Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Madam Assistant Speaker. It is a pleasure to be talking on this Taxation (Research and Development Tax Credits) Bill. First of all I'd just like to congratulate that member who's just resumed his seat Tamati Coffey for such an incisive display of knowledge around this bill—very good very good. Nice to see him leading off.This bill is about research and development and you know it's interesting going back and looking at history and the context of what we're talking about tonight. The thing about research and development is that no one in this House is going to stand up and say we shouldn't be doing it—no one—but the issue about research and development is that it is a see-sawing issue. We have been through periods where we've had these types of schemes in place and then we've gone back to specific tailored schemes and then we've reverted back. Unfortunately we've got another reversion—another revision and reversion. It's a reversion back to the past and this bill takes us from where it was a very targeted system using the Callaghan group to actually identify and work out where we want to spend our dollar—the hard-earned dollars of the New Zealand public—and what this bill does is it says No we shouldn't do that. No we're going to scrap that. It's been in place for a few years. No we're going to be going on because philosophically we've got to be seen to be doing something about R & D." And of course now we've arrived at this new thing which we've all seen before which is "Let's just open it up and go for it."The first thing that I found staggering is how few people actually came to the committee—32 submitters. Now there are roughly 530000 businesses. I actually got my computer out and worked it out as a representative sample. That is 0.00000006 percent. Isn't that amazing the number of people who thought "This is so incisive so important." that they came to our committee and made a submission. And I'd say to you there are not many companies—and I've been in this situation—ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! Despite the fact that you clearly speak very well Mr Bayly I cannot hear the member over the chatter and rabble that's going on in the Chamber. Can we settle please? We've got 15 minutes to go and I would like that to be done with some order. Thank you.ANDREW BAYLY: And I appreciate that Madam Assistant Speaker.ASSISTANT SPEAKER (Poto Williams): I'm sure you do. We just wish they would listen.ANDREW BAYLY: There are times in this House when there are people who are very noisy.So the issue is that not many companies or business owners are going to say "No we don't want R & D support." and that is correct. We do need to supply them and support them but the issue I've got—the first issue with this bill and we discussed it at length with the officials—is the one around definition. What do you want to try and achieve with research and development? I'd suggest to you that what you're trying to do is grow the economy faster by supporting those businesses that need the help in the form of financial—but it's not only in financial terms; it's also all the other things around governance and all those other aspects that will enable those companies to proceed and grow faster than they otherwise would.If you have a clear line of sight on what you want to achieve then the issue with this bill and the definition—and this is the bit I struggled with—is that we have moved one from being very clear about commercial outcomes. It's fine as the honourable member Tamati Coffey talked about achieving a 2 percent spend on research and development. I would suggest to you that that's not what we're after. That is about just spending money. That's about ticking a box. What we actually should be measuring and what we should be achieving with expenditure of this scale—we're talking about a budget for this of about $1.4 billion over four years—what we should be trying to achieve is actually to grow this economy much faster. That is the issue of course. We've seen this country go backwards from an annual GDP growth rate of 3.3 percent under our Government over the last three years to now just over about 2.6 percent—a big significant drop. This is the type of thing that can drive this economy because when you do this well you can afford to spend it on health you can afford to spend it on police you can afford to spend it on all those things like education. This bill I think it has an issue with its objective and its definition. Also I think the issue around its cost—we did make an adjustment reducing the threshold from $100000 to $50000 but the one issue is: what is the cost to make applications? Is it worth it? Are smaller companies going to be prepared to do this? I think these are the issues—particularly around start-up businesses—and this bill does not deal with them. It assumes that we've got these larger businesses who are doing research and development and I would suggest to you it's not necessarily about them. It's about the dynamic small businesses who will yet become that big business. I think that is the issue with this bill and that is one of the principal reasons that we cannot support this bill in its form. We do support the overarching objective for New Zealand to increase its spend but it's got to be for the right purpose. It's got to grow these companies and it's got to result in a better outcome for all New Zealanders."