Cunliffe David: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — Second Reading 
Cunliffe David: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — Second Reading 
[Volume:621;Page:16401] 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
: 
 It is a pleasure to rise and take a very brief call in support of the Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill. In so doing I note that it is an omnibus bill—and part of the Government’s busy tax-work programme—that contains several important themes around promoting growth and innovation; tax simplification especially for small business; reduction of compliance costs; and in the case of the issue referred to by the member who has just resumed his seat protection of the tax base. 
It is to the sale and leaseback issue that I first wish to draw the House’s attention. I note that the member who has just spoken from the National Party said that he did not necessarily agree with the Government’s policy intent on this matter. I ask the Opposition exactly which part of a sale and leaseback proposal that is designed essentially to defraud the public of taxation—which it needs and which it is legitimately entitled to—does it agree with? I do not concur with the construction that has been put on this matter—namely that it is retrospective. Indeed the Government’s policy intent on this matter was well signalled and was necessary in order to avoid a sequence of major transactions ricocheting through some of the country’s largest corporations with major risks to the tax base. So I think once again we can see with some clarity the contrasts between the approaches taken by both sides of the House on that matter. 
With regard to the Stobo review on taxation of savings which the previous speaker raised may I say that that is a much broader work programme than the very specific issue that is contained herein on venture capital and a matter that I was pleased to help the Minister work on. 
 It is well recognised that New Zealand does not attract its fair share of international venture capital flows. As it does not there is no risk of tax loss to the country because those flows that would not be taxable in New Zealand under this legislation currently do not come to this jurisdiction. Unless we have a measure like this we will simply not be able to get our share of those flows at least vis-à-vis Australia. So this is a very important provision and it is part of a very systematic attempt by the Government to improve the accessibility and continuity of capital availability to companies right through their life cycle from set-up until maturity. 
Finally can I mention briefly the 6.7 percent rebate to small businesses in their first year of operation. We hear so much from the Opposition about corporate tax cuts. When we give an effective tax cut to small businesses it is gracious of Opposition members to say that they agree with that. But I want to suggest that this is but a small part of an ongoing programme—which again has been well signalled—that is about making life easier and better for small businesses and simplifying the tax structure. We are pleased to see this. 
The Government is very grateful for the work of the Finance and Expenditure Committee chaired by my colleague Mr Cosgrove. The committee worked through the bill in detail and has recommended a number of minor changes. The committee accepted two Supplementary Order Papers from the Minister and this is a very good example of the tax process working as it should. I believe indeed that the generic tax policy process in New Zealand is regarded as a model worldwide.