Hughes Gareth: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — First ReadingText is incorporated into the Bound VolumeHughes Gareth: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — First Reading[Sitting date: 11 March 2015. Volume:703;Page:2158. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): Kia ora Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to speak on the Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill. As members are no doubt aware this is a very large bill that deals with things such as black hole investment tax pooling Working for Families tax credits and a grace period for deregistered charities—a great deal of matters that deal with tax. Members in this House and people across the country know the importance that tax plays in our economy both for the provision of essential services but also as an economic signal.I want to touch on a point raised by the last member Jami-Lee Ross. Jami-Lee Ross talked about the role of innovation research and science. What the member did not raise was how woefully inadequate we are when it comes to supporting innovation research science and technology in New Zealand. We are in the bottom half of the developed world for the amount that New Zealanders spend on innovation on the practical science. When it comes to patents we patent four times less than the average developed nation. There is a limit to how we can grow our economy. When it comes to cramming cows on paddocks with grass there is a limit. We are seeing it in our paddocks and streams. But there is no limit to the amount of technology intellectual property services and entrepreneurs starting up new companies. There is no limit to the amount of services we could be exporting around the world via internet cables or by selling intellectual property. That is the future for New Zealand: true innovation. I congratulate Callaghan Innovation on some of the work we have seen when it comes to tax credits but it is still a drop in the bucket and is not competitive with our international peers. I want to see a country that supports innovation that is near the top that is producing more patents that is getting richer off the back of it because ultimately what the Green Party stands for is a richer New Zealand.At the Education and Science Committee today—I just want to tell a brief anecdote with regard to GNS Science geological and nuclear sciences. This is a company that invests a great deal of taxpayers’ money in finding oil but it also has a lot of geothermal energy expertise. This is an amazing growth area around the world. It is a true success story that New Zealand is exporting some of the geothermal tax credit based on the innovation developed in Waiariki in New Zealand in the 1950s. But guess how many patents this Crown research entity achieved last year? Two. It achieved two patents. We can do much better as a country as Crown research institutes and businesses if we have the right tax incentives. This is why one of the big debates within the sector is whether we should be doing the growth grants as Minister Joyce splashes his largesse across the country or whether we should be supporting research and development tax credits.Tax credits you could argue are fairer. You could argue that it takes out the politicisation of people or a particular group of people appointed by a Minister who picks who the winners are. Again another anecdote from the select committee today was heard from Callaghan Innovation. It had given more than $670000 to Trans-Tasman Resources a majority foreign - owned company with a former Prime Minister as a board member. It was given $670000 from Callaghan Innovation to attempt to mine the ironsands in the habitats and feeding grounds of Māui’s dolphins and blue whales—$670000 of taxpayers’ money for a company that could not even get a consent under National’s Environmental Protection Authority.While we are talking about tax research and development matters let us make sure we are looking to the future in terms of the global trends in terms of clean energy IT innovation and science. It is not about looking to the past when we talk about mining or cramming more cows on paddocks. We will never compete with Uruguay or China to cram more cows on our paddocks and trash our environment faster. We will not compete with Australia to dig more holes. We can compete on our strengths which are our knowledge our education our “niches” as Sir Paul Callaghan said and our innovation. This is our future—one based on innovation. The Green Party members are proud to have produced many positive pragmatic policy solutions and we will continue to champion that as we debate tax research and development and other matters. Kia ora.