12. Research and Development—Tax CreditDr PARMJEET PARMAR (National) to the Minister of Research Science and InnovationResearch and Development—Tax Credit12. Dr PARMJEET PARMAR (National) to the Minister of Research Science and Innovation: What advice if any has she received on the effect of the Government's proposed R & D tax incentive on businesses that are yet to record a positive cash-flow?Hon Dr MEGAN WOODS (Minister of Research Science and Innovation): As was clearly stated in the tax incentive discussion document published in April this year the Government recognises that it is important to support R & D businesses in tax loss or which have insufficient taxable income to use their tax credit. The Government is committed to providing a better policy option to support these businesses. We understand the challenges of pre-profit businesses and recognise the need for additional encouragement into research and development. We're committed to finding solutions. I've received many pieces of advice on this topic including the feedback we received through the consultation period on the R & D tax incentive which is helping officials to develop the best policy for pre-profit businesses. The individual feedback has been crucial in the discussions we're now having about the final design of the tax incentive. I look forward to making an announcement on how this Government will be investing $1 billion of new money on the R & D tax incentive in due course.Dr Parmjeet Parmar: What proportion of businesses that undertake R & D in New Zealand are in a pre-profit stage?Hon Dr MEGAN WOODS: What I can tell the member of the 300 businesses that currently receive a growth grant through Callaghan Innovation around 200 of those 300 are in a pre-profit situation. What I can tell that member is under the R & D tax credit rather than the 300 that will be helped through a growth grant around 3000 businesses will be assisted through that incentive. I fully expect a large proportion of them will be pre-profit but—Dr Parmjeet Parmar: I raise a point of order Mr Speaker. My question was about the proportion—SPEAKER: The member will resume her seat. The Minister's answering the question. You can't complain about an answer that hasn't finished.Hon Dr MEGAN WOODS: Thank you. I'll continue my answer—thank you Mr Speaker. Since the previous Government's support only stretched to 300 the Ministry of Business Innovation and Employment (MBIE) is currently doing the numbers on the vastly expanded number of businesses that will receive support from this Government to increase their R & D.Dr Parmjeet Parmar: I raise a point of order Mr Speaker. My question was What proportion of businesses that undertake R & D in New Zealand are in a pre-profit stage?" not about the number of businesses that receive growth grants versus the number of businesses that will receive R & D tax credit.SPEAKER: And I heard the Minister say in summary that they don't yet have the information but she gave an indicator of what the proportion was under a previous fund.Dr Parmjeet Parmar: Has she seen official advice from MBIE provided to her in November 2017 that the proposed tax credit rate is a reduction to the subsidy rate and is likely to reduce the growth in business R & D by existing performers?Hon Dr MEGAN WOODS: The issue the member is alluding to is of course the difference between a net and a gross figure. A growth grant is currently set at 20 percent but when netted out that is roughly around 14.5 percent for the business. We went out to consultation on a 12.5 percent tax incentive but as I reminded that member at the end of my last answer we are currently working through the final design options on the final outcome of the R & D tax incentive and we will have announcements to make in due course.Dr Parmjeet Parmar: I seek leave to table this briefing document obtained under the Official Information Act after going through the ombudsman's office. It's dated 2 November 2017. The title of the document is "Initial advice about introducing an R & D tax credit".SPEAKER: Has that document been placed on the website?Dr Parmjeet Parmar: No as far as I know.SPEAKER: Is there any objection to the document being tabled? There appears to be none.Document by leave laid on the Table of the House.Dr Parmjeet Parmar: Did she not take the MBIE advice seriously because like the Hon Phil Twyford's view about Treasury advisers she also thinks that MBIE advisers are kids?Hon Dr MEGAN WOODS: I completely reject the premise of that question."