Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): I'm very pleased to be able to take a quick call on the Taxation (Research and Development Tax Credits) Bill. It's a bill I feel very strongly and very passionately about. One of the great challenges that New Zealand faces is that over the last 40 years our relative economic performance in respect of productivity and the living standards that can therefore be supported has continued to decline against OECD partners against countries with whom we compare ourselves. That has affected our ability to deliver the living standards and all of the good things that we want for our people.This is one of the areas that make a difference. We have become an economy that is overly reliant on lower-value commodities and the service sector. Now as important as those sectors are we need to be developing those sectors of the economy which are higher value higher wage and drive the higher export receipts that bring wealth into our country. We absolutely know from all of the international evidence that one of the strongest things that we can do to be bridging that gap is to increase our spending on R & D. This is the kind of far-sighted economic policy that we have been lacking for so long.This bill is not a silver bullet but it is an important piece of the puzzle: 30 out of 35 OECD countries have a research and development tax credit of this kind because they recognise the value of embedding within our systems the value of research and development. Tax credits of this kind are by their nature less haphazard and less subjective than the grants processes that we have at the moment. It effectively means that if you are a business who is investing in bona fide R & D which has huge spillover economic benefits then you will be eligible. There's no favouritism. There's no subjectivity. There's no picking the fashionable sectors of the day in terms of what will be funded. If you meet the criteria then your R & D expenditure will be recognised and a tax credit will be within your reach as a business. So it's a very good measure that will help to lift our private sector R & D spend up to that 2 percent figure that we are aiming for.There was a good select committee process that considered this bill which made quite a large number of changes—most of which were canvassed at the second reading and committee stage hearings of this bill—but I think basically we've been able to make a good bill better than it was. It's one that I do strongly support.I do need to address some of the comments made by my colleague Jonathan Young in his previous speech. It is correct that there is no minority view from the National Opposition that came from select committee to this House at the committee stage. I want to be very clear about this as the chair of the select committee: the Finance and Expenditure Committee has a very strong record of collegial relationships across the table of minority views being able to come through that express the views of the Opposition when bills come back to this House. In this particular case there was an attempt in that minority view to put words in the mouths of officials and that is what members on this side viewed to be unacceptable and in bad faith. Members on this side attempted to resolve that situation by making some simple suggestions to resolve that problem.I believe that in this Chamber and in this House when we are debating legislation it is absolutely proper for members to disagree and for members to put forward different views. That is how our democracy works but there has to be a degree of fairness in terms of the way that we treat the officials who in an impartial and fair way advise us as we attempt to create good legislation. So in my view that was an act of bad faith and in fact members of the National Party tried to assist their colleague in this regard and that particular colleague did not see an intelligent and appropriate way through that. So it was regrettable that that happened but I do note that that person was not a permanent member of the Finance and Expenditure Committee and was not perhaps familiar with the ways in which we do try to work together to resolve these matters.But coming back to the core issue: this is a good bill. It will help to drive a more productive economy that can drive the living standards that we want in New Zealand. It is based on the international evidence that lifting R & D through a tax credit system can help you to do that. It has been worked through well by the select committee. On the issue of refundability which has been raised in some of the speeches previously these are for businesses who are in the pre-profit stage and therefore don't have a profit against which to claim a tax credit. There is a limited refundability provision of up to $255000 for the first year that is specifically designed to be supporting those smaller start-ups who might be in pre-profit. A lot of further work is going on into developing an enduring scheme to deal with that issue and I'm quite confident that that will be sorted out by next year. I commend this bill to the House and I'll be very happy to see its passage later on today. Thank you Madam Assistant Speaker.