Parmar ParmjeetDr PARMJEET PARMAR (National): Thank you Madam Deputy Speaker for the opportunity. We supported this bill in the first reading and we supported this bill in the first reading because we really wanted to work with the Government to ensure that this policy was actually a good policy. We thought that we would get that opportunity in the select committee process but I have to say that the select committee process—I am personally and members on this side are all really disappointed because the select committee process was all about time management. If 45 minutes were allocated for this item on the agenda as soon as 45 minutes finished we moved on to the next agenda. No consideration was given if members still had some questions or clarifications that they needed to have addressed. So no consideration was given; it was all about pushing the process through the select committee process. And here we are; we are debating the third reading. Towards the end of the select committee process we realised that yes we cannot support this legislation going forward. When it came to putting a minority view in there Government members voted against that too. The line which came during that process was Take this line out from the minority view otherwise we are not going to include your minority view in the report back to the House." That was because they didn't like one line in that minority view and that was about the number of companies that are receiving growth grants that will be able to access R & D tax credits. The line said it was only a small number of companies—we know it's only one third that will qualify to get R & D tax credits. So they didn't like that line; it was all about their politics and they decided not to include the minority view—that is our view—in that report back to the House. I have never seen this happen before. I fully understand that the committee can vote it down but I've never seen this happen before. So that was a very very disappointing process. During the Minister's speech it was really interesting that the Minister didn't mention that this bill also abolishes growth grants. She didn't mention this because she knows that growth grants were working really well. This is all about politics not about supporting businesses to increase their spending on research and development. Why it's all about politics—I'm happy to explain that because we know that in 2007 the previous Labour Government introduced this policy the R & D tax credits policy and when National came in by that time we knew that this was not a good policy. There were several holes in that policy. So we decided to get rid of that policy and we started Callaghan Innovation. So it was National that started Callaghan Innovation and then through Callaghan Innovation along with other grants we started administering growth grants. I would say to the Minister Megan Woods and Government members that they should take a couple of minutes out of their time to read Callaghan Innovation's annual report—not just this year's report; last year's report and 2016's report. What they will find in the 2017 report—and even if it was during their annual review before the Economic Development Science and Innovation Committee they would have noted that—according to their 2017 report they said that there was a 46 percent increase in R & D spending by Callaghan Innovation customers with grants from 2014 to 2016.Then looking at the 2018 report it said "14 percent growth in business expenditure on R & D in 2017". They said "Our grant customers account for $1.07 billion of R & D spend"—Andrew Bayly: Billion?Dr PARMJEET PARMAR: A billion—$1.07 billion—and if we look at the Statistics New Zealand report it clearly says that total research and development expenditure increased 17 percent from 2014; this is the 2016 survey. That is a substantial increase. Increased R & D expenditure was largely from businesses increasing their R & D expenditure up 29 percent from 2014. Higher education and Government spending increased 7 percent and 5 percent respectively.So that is a very positive report but what we see from this Government is that instead of building on their success instead of building on something that was really working and was established properly they've decided to abolish that scheme to bring their politics in and to bring their policy from 2007 back. That's what I mean by saying this bill is all about politics. This bill is not about supporting business spending on research and development in a real sense. We had the Business Growth Agenda—yep in that we had our target to increase research and development spending—but this Government decided to get rid of that Business Growth Agenda that we had put in place.It was really interesting to see that the Minister said that this bill is going to provide an increase in research and development in a sustainable manner. How do we know? We don't know that because no one can tell us how many companies are going to benefit from this policy. Through growth grants we know so far around 300 companies benefited because that was put in place only in 2014; so it is just four years that we can measure for. But for this policy from the start we have seen that the Minister or the Government have not been able to tell us exactly how many companies are going to benefit through this scheme. I asked a question to the Minister on 16 August 2018 and the answer that I got from the Minister was that she said it would be around 3000 companies. But when the final draft came I read the report; it said it will be around 2000. So numbers fluctuated between 1500 to 2000 later on and when I asked that question again in the House the oral answer that I got from the Minister was that she's always said it's between 2000 and 3000. When we had Callaghan Innovation's annual review I asked them how many companies were going to benefit from the scheme. They couldn't give me a number. They said they had no idea how many companies were going to apply for the R & D tax credit.So this is a policy where we have no idea how many companies are going to benefit but here the Minister is saying it's going to be sustainable. When the Minister doesn't even know what the demand is going to be how can the Minister stand up and say it's going to be sustainable? We know there is an evaluation provision in this. It's after five years of implementation of this legislation—actually it's already come into effect from 1 April. We should be mindful of that and we're debating the third reading of this bill here. So in that evaluation we don't have a clear idea of what this policy is going to be evaluated against. If the Minister or the Government is not able to list those points is not able to tell us what the criteria will be for that evaluation how do we have confidence in this policy?In this policy there is a refundability provision for companies that do not have enough tax liable income and that is where we on this side have the biggest concern because these companies need cash early on before they start spending on research and development. They want that assurance because cash is really important for them not after they have incurred that expense and this Government has completely failed to address that issue. They have put a temporary measure in there—a refundability provision—which is going to be reviewed as part of their review which they have already said they are going to do which will include a policy that was put in place by the previous National Government the R & D loss tax credit policy. And what has that done? That has created a lot of uncertainty amongst those businesses and investors of those businesses because what businesses need is certainty from Government and this Government has failed to do that.So we are really disappointed that this Government has put forward a half-cooked approach because from the start we can see they have been so unorganised. We knew when the draft was going to come out but the draft didn't come out in that month; it was delayed by a few weeks. Then we were told in a certain month that the bill would be introduced. It didn't get introduced in that month; it got delayed by a few weeks and now the policy has already come into effect from 1 April this year and today is 2 May and we are debating the third reading of this bill. That is how disorganised they have been towards this policy.We feel that the Government should have taken time to develop this policy properly as officials also said that they didn't get enough time to develop this policy properly. The Government should have listened to them should have allowed enough time so that this policy was developed properly so that we could have worked with the Government to support something that is needed to incentivise research and development. We on this side fully understand that we need to support research and development and that is why we started Callaghan Innovation and that is why we had other things like as I mentioned the Business Growth Agenda and other targets that we had set to improve business spending on research and development. We understand that research and development is important to support our economy. So we are really disappointed and this side is opposing this bill. Thank you Madam Deputy Speaker."