Anderton Jim: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
Anderton Jim: Taxation (Urgent Measures and Annual Rates) Bill — In Committee 
[Volume:651;Page:177] 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 Unlike Mr Foss I want to deal with some of the idiocies trumpeted by the last few speakers. If the National Party thinks that private sector investment and public sector investment are important for the future of this economy I ask why on earth it would throw away the first and most important partnership between the Government and the private sector in our most important economic base—agriculture and horticulture and the scientific research and development that backs it up—to the tune of $2000 million comprising $1000 million from the Government matched dollar for dollar by the private sector. Here is the challenge: can Dr Hutchison or anyone else Mr Bennett and all of them included guarantee to me that the private sector will put up $1000 million over the next 10 to 15 years without the Fast Forward scheme and without the research and development tax credit? If those members can let us hear all about it. 
Hon Dr Nick Smith 
: They never promised that. 
Hon JIM ANDERTON 
: Here comes Mr Smith again. Mr Bennett says that science is very important to National. It is so important that in the aspirational and visionary—as National members describe it—Speech from the Throne it was not mentioned once. That is how important science is to National. I think it came as a surprise to Dr Hutchison and a few others over there that it was not mentioned. They could not believe it; they know how stupid that was. The agricultural sector was not mentioned and exports were not mentioned. I ask how that fits with a Government that is “going for growth”. 
Mr Bennett says that tax cuts will lead to equal growth in science. I see. Will someone on $750000 who gets a $264-a-week tax cut invest that money in Crown research institutes or in research and development to support agriculture? They are more likely to go for a holiday to Bali actually. That is the truth of it. 
This is a terrible indictment on a Government that claims that it wants to “go for growth”. What does this mediocre visionless Government propose to do? The first act it takes in this Parliament is to introduce the largest tax increase on business in New Zealand’s history—the largest tax increase on business in New Zealand’s history. Never before has any Government come into this Parliament and massively increased tax on innovation. 
Hon Dr Nick Smith 
: It’s not as much as the Alliance wanted. 
Hon JIM ANDERTON 
: Mr Smith would not know anything about it of course. Never before has any Government come into this Parliament and carefully targeted tax increases at not just any businesses but the most innovative and creative businesses in New Zealand the ones that we need the most for our economic development. What are the chances that this aspirational and visionary policy and leadership are going to succeed? 
Dr Paul Hutchison 
: Very good. 
Hon JIM ANDERTON 
: Very good are they? I see. The title of an earlier part of the Taxation (Urgent Measures and Annual Rates) Bill was “Personal tax cuts”. If we are consistent the title of this part of the bill should be “Business tax increases”. That is what the title should be because that is the reality. 
Before the election a very creative and successful Auckland business leader took out a full page advertisement in the  
New Zealand Herald 
. Members may have forgotten it so I will show it to them. The advertisement said: “I’ve voted as many times for National as for Labour. I’m a founder of five successful companies selling globally to more than 30 countries.” Then he went on: “The party that should get your vote is the one with the best policies for real economic growth.”—the one “going for growth”. Well I ask members to guess which party it was. It was not the party now on the Government benches. If people want to know why they just have to look at this bill. He goes on to say: “Borrowing for tax cuts”—which is what this Government is doing—“going into a global recession is an attempt to drive a consumer spending recovery and frankly that is placing our kids in debt without addressing the financial crisis in any meaningful way.” I have heard today that we can afford tax cuts for the richest people in New Zealand but we cannot afford research and development investment for companies in New Zealand to develop our economy. I ask how that squares with “going for growth”. The truth is that it does not. I suspect that most of the members of the National Party know it. Most of its members outside Parliament know it and most of the people here in the House know it. 
Hon Dr Nick Smith 
: They voted against it. 
Hon JIM ANDERTON 
: Yes I am quite sure that the National Party told people “Don’t worry about it; we’ll fix it.” I think removing tax credits on research and development undermines our manufacturers and our exporters and their ability to compete against global competition. The global competition they are competing against has tax credits. Most of them do. 
Members can say that the previous Government brought in the tax credits late in the piece. That is fine; I will accept that. I had been arguing for them for some time to be honest and others had been too. Anyway we got there. We were late sure and we should have done it earlier sure but we got there. We had not only research and development tax credits but also a partnership with industry whereby industry would put in $1000 million. What does this visionary aspirational Government do? It cans the lot. Research and development investment and Fast Forward are gone. Where does the replacement come from? It comes from $262 a week extra for someone on a salary of $760000. Well that will do it! It is like that Tui ad: Yeah right!”. That will fix it. That will give us the visionary economy. 
By abolishing the research and development tax credits as well as Fast Forward National is telling New Zealand that we have enough research and development in this country already. Do we? We know that is not true. It is saying that it will work against companies that are thinking about doing more investment in this vital area. It is going to work against them. It is going to punish them for doing it. It is going to punish the most creative and innovative ones—not the rest but the ones who are actually doing the job now. 
In the last election—perhaps more than in any election in recent history—the economic management of this country was a critical issue. I accept that. People expect that we will make decisions for the long-term future of New Zealand. How is the long-term future of New Zealand benefited by $260 a week for say the richest New Zealanders versus research and development tax credits and investment in Fast Forward? 
I can give the Committee one simple story. The best and brightest student at Massey University—the best and brightest—had a scholarship to go to the UK. When our Government announced the Fast Forward scheme he announced without any influence from anybody that he was going to leave that scholarship after 6 months and come back to New Zealand because he could see a future here for scientific investment research and development particularly in the agriculture and horticulture sector. What are we saying to him now? We are saying: “Don’t worry it will be all right because when you are on a salary of $760000 a year you will get another 262 bucks a week.” That is not what he said he was coming back for. He was coming back to be a part of a future for research and development industry in New Zealand as the best and brightest student at Massey University. 
The National Government is closing the door on students like that. If it wants to see the best and brightest New Zealanders leave this country—and it claims it is against that—then it should just carry on with policies like this one and it will succeed. Countries are going to the IMF for loans and banks are closing all around the world. New Zealand I must say is in a much better position than most of those countries. We have a much better opportunity particularly as the world’s most efficient country in terms of food production. Our future in my view is much more secure than that of many countries but it will depend on the quality of the research and development investment we make at both public and private levels. In my view right now in Wellington in this Parliament the National Government is closing the door to that future because it is saying “No” to investment and it is saying “No” to long-term development in favour of a short-term return that it thinks will garner it support. 
I say to the Maori Party in particular and to United Future that their constituencies did not vote for this kind of future. Many of the Maori incorporations and developing Maori companies will be hit because of this research and development close-off. The challenge for the Maori Party is to work out what it is going say to the Maori companies and corporations which are starting to be an important element in New Zealand’s economic development. 
It seems to me that this legislation is the most short-sighted that I have seen in Parliament for a very long time. It is short-sighted in inspiration it is short-sighted in aspiration and it has no practical hold on the reality of what our country desperately needs. This side of the House will fight for the next 3 years to make sure that the National Government and its acolytes if they vote for it are held accountable for what will happen as a result of this failure.