Cunliffe David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeCunliffe David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — Third Reading[Sitting date: 16 February 2016. Volume:711;Page:9048. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn): It is a real privilege to have an opportunity to speak in this third reading of the lauded Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill. Speaking of remedial matters I cannot resist the urge to refer back to the contribution of the well-known member and celebrated winemaker Allan Scott who said as follows in relation to tertiary studies—Hon Amy Adams: Alastair! Allan is the other winemaker. Come on!Hon DAVID CUNLIFFE: Oh really? I thought he was famous! I thought he was famous! Maybe not. OK. So the National intake was not quite what it seemed. My apologies to the member over in the back row of the National caucus. His contribution was complete and utter tautology. It was on the one hand that the Government is giving outrageous handouts to tertiary students and they do not deserve a penny more and then he went on to say: “But those very same students go on to earn a massive fortune through the course of their lives.” Doh! The penny did not drop that therefore they pay more tax. Universities New Zealand this week has proved conclusively by surveying literally millions of graduates that pretty much every single graduate educated at the taxpayers’ expense returns far far more in additional tax dollars to the Crown than it costs to educate them. If that is the quality of the Government’s analysis you can see why this bill is as limited as it is.This bill does three things: it perpetuates the myth that the National Government has an economic policy—it just rolls over for 1 more year the annual rates that it got wrong when it came in in the first place; it put up GST after it said it would put it down; and then it raised tax on the poor to pay the rich and the result was the economy got worse. And now as we look overseas and we see world stock markets in turmoil and the European banking system teetering on the brink of another global financial crisis what great ideas does the National Government bring to New Zealand? Bills like this which do nothing.So the Government does not change tax policy to get the incentives right. It does not help the economy move forward. How does it treat research and development? Well it got that wrong too. It got it wrong because this minor fix this piece of window dressing for the black hole expenditure that the member opposite could not explain is a pale version of what Labour and the Greens have been advocating for the last two elections—a comprehensive research and development tax credit that shares the risk between the entrepreneur and the inventor and the taxpayer because the entrepreneur never captures the full benefit of the invention—it flows to the economy as a whole. Therefore it is reasonable that we all help offset the risk.That is bog-standard economic orthodoxy pretty much throughout the OECD—except not here in good old “Planet Key” because Mr Key thinks he is smarter than the rest. “No. New Zealand business is much tougher. It doesn’t need a comprehensive tax credit. We’ve got a better idea—bureaucratic hoop jumping. We will force good Kiwi businesses to jump through hoops prove their wares to a bunch of bureaucrats in Wellington. And if they are very very good and say ‘Pretty please with sugar on top.’ then they will get a grant in addition to this minuscule offset.”—which is only a loan because they have to pay it back later.The Callaghan Innovation system is so flawed that its crowning achievement was to give a grant to the competitor of Team New Zealand Larry Ellison’s Oracle America’s Cup bid. Was not that fantastic? And there are publishing companies whose next stop was the SFO—the Serious Fraud Office or German subsidiaries whose next act after taking the cash was to relocate back to Germany. It is a joke and any small business that is trying to innovate will tell you that it is clumsy. So what fascinates the Labour Opposition is that Government members may talk the talk of the market but they cannot even walk the walk of the market very well which is why the business community is starting to lose confidence and chafe at the bit and boring pedestrian mean-nothing do-nothing bills like this do not help.