Falloon Andrew; Williams PotoANDREW FALLOON (National—Rangitata): Thank you Madam Assistant Speaker. It's a pleasure to be taking a call this afternoon and speaking on the Taxation (Research and Development Tax Credits) Bill. I enjoyed—as I often do actually—the contribution of the Green member Chlöe Swarbrick opposite and she noted that it's the first time that she's heard National MPs speaking with some scepticism about how a tax credit might be applied. Well I'd just simply counter by saying that it's the first time I've heard the Green Party speak in favour of a reduction in tax. We do support this bill though because primarily we do support a greater uptake of research and development in the New Zealand economy particularly for small businesses. We also recognise the destabilising effect that can happen when Governments do change and Governments have a habit sometimes of throwing out everything that the previous Government has done. So we are conscious that we want to preserve some stability and ensure I guess a lasting research and development regime that can continue into the future. So we do support it to select committee and we will be working in a collaborative way and contributing hopefully to a lasting policy to support research and development. But I do wish to just dispel a couple of myths that have been raised this afternoon and in the wider debate. The first one is that we do actually have a very innovative economy and if you want some evidence of that you don't need to look too much further than my electorate of Rangitata. In my electorate of Rangitata we've got a very large Fonterra plant called Clandeboye. The Clandeboye plant now produces more than half of the mozzarella that tops the pizzas in China. Several years ago Fonterra moved away from the volume products like milk powder and started investing in some of the value-add products and that's a really good example where a huge amount of mozzarella is now being produced in South Canterbury and it employs a large number of people in the Temuka area. That sort of innovation was supported by the previous National Government through things like the Primary Growth Partnership also the Sustainable Farming Fund and of course we also created Callaghan Innovation to work hand in hand with New Zealand Trade and Enterprise to help create and market the new products and ideas. In the past 12 months Callaghan Innovation has worked with more than 2700 companies so their spread is quite broad. They do work with a range of companies. There has been some criticism I think so far in the debate of the growth grant process and how they're allocated but I do just want to remind members opposite of why that growth grant scheme was put in place. It's because when we came into Government in 2008 there was a situation where the previous tax credit regime was being rorted. Unfortunately a number of companies were reclassifying existing expenditure as research and development and they weren't actually undertaking genuine R & D. So we unapologetically axed that scheme and brought in the growth grant scheme because we felt it was important that if you are going to undertake R & D then you should be up front about the fact that you're doing that and that you should provide some evidence that you are doing that because otherwise you do have a system where it is being rorted. So that will be the focus I think of members of the committee. I hope it's coming to the Economic Development Science and Innovation Committee to be worked on because I'm very keen to ensure that we do have a lasting research and development scheme but that it's one that's robust and has a number of safeguards to ensure that that rorting doesn't happen. ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Dr Deborah Russell you have five minutes.