Cunliffe David: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
Text is incorporated into the Bound Volume 
Cunliffe David: Taxation (Venture Capital and Miscellaneous Provisions) Bill Taxation (Annual Rates of Income Tax 2004-05) Bill — Third Readings 
[Sitting date: 14 December 2004. Volume:622;Page:17822. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
 on behalf of the  
Minister of Revenue 
: I move  
That the Taxation (Venture Capital and Miscellaneous Provisions) Bill and the Taxation (Annual Rates of Income Tax 2004-05) Bill be now read a third time 
. The wide-ranging Taxation (Venture Capital and Miscellaneous Provisions) Bill reflects many of the main themes of the Government’s taxation policy work programme with measures to promote growth and innovation to simplify taxation where possible especially for small businesses to reduce tax-related compliance costs and to protect the revenue base. The bill removes a taxation obstacle to unlisted New Zealand companies gaining access to private foreign equity including venture capital. It introduces venture capital rules that are similar to Australia’s which should help New Zealanders to compete effectively with that country for venture capital. 
As a measure that is designed to help small businesses the bill introduces a tax discount for self-employed people who make voluntary payments of income tax at any point during their first year of business. The point of the change is to help to relieve the financial strain that some individuals face in their first couple of years in business. The bill also introduces changes to the legislative framework that governs the resolution of disputes between taxpayers and the Inland Revenue Department to improve and simplify the process for both parties.  
The bill allows the costs associated with patent and resource management consent applications that are withdrawn or not granted to be tax-deductible. It makes the taxation treatment of replacement plantings of fruit trees more flexible which will encourage the use of the most commercially desirable varieties of orchard plants. In order to prevent a potential revenue loss the bill closes a loophole involving the sale and leaseback of intangibles such as trademarks and newspaper mastheads. 
Another revenue protection measure deals with a technical problem in the way that New Zealand dividend rules operate. It closes a loophole through which New Zealand residents can receive income from Australian unit trusts that is taxed neither in New Zealand nor in Australia. As well as dealing with technical taxation issues that arose from the severe floods in February and July this year the bill also provides the Inland Revenue Department with more flexibility when responding to taxpayers who are severely affected by that type of event. 
Finally the Taxation (Annual Rates of Income Tax 2004-05) Bill confirms the income tax rates that will apply for the 2004-05 income year. On behalf of the Minister I say I am pleased that the legislation has reached its third reading. I would like to thank all those who contributed to it: the individuals and organisations who made submissions the taxation policy officials who have worked hard on it and supported its many parts through their passage and the Finance and Expenditure Committee for its careful consideration of the legislation. I commend the two bills to the House.