Robertson Grant: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is subject to correctionRobertson Grant: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 10 February 2016. Volume:711;Page:8895. Text is subject to correction.]GRANT ROBERTSON (Labour—Wellington Central): I think my colleague Dr David Clark has covered very well the broad outline of our concerns on this bill but I want to make reference to the contribution that the Minister of Revenue made a few moments ago. Two things struck me about it. It was his first contribution as the Minister of Revenue and in it he managed to do two things. The first of those was to contradict the Prime Minister which is not a good thing I would suggest to do in his very first speech as the Minister of Revenue and I will explain that in a moment. But the other thing he did was the classic National approach. The Labour Party comes forward with a policy proposal to offer 3 years’ free post - high school training and education—Chris Bishop: A terrible policy.GRANT ROBERTSON: —which is a contribution an investment in the future of New Zealand. “Donald Trump Junior” over there does not like it but actually it is an investment in the future of New Zealanders. It is an investment in making sure we have people who are work-ready—Alastair Scott: An expensive bribe.GRANT ROBERTSON: —who are able to deal with the changes that are coming in the workforce and who will be the highly skilled workers whom employers implore us for day after day saying: “The thing we can’t find in New Zealand are the skilled workers who will drive productivity and innovation.” Our policy is an investment in that. It is an investment. Mr Scott called it a bribe. Well there is the great irony because the “bribe” is being funded from the same funding that the Prime Minister says is going to be used for tax cuts—and that is the bribe. That is the bribe because that is not an investment in the future of New Zealand and the long-term contribution that the next generation of New Zealanders can make if they get that chance at education and training. Once again from National it will be tax cuts that benefit the wealthy. It will be tax cuts that go to its mates rather than an investment that all New Zealanders can be a part of.My challenge to the members opposite is that they get up and defend tax cuts versus an investment in our future. We are more than happy on this side of the Chamber to have the debate with you and with New Zealand about which is the best approach. Should we invest in the future of New Zealanders or should we fritter it away in tax cuts for the National Party’s mates? I welcome that debate. The Chair is urging me to come back to the bill.The CHAIRPERSON (Lindsay Tisch): It would be good.GRANT ROBERTSON: Well I was only responding to the Minister—The CHAIRPERSON (Lindsay Tisch): I know.GRANT ROBERTSON: —and his contribution. Clause 1 of this bill asks us to talk about the title and as my colleague David Clark has said there are many alternative titles. I want to make reference to a couple of points here. The first of those is that two words do not appear in the title—and actually in all honesty—they should and those words are to do with child support changes. That is a big part of what this bill is actually about. And as my colleague David Clark mentioned this is not Michael Woodhouse’s fault so he gets off the hook on this. The process of making changes to the child support system has been a bit of a shambles under a couple of Ministers. The most recent of them Todd McClay did his best I suspect to try to undo some of the damage.To recap the situation that we came into when this bill was introduced to the House was that we discovered that the cost of implementing the IT system for child support changes had blown out from an initial $30 million—a fairly substantial sum—to $163 million. What we actually discovered when we got into the select committee process and the Commissioner of Inland Revenue came in was that actually it was more than that. The full roll-out of the child support IT system was going to be worth $225 million and they just decided not to do phase 2 of it at the moment.There were strong recommendations from Treasury from the State Services Commission and from the Government Chief Information Officer to wait until the vast project changing the IT system at the Inland Revenue Department (IRD) overall could be done and these child support system changes could be incorporated into it. The Government rejected that advice. The Government decided to press on and as a result we now see a potential bill of up around $163 million for the system. That is the equivalent of a quarter of the annual child support payments that the IRD collects. That is a huge amount of money and not a cent of it is going to be going into those kids themselves and their well-being. The words “child support” should be in the title. The Government should be prepared to acknowledge the fact that it actually got this wrong and is having to undo a stuff-up. It should acknowledge that in the bill.The annual rates element of the bill is here in the title and that is as it should be. Our support for this legislation does not indicate our support for those particular rates. I do challenge the Government members to stand up and say whether they believe the tax system at the moment in New Zealand is balanced and whether it is fair. Are people paying their fair share to ensure that all New Zealanders get a fair go? The answer to that question is no. This bill should have in its title the idea that there are missed opportunities.Time after time this Government brings tax legislation to this House that yes deals with some of the minor changes the remedial changes and the inefficiencies. Fantastic great but where is the vision? Where is the vision for a tax system that actually sets New Zealand up for the future gives everybody a fair go and recognises that those who have the most can pay a little more to ensure that all New Zealanders get the chances and the opportunities that they deserve? That is what is missing from this legislation and unfortunately it is missing time and time again from other tax legislation.The other matter mentioned in the title is research and development and my colleague Stuart Nash covered this pretty well in his contribution. But I want to make one point and it arises from a visit I made with Mr Nash to the Lowe Corporation in Hawke’s Bay. Andy Lowe was a very busy man he was with us that day and just as he stood up and he walked out the door—this was last year—he swung around back to us and he said: “R and D tax credits—you’ve got to do them.” That was what he said. What Andy Lowe was saying by that was that the grant-based system that is now operated under Steven Joyce also known as the picking winners system operating under Steven Joyce is not enough when it comes to research and development in New Zealand. What businesses are telling us when they say to the Labour Party “We support your R and D tax credit policy.” is that it provides certainty a surety—Chris Bishop: Stuart said that you wouldn’t give money to Sanford. Stuart said Sanford got nothing.GRANT ROBERTSON: —for them that they can invest in research and development. They do not have to be at the whim of Steven Joyce and when Chris Bishop was there I am sure he had his list of winners—when he was Steven Joyce’s adviser—that he picked out and said: “These are the ones we’ll pick this time. These are the people who will get the R and D support.” We do not think that is good enough on this side of the Chamber. What we think is necessary is that there is a broad base to research and development that all companies in New Zealand know that that is where they can invest and that they know they have got the support of the Government. The changes in the bill are tinkering. They are not dealing with the fundamental issue of how we lift research and development to drive a productive economy. Again it is a missed opportunity in this bill.In the brief time I have remaining I want to refer to the other matters and they are the commencement dates in clause 2. One could make a very—I know many of my colleagues want to pick this up—lengthy contribution looking at the commencement dates plural that appear in clause 2 because they range all over the place. I mentioned in an earlier call that one of them goes back to 2008-09 but in clause 2(5) we discover that section 250(3) comes into force on 10 October 2000—16 years ago. I wonder whether members opposite would like to help explain to us quite how that has occurred.Various other commencement dates appear and we do understand on this side of the House that when you are amending different Acts of Parliament that will happen. But to have a clause that goes all the way back to 2000—I think that Chris Bishop was probably running around in short pants in the Hutt Valley in 2000 listening to Blindspott or something like that and probably even then would have lost to Trevor Mallard in a bike race.Chris Bishop: He was a very good MP back then.GRANT ROBERTSON: Oh there we go. So Chris Bishop would have been there in 2000 and perhaps he could explain to us quite how we have a clause that gives a provision a commencement date of 2000.The Labour Party will be supporting this bill but we are extremely disappointed that once again a taxation bill has come here that fails to reflect what New Zealanders want—a fair tax system where people pay their fair share so everybody gets a fair go. Unsurprisingly the National Government does not believe in that.