing support mechanisms like business helplines business heath checks business seminars mentoring services quicker responses and payment schedules from Crown agencies tax relief changes to tax laws to reduce business compliance costs simplification of tax regulations raising of tax thresholds and reduction of tax liabilities. 
 These are all themes that will have been very well received by many of those who attended the Maori economic summit. 
To coordinate the Minister’s efforts a Maori economic task force—including business leaders like Mark Solomon Ngahiwi Tomoana Bentham Ohia Daphne Luke John Tamihere June McCabe and Rob McLeod—has been charged with considering the impact of the recession on Maori and with how best to use the wealth of talent around us to promote positive Maori development built upon strong tribal asset-based growth in the primary sector successful small to medium-sized businesses and positive social and community development investment and enterprise. The Maori Party will therefore be supporting this bill. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to support the third reading of the Taxation (Business Tax Measures) Bill. I start by congratulating the Minister of Revenue Peter Dunne the chair of the Finance and Expenditure Committee Craig Foss—my colleague from the Hawke’s Bay—and acknowledging the rest of the select committee who took part in the process. I also acknowledge the officials for the work that has gone on in bringing this bill to fruition in such short order. I thank them all very much. 
The National Government has a plan to blunt the edges of this recession and to enable New Zealand New Zealand businesses and hard-working Kiwis to prosper once we have come out of the bottom of the current recession. This small-business bill which is being implemented today in the House and which is effective from 1 April 2009—just 6 short days away—is a key part of that plan. It will deliver $450 million of additional stimulus and compliance-saving measures to the small-business sector. Let us not forget how important that sector is to the New Zealand economy. Small businesses make up 97 percent of all businesses that employ 19 or fewer people. That sector employs 31 percent of our workforce and importantly the sector contributes 38 percent of New Zealand’s output. Make no mistake: those people are a big contributor to our economy yet so often they are overlooked. But not today! 
I want the House to understand that the people behind small businesses in my opinion are the real drivers of this economy. It is not the Government not the big corporates; small businesses risk everything to provide jobs create products provide services and to grow their businesses. The health of the small-business sector plays a significant role in the health of the corporate sector. The entrepreneurs who start small—the Sam Morgans the Bill Days the Rob Darrochs the Rod Drurys the Jan Camerons and the Sally Synnotts of this world—are the entrepreneurs who risk everything and ultimately provide the renewal of our corporate sector. The big corporates play a part too but the difference is that the chief executive officers of those businesses risk only their reputation when things go wrong. They do not risk the shirt off their own back or the house where they live. 
That is why I become so angry when I hear Opposition members talk about the owners of small businesses with such disdain. They cry that those people are out to rip off employees to fire them at will in 89 days— 
Hon David Cunliffe 
: What disdain? 
CHRIS TREMAIN 
: That is right and particularly Mr Cosgrove. Every time he gets the chance he gets on his high horse about small businesses firing employees after 89 days. The fact of the matter is so different. Small-business owners enter employment relationships wanting the relationships to work not to fail. They want the relationships to be successful because those employees will help grow the business take on responsibilities and perhaps even invest in them down the track. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Last time I looked we were supposed to be discussing the Taxation (Business Tax Measures) Bill not the 90-day “hire and fire at will” bill. It would be helpful if the member were to contain himself to the bill in question; most particularly because he is also misrepresenting the views of the Labour Party which supports small business. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: That is enough. We can become overly pedantic about these things. The member is making reference to that issue. If it continues for a long time then yes I think the point is made but a passing reference is neither here nor there. Let the debate flow. It is a third reading so generalisations are pretty acceptable. I invite the member to continue. 
CHRIS TREMAIN 
: Thank you Mr Assistant Speaker. The fact of the matter is that many small-business owners become pseudo-mothers and pseudo-fathers to their employees—the psychologist the banker the adviser the social worker—because they want those employment relationships to work. They do that often at huge personal cost. I want the House to know how important the small-business sector is and I take this opportunity to thank them. They are the engine room of our economy they are the champions and they will be the ones who get us through this recession and out the other side. 
The Taxation (Business Tax Measures) Bill is part of the National Government’s plan to support small businesses through this recession. The bill aims to improve the business environment by easing the pressure of taxes on the cash flow of businesses and reduce business tax compliance costs. To achieve that aim a number of measures are proposed in the bill. For example various thresholds for PAYE fringe benefit tax and GST will be raised; the provisional tax uplift rate will be reduced; and the rules for deducting legal expenditure will be simplified. Those are all excellent measures. It is acknowledged that a number of the initiatives in the bill reflect proposed changes in previous legislation or in Inland Revenue Department work streams and discussion documents including the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. 
However it is important to note the well-known saying that between the idea and the action lies the shadow. Although the Opposition had a plethora of ideas and action plans for making life easier for hard-working Kiwis the shadow between those ideas and the action of implementing them became progressively longer as it faded into the sunset of the previous Labour Government’s recent demise. The top idea that came from its much-vaunted Small Business Advisory Group was the 90-day probationary period. Did the previous Government take one step towards implementing that idea? Not one! 
This Government unlike the previous Labour Government— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I do not wish to detain the House. You have ruled that a passing reference to another matter is within the scope of this debate. The reference is being repeated and drawn out as a central theme of the member’s debate and I submit to you that that it is within your previous ruling to now take steps to draw the member back to the bill in question. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The bill is as much about small business as it is about taxation. I give the member some more latitude. 
CHRIS TREMAIN 
: Thank you Mr Speaker. Unlike the previous Labour Government the shadow between the ideas and the actions of this Government is nil. Within 4 months we have delivered action to the floor of the House with a $450 million initiative. This package is about playing our part to help small businesses to get this economy going. The measures in this bill are part of a whole series of initiatives a wider plan designed to get this economy going. These include personal tax cuts coming into effect on 1 April. 
Hon David Cunliffe 
: Why doesn’t the Minister announce it? Where is the plan? 
CHRIS TREMAIN 
: It is part of one of the largest fiscal stimulus packages in the Western World I say to Mr Cunliffe. In fact it is in the top five which Mr Cunliffe has heard on a number of occasions. For him to stand and say that there is no strong stimulus package is absolute rubbish. The initiatives also include infrastructure spending on housing schools and roads which we have brought forward; the commitment to invest in rail; the introduction of amendments to the Resource Management Act to reduce compliance costs and speed up the processes of development; introducing the ReStart package to assist those who lose their jobs through redundancy; and the introduction of the 9-day fortnight to help workers retain jobs. These are all part of the wider plan. As I have previously mentioned the specific measures in this bill include the 5 percent uplift rate on provisional tax; the raising of GST thresholds from $1.3 million to $2 million; the lifting of the GST registration threshold; the increase of legal expenditure to $10000; and changes to PAYE fringe benefit tax (FBT) and some other minor FBT adjustments. Those are a significant series of initiatives that will help small businesses. 
This relief package is just one part of the Government’s jobs and growth plan. It is about keeping the economy running as strongly as possible easing the sharpest impacts of the recession and preparing our economy for future growth. Further parts of this plan will be announced and rolled out over the coming months. National is committed to making it easier for small and medium sized companies to do business. We all face the reality of a slowing global and local economy and it is certainly putting extra pressure on families throughout our country. We understand the importance of small business in helping to get us out of this economic mire that we are currently in. We respect small businesses we thank them for the work they are doing and we know that this bill in the House today—which will be implemented in 6 short days—will help take this country out of recession. 
STUART NASH (Labour) 
: 
 I rise to speak in support of the Taxation (Business Tax Measures) Bill— 
Hon Members 
: Hear hear! 
STUART NASH 
: —I thank members very much—because it is important legislation that fights against the economic evil of the global recession and the resulting environment of economic uncertainty. 
I quote from  
The Economist 
 magazine of 24 March 2009 to show the extent of this recession on a country like New Zealand which is highly dependent on international trade not only for our economic health and well-being but also for our growth and prosperity. I do not think anyone will doubt that: “World trade the engine of growth is sinking at a pace not seen since the second world war. In projections released on Monday March 23rd the WTO predicts that the volume of global trade which grew by 6% in 2007 and 2% last year will fall by a dramatic 9% this year.” I repeat that the volume of global trade will fall by 9% this year. “The drop will be worst for rich countries whose exports will contract by 10% but even emerging and developing ones whose exports grew by an average of 15% each year between 2000 and 2008 will see export volumes shrink by 2-3% this year. Before the release of these latest predictions economists had already expected global trade to fall by more than it did in 1982 the last time that it contracted albeit slightly. Now matters look much worse than they did just a few months ago.” 
The Economist 
 goes on to say: “The contrast with the recent past could not be sharper. In the boom years between 1998 and 2008”—which coincide with the boom years in the last Labour Government—”trade volumes grew at 5.7% per year” thanks to Dr Cullen and Prime Minister Clark. They are “easily outstripping the growth rate of world output which was around 3% over the same period. Now the world is seeing falls in exports that are dizzying and close to universal and which exceed declines in output.” This is a real concern. “Among the 45 countries for which the World Bank has January trade data the average fall in exports from a year ago was a staggering 32% and 37 countries saw exports decline by more than a quarter. The drops cut a wide swathe across the world with exports plummeting in rich and poor countries alike. Exports from Argentina”—for example—”… were 36% lower than a year before. The corresponding drop for Canada was 35%. Chile’s exports fell by 41% Japan’s fell by 35%. 
The immediate reasons are clear enough. The worst recession in living memory means a dramatic collapse in demand for goods everywhere. An estimated shortfall of $100 billion”—that is $100 billion—”in trade finance which is behind roughly 90% of world trade is also making matters worse. Yet the synchronisation and speed with which exports from countries across the world have plummeted is striking.” 
This a bit of background for this bill and it is very important: “More troubling protectionism is rising and risks making an already severe slump even more catastrophic. When leaders of the G20 countries meet in London on April 2nd they are likely to reiterate a pledge made in November to avoid the mistakes of the 1930s. They are expected to promise to restrain themselves from raising the trade barriers that have been whittled away over decades of tortuous multilateral negotiations.” in which former Labour Prime Minister Mike Moore played an integral part. “But almost none have kept the promise they made at that last meeting. The World Bank has counted 47 trade-restricting steps taken by 17 of the G20 members. Tariffs have risen in several developing countries including India”—and we are in the developing stage of a free-trade agreement with India—”Russia and Ecuador. European ones and America have resorted increasingly to subsidies for failing industries with implicit pressure on firms to create jobs ‘at home’ possibly at the cost of shutting down more efficient facilities abroad.” 
 Why is this bad for New Zealand? I will tell members why. We managed to trade our way out of the last major recession this country faced in the 1990s. The reason was that our export volumes into markets were not affected to a huge extent because our major markets did not suffer or contract in the way they are doing at the moment. If we remember back to the early 1990s we recall that unemployment for Maori and Pasifika people reached close to 26 percent during those times. Of course that was not helped by the Draconian and socially destructive policies of the then National Government. 
Our ability now to trade our way out of this hole is hugely diminished because our trading partners’ economies have also collapsed. As mentioned Japan’s exports have fallen by 35 percent from what they were a year ago. I remember when the cries from members opposite were for New Zealand to emulate Ireland and its so-called economic miracle and to slash taxes. Luckily Dr Cullen resisted. Where is Ireland now? It is looking for a miracle because nothing else will save it. And where is New Zealand? It has one of the soundest balance sheets of any country in the OECD thanks to the man who resisted the call to cut taxes during the boom times. He at least knew that stimulating an economy that is already over-stimulated is no way to fiscally manage a country. 
That brings me to my next point: economic philosophy. What is going on at the moment with the National Government? My favourite quote is: “The first thing we learn from history is that we do not learn from history.” and how apt that quote is! During the last mini-recession this country went through at the end of last century Mr English was the Minister of Finance and it took the restoration of a Labour Government to repair the enormous damage done by the Bolger-Shipley Government. This time the Clark-Cullen Government has left this National Government with full employment and money in the bank. But who is the Minister of Finance? It is Mr English again. It is like a bad dream—déjà vu. Heaven help us! Mr English is still following the economic philosophies of the 1980s. 
The Reagan doctrines of trickle-down or supply-side economics—or whatever one wants to call it—have been discredited and proven to be wrong. The theory asserts that we give tax cuts to the rich under the assumption that the wealthy will spend extra money and therefore will create demand for jobs and services. This theory has been disproved because in times of recession the wealthy tend to pay down debt. Therefore they do not create any wealth in the economy at all. I know that Mr Bennett agrees with this; he must have done fifth form economics. 
Hon Member 
: Um? 
STUART NASH 
: Well maybe not. Sorry; I do not want to make assumptions. 
Keynesian economic theory which is the predominant economic philosophy of the social democrat centre-left parties asserts that we should give tax cuts to those who really need the money in order to meet the basic necessities of life. The tax cuts allow them to buy food clothes books and shelter—all those necessities that the wealthy who are getting the tax cuts take for granted. Mr Obama has filled his Cabinet with Keynesians yet the Key-English team are still tied to trickle-down economics. What a shame for all New Zealanders that is! 
Mr Robert Reich is a former Secretary of Labor under President Clinton. He wrote a book that Mr Peachey is actually reading at the moment; he is going around the place telling everybody what a wonderful book it is. Mr Reich commented on Obama’s Budget. He stated: “It is the boldest budget we have seen since the Reagan administration and drives a nail in the coffin of Reaganomics. We can basically say goodbye to the philosophy espoused by Ronald Reagan and Margaret Thatcher.” Reich also stated that Obama’s Budget is “the biggest redistribution of income from the wealthy to the middle class and the poor this nation has seen in 40 years”. If only we could stand up here and say the same thing at the moment. But hold on a second—has not Mr Key compared himself with Mr Obama? In fact sometimes I look across the House and I could swear that I am seeing the new President but then I realise that it is just Mr Key. 
Hon Darren Hughes 
: Who’s your choice for Dick Cheney over there? 
STUART NASH 
: Well it is hard to know is it not? 
Hon Darren Hughes 
: There are two Dick Cheneys over there. 
STUART NASH 
: No they are just a pale imitation but unfortunately not in the area of economic philosophy. At a time when the situation has demanded great leadership and leaders New Zealand has missed out. 
I support this bill. It takes fundamentally a bipartisan approach because it of course is a Labour bill—it is in essence a Labour bill. But I must give credit to Mr Foss whose chairmanship of the Finance and Expenditure Committee has been responsible for the review of this bill and for allowing all parties to come up with the substance of the bill which we agree is the first step towards helping out those for whom this recession is real and is beginning to bite. 
DAVID BENNETT (National—Hamilton East) 
: 
 According to the previous speaker Stuart Nash this Taxation (Business Tax Measures) Bill is a Labour bill. Any bill that has taxation in it must be a Labour bill is that not right? That is what the small-business community has learnt about Labour over the past 9 years—Labour was not there to help them but was there only to take money from them and spend it on Labour’s promises. That is what Labour did. 
We have had a new member come to this House and in such a bright-eyed fashion—I do not know whether he really fits into that party at the moment; he is saying the wrong things about what the Labour Party talks about—he has given us a history lesson. It was a history lesson that Michael Cullen would have been proud to give I am sure. Dr Cullen is one of the great historians in this House but he was not a great Minister of Finance. In this case we have a new history teacher coming along to show us the history of finance—it is “Nashonomics”. Mr Nash told us about the way the world operates and about the great things Labour could do for small business. But I think it is important that we look at the words “could do” because Labour had 9 years in office and I ask what it did for small business. 
If we want to talk about history I say that Labour has a history of hurting and of not helping small business. But it is now saying in this House after it has lost an election that it would have done all of these things anyway. It is saying that the Labour members had these plans they had these agendas but they just had not got around to it. Is that the problem? Did those members not get around to it? Or is it as Mr Nash said: they had the money in the bank? They just put the money in the bank for a rainy day. 
 It is very hard to find that money in the bank now is it not? I do not know what bank he is talking about. Maybe it is the “Labour Bank”. But there is no money in the bank because that previous Government gave us a decade of deficits. That is what it left New Zealand with—a decade of deficits. 
Labour left us with some of the worst balance of payments figures in the OECD and with year on year of deficit after deficit projected for this economy. That is what that Labour Government left small business. That is what it actually did for small business. It did not pass any business tax measures bills as the National Government is doing. Bills like one that we are debating are not rocket science. They are basically about threshold changes the use of money interest and other initiatives but they are not rocket science. It does not take a Government 9 years to work out how to do these things. It took National only a couple of months. In fact but for Christmas the country would have got these bills before then under our Government. 
The Labour Government had talked long and hard about what it wanted to do for small businesses but it could not actually deliver for them. It could not go out there and deliver for small business. There is a reason behind that which is that Labour will not support people who go out and make the most of their opportunities. National is quite different. National wants to send the right signals and incentives for people to go out there. We want to create an environment that will grow this economy. We want to create an environment that keeps people in jobs. National is worried about keeping people in jobs; we are not thinking about what could have been what we could have done or merely what is possible. We are looking at the realities of action and delivery—[ 
Interruption 
]—and that is the difference between the two political parties if Mr Nash wants to know what the difference is. National is the party of action of delivery of ideas and of vision; Labour is the party of looking across the fence and saying: “We wish we could do that.” The whole political mantra of Labour members is based on jealousy. They look across and say: “These people have got too much. They have done too well. Let’s take it off them.” It is the same in their policy. Labour members do not actually have any policy; they look at our policy and want to take it off us. That is what Labour is about. It does not have initiative it does not have direction and it does not have delivery. Labour is all about what somebody else has done and about what it can do to make it look as if that were Labour’s idea. That is Labour. 
Then we look at this bill. It is about delivery for New Zealanders so that we can help keep people in jobs. This bill is part of that stimulus package to help New Zealand get through this terrible terrible time. We need a recessionary package that is practical simple effective and that we can action quite quickly. These are actions that we can do now. Measures like the GST registration threshold will make a huge difference. The increase from $40000 to $60000 is a big thing for small businesses especially when small businesses are struggling now to get a lot of sales. That $60000 is worth more than it would have been worth a year ago essentially in real terms because to get $60000 in sales now is a lot harder than it was a year ago. These measures that we have put forward are actually more than what the market demands in a sense. We are going out there to deliver the best possible circumstances for New Zealanders in order to keep our small-business community strong and viable and to provide those crucial jobs for our communities throughout this country. 
I think we need to take great pride in a Government that makes those decisions and makes those actions a reality. We can take great pride in a Government that is not afraid to do things. We do not wait for elections to do something. We do not wait for policy groups to tell us what we need to do; we go out there and do what is the best thing for our country at the right time. That is the big difference between the two main political parties. Our motivation comes from what is best for New Zealand and best for our people. National is not motivated by what is best for our political party which is what motivates Labour. Labour members have not talked about this bill. If anything those members have tried to say that these ideas were their own and that this was their bill and they were going to do these things anyway—that does not count in the real world. 
People want to see action and they want to see delivery and they are able to see those things now under the National Government. They will get more because this will not be the end of it. No we will work hard to look at what the next level of reforms could be and to deliver more for our small-business community and for those people who rely on that community for their jobs. We will deliver more for those who rely on that community of business people to keep this country ticking over. That is how a strong country is built. We have to look at what is going on out there and time and time again try to deliver what will refine it and make it better. National is not afraid to do that. We are not afraid to go out and deliver the best possible environment in which small business can progress. That is something that defines us and makes us different from Labour—an Opposition that is jealous and that looks across from the other side of the House to try to steal ideas. Over its 9 years in Government Labour never had the guts to go out there and do what it could have done to set up New Zealand for a better situation. But the National Government will deliver that vision. We will deliver those concrete changes. We are doing it now and there is more to come. We commend this bill to this House. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 The previous speaker made much of a focus on the deficit; he is the one with the deficit. He may have done fifth-form maths but he cannot recall much of it. He should remember—because he was a member of this House at the time—that National voted against the previous Labour Government’s move to cut business tax rates to 30 percent. Does he remember that? Does he remember that National was in favour of cutting the research and development tax incentives that the past Government had put in place and has in fact cut them? Does he remember that this National Government has made cuts to KiwiSaver and that it is axing three-quarters of a billion dollars of tax cuts that would have favoured those most in need of that sort of assistance during this very difficult economic time? 
 [ 
Interruption 
] That is right. Give it to the rich. Let them pay it back to the poor by way of a charity if they are lucky. That is the philosophy of members opposite. 
We are on the third reading of the Taxation (Business Tax Measures) Bill and I note that the chair of the Finance and Expenditure Committee Craig Foss did a good job of taking the bill through the select committee. But he also said before that this is the first piece of legislation that has been passed through all its stages in this Parliament without urgency and by going through the select committee process. Although it is an important bill it is nevertheless a very small bill and a very small part of what needs to happen in this nation in order to meet the demands of the international situation. Speakers opposite have been making much of the fact that this bill is part of the Government’s rolling maul of measures to deal with this one-in-100-year turn round in economic circumstances. Although this bill is an important step forward to assist New Zealand businesses it still remains a relatively small step. 
Rather than this bill being something that this Government can trumpet as having done in response to the world’s worst economic outlook in living memory I say this bill was originated by the previous Government. The Minister yesterday suggested that a lot of new measures are now included in the bill that the Government inherited. That is true but the Inland Revenue Department provided the Finance and Expenditure Committee with a 1-page summary of the bill’s new measures the enhancements of measures inherited from Labour and the inherited measures that remain unchanged in the bill. There are four new measures three enhanced measures and five original measures remain unchanged. So there are four new measures within the bill and eight enhanced or existing measures inherited from the previous Labour Government. The House can see the substantial contribution that Labour made to this bill from the previous Government’s measures. 
The new administration can barely claim the credit for this legislation being part of the rolling maul as some members opposite continue to suggest. It is barely another pair of boots added to a rolling maul. But whatever the bill does provide it is not and cannot be described as a deliberate focused planned and prioritised response to the global meltdown. Not only has Labour provided the basis of the bill but we also saw some amendments in the name of the Hon David Cunliffe to further improve this Labour-initiated bill. 
Let us go through the bill as it was inherited by National and the enhanced or new measures it now includes. The new measures include a reduction in the provisional tax uplift rate from 105 and 110 percent to 100 and 105 percent to apply from 1 April this year. The increase in the GST payments basis threshold from $1.3 million to $2 million is also to apply from 1 April. The introduction of a new threshold of $10000 below which all business-related legal expenditure is fully deductible is also to apply in the next income year. There is an increase in the thresholds under which the fringe benefit tax is not required to be accounted for regarding minor benefits provided to employees. Those are the new measures within this legislation. 
The existing measures with some enhancement include the increased pay-as-you-earn once a month filing and payment threshold. That has gone up considerably as from 1 April of this year. There is an increase in the fringe benefit annual filing threshold from $100000 to $500000 and that also applies from next month. There is an increase in the GST registration threshold. 
The existing measures that were kept in toto from the Labour Government’s legislation include the increase in the low-value trading stock threshold an existing measure relating to accounting financial arrangements the extension to the fringe benefit tax annual filing the increase in the provisional tax use of money the use-of-money interest safe harbour threshold and the increase in the GST 6-monthly filing threshold. 
Labour of course is also urging that we make some further changes to the bill around further reductions in the use-of-money interest rates and in the tax deductibility of patent costs—a good submission in that respect came from the Manufacturers and Exporters Association—and around reducing the uplift basis for provisional tax. Even if those measures were included this bill would still effectively represent business as usual. It is a good bill but it does present a missed opportunity in the face of the global meltdown. The economic conditions have deteriorated rapidly. Most commentators are predicting considerable drops in GDP and we have to ask why the Prime Minister remains the only person who has a sunny day forecast in the face of what really needs a considerable response and plan. The plan that we have seen so far includes the cycleway to nowhere. It started with a costing of $50 million and now looks more likely to cost $300 million if it proceeds. The 9-day fortnight which is now going to assist employers is welcome assistance but 60 jobs at Fisher and Paykel Appliances are a long way short of the 100000 jobs that were suggested. 
The Government has some other byplays going on. On the new  
Q+A 
 programme on Television New Zealand on Sunday Therese Arseneau a fine political scientist from Christchurch said that very clearly there was not much of a plan—that this is not an ordinary recession and there is no action plan to maximise our competitive advantage. Of course the  
Q+A 
 programme itself may not survive much longer now that the Government is axing the Television New Zealand charter. The National Government of course has also scrapped the research and development tax credit gutted KiwiSaver and discarded the Fast Forward fund and in the meantime we are getting this modest tax-amending bill. 
We as a party urge the Government to give some serious reconsideration in the face of the economic crisis that we are facing—and those words are not too strong—to retargeting the tax cuts. They simply are not the best way to stimulate our faltering economy. We must make the very best of tax cuts that are focused on those truly in need. People at the bottom end of the spectrum are the ones who spend every dollar they get. People who have discretionary income have a choice: they may save they may spend off debt they may take a holiday and they may purchase goods. Those at the bottom end of the spectrum have no such choice. It was shameful to see that the tax cuts provided under the Labour Government’s programme where three-quarters of a billion dollars were to have gone to the New Zealanders who are most in need have been forgone in the interests of providing tax cuts which the Prime Minister now suggests may be given back in charity payments to the poor of this country. This is going back to Dickensian times in the thinking of the Prime Minister. 
National in its approach to the economic recession is uniquely seen on the international environment as tinkering with our economy while the rest of the world does some real things. 
 The International Monetary Fund is in town at the moment and it is telling the Government not to take a knife to spending at this time. It is counter-cyclical to what the Government needs to achieve. Any New Zealander who looks across the Tasman to Australia can see that there is a NZ$67 billion stimulus package in Australia. So where is the National Government’s package for New Zealand? We have this bill progressing through Parliament. 
This is a small important and modest piece of legislation and it is welcome. It will provide a small measure of relief to small to medium sized enterprises which provide 90 percent of the jobs in our nation. Labour supports the passage of this bill but we do so while suggesting the bill needs some amendments and we have indicated those amendments to the House. We would like to see reductions in the use-of-money interest rate. We would like to see further work done around the issue of patent costs. We would like to see reductions in the uplift basis. If this bill had the Labour amendments added it would be more useful. But it remains a modest bill. It is no answer to the scale of the recession that this nation and this world face. 
AMY ADAMS (National—Selwyn) 
: 
 I am rising to take what I believe is the final call in the third reading of the Taxation (Business Tax Measures) Bill. As a relatively new member of the House I imagine that speaking last on the third reading of a bill particularly one that has passed through the House in reasonably quick time as this one has might not be an enviable task on the grounds that a lot of what one could say about the bill has been said. A lot of it has been said by me I must admit in previous speeches. But far from being put off I am in fact delighted and proud to be speaking on this bill. 
I am delighted to see that we will pass this bill through its third reading today because this bill despite the bleating from the other side of the House will look after the engine room of our economy. When we talk about business we need to remember that far and away the vast majority of business in this country is not carried out by the big top-end-of-town companies. It is carried out by the mum selling clothes from home over the Internet and by the guys working in the garage fixing cars. It is carried out by the businesses struggling to stay alive and keep going employing few staff putting everything they have into the business and working 60 70 or 80 hours a week. Those are the businesses we need to be supporting. Those are the businesses that will get us through the recession and those are the sorts of businesses that this bill targets. 
This bill cuts right to where the National Government needs to be focusing when we talk about looking after our economy. The National Government is looking at the whole of the economy. This bill though goes straight to those small enterprises. As I have said before as the representative from Selwyn where most of our businesses are in that category I am absolutely delighted to play a part in getting this bill through the House. 
I do want to acknowledge and I think it is fair to do so the whakapapa of the bill and its genesis under the previous Government—well certainly many parts of the bill had their genesis under the previous Government. I do think it is fair to acknowledge that and I know the point has been made before. 
Hon Ruth Dyson 
: Well done! 
AMY ADAMS 
: It is fair; the bill did have its origins under the previous Government. But—and there is a but as is often the case—we need to emphasise that this bill as drafted introduced and delivered by the National-led Government goes a lot further. It goes a lot further than the provisions that were taken out of the Labour bill. Mr Burns can keep his scorecard if he thinks that is appropriate. If he wants to tote up the number of initiatives for and against that is up to him. Frankly the quantum is of more interest to me. 
 It is not about how many points are on his side and how many are on ours; it is about the quantum and how much this measure will put into the economy. It is about how much stimulus we will get and how many businesses will make the decision to keep their doors open because they are not having the lifeblood sucked out of them by unnecessary cash-flow costs and compliance time. That is where the National-led Government has taken this bill ahead in leaps and bounds from what we previously saw. This bill goes considerably further. 
Mr Burns talks about this bill as representing a missed opportunity. Well if the bill is a missed opportunity the way it is what would it have been many many times smaller under the Labour Government? We have taken what was begun and we have made it better. 
Nathan Guy 
: Where are the Supplementary Order Papers? 
AMY ADAMS 
: That is right. Furthermore the other point we need to recognise is that the bill may have originated under the previous Government but the National-led Government will deliver it. 
We have heard this point made before on this side of the House but it bears repeating. Who cares who dreamt up the bill? Does anyone really think the public of New Zealand are interested in knowing who introduced the bill? No. They want to know who is delivering it to them. And who is delivering it to them? The National-led Government is delivering it. How long has it taken us? It has not taken us years; it has taken us a very small number of months right at the beginning of our term. 
Let us just reflect as we talk about that on the fact that this bill reduces the tax burden on business. We know that the Labour Government took mere days to raise taxes and 9 years to even start talking about cutting them. That is how much that Government cared about supporting business and simplifying the tax system—that is the truth. Let us get real about this. This Government the National-led Government is delivering the bill and it is the National-led Government that small business is thanking right now for getting on and doing it. 
When the speakers on the other side of the House keep going on and on and asking whether this bill is the big idea perhaps they could pause the histrionics hand-wringing and arm-waving for a while and open their eyes and ears. If they did they would see that it is going on all around them. This is not it—this is not it. I do not know how much clearer I can make it. This bill is one part of a large-scale response that this Government is delivering to the people of New Zealand. Members have heard about the rolling maul but it does not seem to have sunk in. We are not telling those members that this is our response to the recession; we are telling them that this is necessary it is being delivered it will make a difference and most important it is part of a huge range of initiatives that this Government is delivering. 
The stimulus package that we are delivering to this economy is we know in the top five in the OECD—the top five. That is not insignificant by any measure. 
 What we are doing though is bringing it about in a number of small steps and we are working on more initiatives all the time—and we need to remember that. 
The bill is a business bill that addresses business tax issues focusing on the small sector. As I have said before I have been a small-business owner. I have owned many small businesses and I have advised many hundreds of small businesses. I know what the reality of life is for those businesses; I know how difficult they find the environment they are currently operating in; and I know from my hours days weeks and months spent campaigning how many businesses have said to me leading up to the election that if Labour got back in they would shut down or move to Australia. Every member on this side of the House will have had the same experience because the system those businesses were operating under was killing them. It was sucking the lifeblood out of those businesses. There was too much red tape and too much compliance. They spent more time filling in forms paying taxes jumping through hoops answering surveys and complying with the bureaucracy to get any business done. That is why they could not cope and why they were going to leave. That was nothing to do with the recession. If these businesses were finding it hard to stay alive before imagine how hard they are finding it now with all that compliance and the recession hitting them full in the face. What we are doing—and doing urgently as a matter of priority—is starting to address that bureaucracy the red tape the compliance and the unnecessary hurdles. In this bill the focus is on doing that through adjustments to the tax system. 
The House heard my colleague David Bennett in his excellent speech talk about the fact that this bill delivers incentives. That is not a word we hear very often from the other side of the House. This bill is setting up incentives. We are incentivising businesses to get on and be productive. We are not punishing people who try to get ahead. We are incentivising them and that is something that we need to hear more about if we are going to grow productivity in this country. That is essential if we are going to keep jobs keep our businesses here and keep our businesses strong prospering growing and employing New Zealanders. That is what we have to do and what this bill does. 
The bill does it through a number of initiatives as we have heard detailed. We have heard Craig Foss talk about the uplift provisions and the fact that that will pump an extra half a billion dollars alone into the economy—that is half a billion dollars worth of stimulus just through the uplift provision. We have heard about the changes to the GST system which will mean that a business will not have to comply with GST on under $60000 of turnover unless that business wants to. More important businesses that are registered can now take the choice to deregister if that would be easier for them. In addition to that they have more option to send in their returns 6-monthly and as we have heard—and I have talked about it before because it is important—businesses will not have to switch to the invoice basis for registration until they hit $2 million worth of turnover. That threshold has gone up from $1.3 million and that alone makes a huge difference. When one hits that threshold—and I have been in this position—it hurts and it is a serious cash-flow hurdle for businesses to get over. One is paying tax on money one does not even have. That hurts and it can be many hundreds of thousands of dollars. 
The other thing the bill does is try to introduce some more simplicity into the tax system which I will always encourage and support. Our tax system should be as simple as possible. One of the areas that the bill does this in is clearing up the rules around legal deductibility for small businesses. They will not have to sit there and go through long-winded processes to work out which of their legal expenses are deductible. If a business spends under $10000 on lawyers within a year it can be deducted. It is simple it is easy it involves less time it makes it clear-cut and it means less time for the Inland Revenue Department having to go through and check it. It works all round and is exactly the sort of silly hurdle that we need to be removing. 
Bill read a third time.