Tisch Lindsay: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
Tisch Lindsay: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
[Volume:630;Page:2012] 
LINDSAY TISCH (National—Piako) 
: 
 I want to make very clear what we are debating here in terms of the balance dates for businesses involved in the bloodstock industry. Those in the industry who have a balance date of 31 July cannot change the date. Although the Minister for Racing says that they can do this and they can do that the racing industry is one industry where they cannot do that. 
Hon Mark Gosche 
: How big is the member’s horse? 
LINDSAY TISCH 
: It is actually a very good horse and when it wins the member will know about it. I want to reiterate the points I made earlier so that the matter is very clear. If I buy a horse whether it is a stallion or a brood mare today or before 1 August I have to use the old rates. They will apply regardless. One cannot change an old rate to the new rate. That is the first thing. But if I buy after 1 August which the Minister said will be possible because New Zealand Bloodstock will change their brood mare sales— 
The CHAIRPERSON (Ann Hartley) 
: I am sorry to interrupt the member but the time has come for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
LINDSAY TISCH 
: I reiterate the points I made about the balance date for those involved in the bloodstock industry. Ninety-nine percent of those involved in racing—be they breeders or investors—have a balance date of 31 July. In terms of the changes in Supplementary Order Paper 15 that we are looking at tonight—which National supports—people with a balance date of 31 July if they were to buy a horse would not accrue a benefit until March or April of 2008. The very small number of those in the bloodstock industry who have a balance date later than 31 July—for example 31 August or 30 September—will get a benefit 12 months earlier. I made the point that although the provision sounds very good—and that is the reason why National is supporting it—not everybody will benefit immediately from those changes. 
One way to rectify that would have been to change the date. People cannot change the balance date of their accounts even though the Minister for Racing said they could. [ 
Interruption 
] He would not know. But what could be done and what we could advocate is that the date rather than being in August could be moved forward to say April or May. Then everybody in the industry would benefit from those changes. I hope the Minister in the chair Peter Dunne who has advisers here will be able to give me an answer. This is not only my interpretation of the situation; I have spoken today to a number of accountants who specialise in the bloodstock industry and this is their interpretation of the meaning. 
I canvass another major point relating to Supplementary Order Paper 15. Subsection 7 of new section EZ4B inserted by proposed new clause 76BA relates to “Definition of item in formula”. The small print states: “Defined in this Act: bloodstock broodmare …” etc. The question I have is what is a brood mare. A brood mare in common terms is a horse that has been put to stud. But many horses are still racing when they are mated so they are not necessarily called brood mares. I ask the Minister whether all females from age 2 are covered by this definition of brood mare. If they are not then the owners are no better off than they are under the current provision. The current provision is quite clear but nothing I have read or have been told by the accountants I have been speaking to today tells me whether in essence the term “brood mare” applies to all female stock. Let us take as an example the horse that won the New Zealand Oaks race at Trentham last Saturday. It was a 3-year-old filly by the name of Legs—a great name for a horse. It comes from Matamata—the heart of racing—which is why I am so familiar with it and take such an interest in it. If I own this 3-year-old filly am I able to write it down as a brood mare? It is only 3 years old and could well be put to stud. 
Those questions that I would like clarified are important for the industry and for investment in the industry. Racing is an iconic industry and National’s policy back in 2002 and again at this last election was to give support and recognition to this very important industry. 
The second issue goes back to breeding statistics and why New Zealand is being left behind. Australia does not analyse reports or whatever; it takes action. If we analyse the results of breeding over a number of years we see that the number of registered brood mares has dropped from 9700 in 1999-2000 way down to now fewer than 8500. The number of stallions has dropped from 268 to 199 of which about 15 are shuttle stallions. Part of the taxation regime that National has advocated and it is included here is that if investment is made attractive by people being able to write-down breeding stock much more quickly—over a 2-year period rather than 4 years with stallions—we will have better investment in the industry. That will be good because it will create a climate for confidence and make it worthwhile for people to invest in the industry. At this time New Zealand is being sorely left behind. 
We really have only one stallion. It is Zabeel which is 20 years old. There is a promising one in Matamata by the name of Pins—a horse owned by Waikato Stud. That horse is 10 years old now and it is proving its worth and is going to be very very good. New Zealand is competing with Australia which has about 26000 in-foal mares compared with the number we have. Out of that the Australians will get about 17500 foals of which they will sell 7000. I ask why Australians and people from Hong Kong Singapore Ireland the United States and the UK would want to come to New Zealand when our industry is in decline. 
Dr the Hon Lockwood Smith 
: Dubai. 
LINDSAY TISCH 
: Yes Dubai as my colleague mentions is another very important area where New Zealand horses are doing extremely well. But we need to ask why although we have had quality bloodstock here we are losing out to other countries. The incentives that are put in place by the Supplementary Order Paper are certainly to be encouraged. 
The diminishing value concept of valuing livestock is very good. I note that at the moment the percentage is going from 37.5 percent to 75 percent. That means that someone buying a horse will be able to write off its value very quickly. For a stallion of $4 million $3 million can be written off in the first year—that is great. In the second year it will be 75 percent of the remaining $1 million. That initiative is certainly very encouraging. 
These are some questions that I hope will be answered. I look forward to the Minister of Revenue’s contribution. National has allowed the Supplementary Order Paper to come in without it going to a select committee. Bearing that in mind National members are supportive of it. We have questions for the Minister that we think need to be answered so that we can give certainty to the industry as a whole.