Smith Lockwood: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
Smith Lockwood: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
[Volume:630;Page:2022] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I would like to pick up from my good colleague Chris Tremain who was speaking just now. It is interesting that on this side of the House there are a number of people who have been and still are involved in running small businesses. I have some experience in this issue—practical down-to-earth experience not textbook stuff or theory stuff. Chris Tremain has run a number of businesses. I continue to run a small business. The issue of the asset register has been something that strikes us all as being crazy because at the moment it is impossible to get an asset off one’s register if the depreciation rate on that asset is a percentage depreciation. It is mathematically impossible to get it off one’s asset register. So long as the asset exists there somewhere in the business one cannot expense it because it still depreciates. It might be down to $5 and if it is depreciating at 20 percent then take another 20 percent off so it keeps going down. It results in an asset register a mile long. 
Rt Hon Winston Peters 
: Write down it was stolen. 
Dr the Hon LOCKWOOD SMITH 
: The Rt Hon Winston Peters suggests that we should write it down as having been stolen. It is that kind of improper behaviour that has seen a Cabinet Minister resign today. That is the kind of thing where a return to the Companies Office was not strictly correct. We have seen a Cabinet Minister resign over it. The Rt Hon Winston Peters has suggested it to the House—and some people probably do that—but honest members on this side of the House try to make sure that their asset registers are correctly administered. 
I appeal to the Minister on this. If one is serious about complying with the law one does not write those things off as being stolen if they are still there. Yet the problem for busy small-business owners is that it does take quite a lot of time to go round and check on all those assets on the asset register. There are heaps of them and one thinks: “Good God. Where the hell’s that one now?”. 
So the $10 threshold that we propose is a very simple practical measure. I realise it has a fiscal implication and I realise the Minister can therefore outlaw it. We have put the smallest possible threshold we could devise of any relevance to make sure the fiscal cost was so low that it would not cause the Government a problem fiscally yet would establish the principle of a threshold for expensing assets when their value becomes so low they can be written off the schedule. 
It kind of makes sense that the Government is recognising that there should be a threshold for the purchase of new assets. In fact I think we learnt at the select committee that the Inland Revenue Department does not capitalise assets unless they are over $2000 purchase price for some reason or other. I am not sure but my notes from the select committee meeting suggested that. So it is recognised that there should be a threshold for purchasing new assets. What we are saying here is that this is a chance to establish a threshold—albeit a very low one—for assets as they depreciate on a percentage basis so that one can get them off the asset register so that it can become a more meaningful document that is of value to a business in managing its asset base. So technically I accept that my amendment may not be within the Standing Orders because it has fiscal implications and was not submitted 24 hours in advance but it is a simple practical measure with very low fiscal cost that could have real meaning for smaller businesses.