Burns Brendon: Taxation (Business Tax Measures) Bill — In Committee 
Burns Brendon: Taxation (Business Tax Measures) Bill — In Committee 
[Volume:653;Page:2006] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am pleased to rise and speak in this debate the Committee stage of the Taxation (Business Tax Measures) Bill. I acknowledge the way in which the bill has proceeded through the Finance and Expenditure Committee and I also note that my Labour colleague the Hon David Cunliffe has foreshadowed some proposed amendments that will assist with making more of the opportunities that this bill provides to small to medium sized enterprises. They are the lifeblood of our economy. Around 90 percent of the jobs are provided by them. 
This bill will provide modest amending legislation to assist particularly the small to medium sized business sector. It introduces some welcome changes to tax law initiated in large part by the previous Labour Government since when we have had a world economic change of such magnitude that this bill deserves to be part of a much wider set of initiatives; perhaps—as Minister in the chair the Hon Peter Dunne has indicated—something more of a South Island rucking than a rolling maul. 
This is a bill for business as usual and what we see is what we get. There are welcome if modest changes to tax rates and regimes for small to medium sized enterprises but the bill is a small cog that is not yet enmeshed in a much wider wheel. That said some encouraging signals were made to the Finance and Expenditure Committee I thought. For instance the officials were asked to detail how the Inland Revenue Department is acting to do all it can to assist businesses through the obligations that they now meet given that thousands of them started the business year last year at a time when continued buoyant trading was predicted and given that the world outlook has changed so dramatically since that time. 
I am pleased to see that the department has acted and is now publicising some of the initiatives it plans to bring about to assist people in business who are having difficulties meeting instalment arrangements. With a range of options being available the department is emphasising that it is now possible to establish instalment arrangements for taxpayers to pay off their debts. These can be renegotiated in some circumstances. There is scope for write-offs. We are also seeing a media programme being developed so that businesses around the country know very clearly that the department will be there to try to assist them through these very very difficult times. An 0800 number is being staffed by BIZinfo staff and a contact centre team is being briefed to advise taxpayers on how best to meet their arrangements. I think those are good promising initiatives from the department. 
Unlike what was claimed by the member for Napier the bill does not do much to blunt the edge of the recession. It could have done much more to do that. 
Hon David Cunliffe 
: Not even the sharpest edge. 
BRENDON BURNS 
: Indeed! One of the things that came through and the Minister has commented on it in the last few minutes was around the issue of depreciation regimes for patent rights in New Zealand. As the Minister noted in Australia an 8-year write-off period is available for an innovation patent. In Canada it is 25 percent or the useful life of the patent. In Denmark it is 7 years. In France it is the useful life of the patent. It is 3 years in the case of Italy—a very innovative nation Italy. Japan has an 8-year depreciation period and Korea has 10 years. So we are well outside the normal range of some of the other OECD countries with our 20-year depreciation regime. I think the Manufacturers and Exporters Association made a strong submission and I am very hopeful that the Inland Revenue Department will take this into its work stream from here on. 
I also wish to comment as a new member of the Finance and Expenditure Committee on the complexity of tax law and of course this has now been added to by this bill. Several submissions raised concerns around that. Some of them were from bodies that one would have thought should not have any difficulty in dealing with tax legislation. I am thinking particularly of the Institute of Chartered Accountants of New Zealand which noted that tax is getting more and more complex for practitioners. Its members are the specialists so if they are having difficulty reading their way through measures such as this bill then one wonders how accountants in small firms in provincial cities and business people who do not have the full range of professional advice are able to work their way through the sorts of changes embodied in the legislation we have before us now. 
In summary this bill is business as usual. It is a good bill in many respects.