Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
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CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to the title of this bill and to bring another strain of thought to the research and development tax credit side of this debate. I want to speak specifically on that matter and more generally on the wider tax base. 
National will not be voting for this legislation. We believe that the tax position put forward under clause 3 is not the direction in which this country should be heading. This bill is not going down the track of setting the vision that we need as a country and as a result we will not be voting for it. 
I want to focus on the research and development tax credits and why we do not believe they will specifically achieve what we need in this country. Under the Labour Government we have seen a supposed agenda of economic transformation. But the reality is that although the New Zealand economy has changed over the last 6 to 8 years there is no way that it has transformed. Other countries have changed rapidly. The export composition of many countries—of many small nations like Finland Ireland and Singapore—has transformed their economies significantly to the point where their exports as a percentage of GDP are significantly higher than those of New Zealand. We still wallow at the 20 percent level of exports to GDP while other countries like Ireland have a significantly higher rate than that. Those countries saw 10 years ago 8 years ago 6 years ago the need to transform their economies away from specifically agricultural-based industries into more of a weightless economy and they transformed their economies rapidly. 
The legislation before us gave us the opportunity to leapfrog to go forward and to focus specifically on the industries that will transform our economy. I think the bill has lacked focus in that regard and that New Zealand has lacked focus in terms of its economic transformation agenda. New Zealand needs to act quickly to take its exports forward. The area where I think we can do that significantly is in the weightless economy. In 1996 our total exports were $20 billion and in 2006 they were $32 billion—a growth rate of some 51 percent. That is a significant contribution. If we look at the weightless economy which are services that New Zealand provides to economies overseas—such as 24-hour telecommunications services and helpdesk services—we see that they have grown from $792 million to $2.3 billion over the same period of time. That is a 193 percent increase in exports generated out of this nation. To me that is the focus that we should have had with this bill. 
I see that the research and development tax credits in this bill are across all industries such as my own businesses—my real estate business my travel business and development companies in Hawke’s Bay. I fail to see how an investment in research and development tax credits for those businesses will take this nation forward or encourage export growth or improve our balance of payments deficit. Quite frankly it will not. Companies that are not in that market will use all manner of means to get a tax credit they would not otherwise get. I think that is the wrong approach. The research and development tax credit was an opportunity to focus on the weightless economy and to focus on our export markets to drive our exports as a percentage of GDP forward and upward. In that regard I am disappointed. 
I do not think there has ever been a precedent for an Opposition party to vote for another party’s tax bill and National will not be changing that tradition. National is against this bill and will not be voting for it.