Parmar ParmjeetDr PARMJEET PARMAR (National): Thank you Madam Chair. I'll take this opportunity to focus on research science and innovation. We have heard again and again that there is around one billion dollars for R & D tax credit policy—policy that is still going through the development phase. We also heard that there is a total of $1.2 billion for research science and innovation appropriation in 2018-19. If we look at this amount of $1 billion that is allocated for R & D tax credit policy there is only around $200 million for the rest of research science and innovation.Another thing to note which was brought to the Minister's attention during the Estimates hearing is that this amount that is allocated for research science and innovation is not substantially or unusually larger than what we have seen in past Budgets. If we look at the past Budget—that is the 2017-18 appropriations—it was around $1.1 billion and in the 2018-19 Budget it's $1.2 billion. So it's not that the Minister has been able to get a substantially larger amount for research science and innovation.One thing to note here is that the Minister is taking a big chunk of money out from growth funds from next year and is putting that towards R & D tax credit policy; so this $1 billion is not actually new money towards research science and innovation. During the select committee process during the Estimates hearing another interesting thing to note was that the Minister had not done any homework about the Estimates hearing and that is the same for the R & D tax credit policy as we can see in the proposed document. But I can fully understand that the Minister has no choice about R & D tax credit policy because that is a Labour Party policy and yes she is the Minister but she has no choice; she has to go ahead and implement the R & D tax credit policy in some form. But for the Estimates hearing she had a choice because for every question that was asked she kept giving speech-like long answers beating around the bush to fill up the time.A simple question was asked which was: How much of this $1 billion that is allocated towards research and development tax credit policy will go towards existing business research and development?" She said she could not give that answer; so she could not tell us how much of this $1 billion would go towards existing business R & D. Let me put this the other way around: if she is unable to tell us how much of this will go towards existing business R & D how can she assure us that this will add to New Zealand's business R & D? There is no assurance that this R & D tax credit policy will add to New Zealand's business R & D.The next question was about how this is going to be monitored because we know that in other countries like in Australia we have seen people using creative accounting skills to claim R & D tax credits. The Minister said there would be a penalty-based regime through the IRD. Was there any money allocated from this appropriation for the IRD? No there is no money allocated for the IRD to go out and monitor compliance. So this is going to be another layer for businesses to make sure they're compliant with and that they understand what research and development means according to the legislation. So they would have to check the definition and make sure they're complying and the IRD will have another layer of going out and monitoring these businesses.Then as a person who is very passionate about small and medium businesses the next question was about whether R & D tax credit policy will help small and medium businesses. Will it help high-tech high-growth industries that keep investing and reinvesting so that they can grow in the first few years? The Minister had to admit that there is nothing for high-growth high-tech industries that do not have any tax-liable income. So yes they need to have tax-liable income which means they need investment. They will have to go out and find some money to invest in their business. Once they have tax-liable income they can come and claim this R & D tax credit.Any business that is spending less than $100000 will have to get their research done through an approved supplier. The Minister could not give that answer; she needed help from an official and that's fine but how can we give more importance to research that is done by an approved supplier than research done by the business company directly? So this is another layer of administration that is going to be added on to businesses to go out and find an approved provider of research so that if they have tax-liable income they can claim R & D tax credits. So it's a joke. This policy will not add to our business R & D. Clearly there is no assurance of this policy—[Time expired]"