Tabuteau FletcherFLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you Madam Assistant Speaker for this opportunity to speak to this fantastic piece of legislation brought to the House by this coalition Government. I just want to address a few comments by the previous speaker Andrew Bayly. He seemed to suggest that small businesses were disadvantaged by this legislation by the nature of their size and the costs of application. I distinctly remember that member asking officials that very question in the Finance and Expenditure Committee and kudos to the officials who spoke quite eloquently about the nature and the flexibility of the application process which would reflect the size and the nature not only of the business but the application itself. There is the ability and this legislation does reflect the opportunity for small businesses to take advantage of this legislation in a cost-effective way. So I completely rebut the comments from the previous speaker. Mr Bayly also made the comment—and I quote—that he didn't know what we were trying to achieve with R & D tax credits". Well let me spend the next eight minutes and 45 seconds outlining exactly what it is we were trying to achieve with R & D tax credits in the New Zealand economy. The tax credits themselves are an incentive for business to engage in efforts within their organisation that will see them advance accelerate develop and grow existing organisational plans products—Andrew Bayly: Is that your elevator pitch? FLETCHER TABUTEAU: —services and systems. So to Mr Bayly I suggest to him that he just read some basic 101 books on R & D tax credits. What we're trying to achieve here is essentially a level playing field. So around the world essentially all of our OECD trading partners run R & D tax credit regimes. New Zealand is behind the times. Jonathan Young: That's what it's all about! FLETCHER TABUTEAU: Yes it is all about that. So for nine years Mr Young this country has been served incompetently by the previous regime. They attempted to bring in this exact regime. They attempted to bring this in—no actually forgive me. It was the previous Labour regime who brought this regime in and the National Party came into power and scrapped it. They said they didn't want New Zealand businesses to take advantage of R & D tax credits from the Government. It is shameful. They shut it down and they said that it wouldn't make a difference. Well we know from international example that R & D tax credits make a huge difference to research and development of companies around the world and our New Zealand businesses have been suffering from that kind of competitive disadvantage as it were because our international competitors have been able to avail themselves of this opportunity. Right now as we have learnt from the Prime Minister and from the Minister of Finance earlier in the House today the world economy is going through an economic downturn. What is exciting though is that at the same time we have learnt that right now the New Zealand economy is performing better than essentially all of our trading partners. In fact the Acting Minister of Finance tried to list all of the economies that we were performing better than but was stopped by the Speaker because the list was so long. That is how well the New Zealand economy is performing and that is a huge kudos to New Zealand business right now who are performing exceptionally in this world economy. What they're doing is exporting to the rest of the world. Actually right now to be fair the New Zealand dollar's quite advantageous for them. So there's lots of money to be made right now around the world. This piece of legislation came about I'm proud to say in negotiations between New Zealand First and the Labour Party as we formed what has become a magnificent coalition of these two parties. What New Zealand First was saying—and I acknowledge the previous contributors who spoke to the fact that New Zealand businesses are performing exceptionally well. We are near the world average in terms of percentage of GDP to R & D but we're not there yet. So the conversation was about what can a good practical Government do to make sure that New Zealand businesses have an advantage—well actually not an advantage but get on to the same playing field that their international competitors are able to avail themselves of right now. This is what this legislation seeks to do. We have strong evidence from around the world from international studies that tax credits are an effective way of raising R & D engagement by business. I think it was a speaker on the opposite side of the House who spoke about talking to business not wanting these things. Quite contrary is my experience. I have gone out in my privileged position as the Parliamentary Under-Secretary to the Minister for Regional Economic Development which is a great programme that will complement what it is we're trying to achieve here. But the conversations around R & D tax credits and the possibilities that small medium and large businesses will be able to use because of this legislation because of the 15 percent tax break—I'm going to say—that they can avail themselves of is a huge huge incentive for them to invest to spend to commit to their businesses to their products to their services and in so doing increase their economic performance and hopefully their profits. They told me that they will see their profits increase because of this; not only their profits but the New Zealand economy jobs and regional growth. Now that is exactly what this Government has sought to do through this legislation and I believe that through those conversations I've already had engagement which tells me that this will be the outcome of this legislation.So it is with a great deal of pride actually that I stand to support this legislation. This is a Government that is spending more on our engagement around the world that is doing more in our engagement around the world to support businesses in their efforts to grow business in export markets around the world. In fact just this evening I was speaking to the Minister for Trade and Export Growth and my understanding from a very brief conversation is that exports to Canada have already increased by 600 percent in specific industries. Now that is exactly the kind of conversation that businesses this economy and this Government is absolutely proud to have. So on that note I support this legislation and absolutely commend it to the House. Thank you very much."