Scott Alastair: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — First ReadingText is incorporated into the Bound VolumeScott Alastair: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — First Reading[Sitting date: 11 March 2015. Volume:703;Page:2166. Text is incorporated into the Bound Volume.]ALASTAIR SCOTT (National—Wairarapa): It gives me great pleasure to speak on the Taxation (Annual Rates for 2015–16 Research and Development and Remedial Matters) Bill. First of all I would like to say that this bill is one that continues a theme—a theme of making it easier for small businesses to conduct their business. It allows a continuation of a theme whereby bureaucracy is removed so that people can get on and create employment amongst their communities and so that families can get on and aspire to better and more prosperous times ahead. As we have heard already we have already created 80000 new jobs in the last 12 months and part of that is to do with the removing of bureaucracy as we have it.In the Finance and Expenditure Committee today an example of that was given. The Inland Revenue Department has gone out and has been consulting with communities. It has got good feedback and new ideas of ways to further reduce bureaucracy. A simple example is the GST double click with a nil return and you are done. The Rules Reduction Taskforce is out and about. That is focused more on compliance issues and red tape relating to councils. Again the National Party is leading the way.Grant Robertson suggested that this amendment bill is actually quite complicated and is adding further to the complication and to the compliance regime that is out there. I can tell him that it is not. It actually encourages research and development. It removes a bit of an impediment if you like for small businesses to conduct research and development. By way of research and development this Government is investing $750 million in the Primary Growth Partnership alongside industry. That research that investment into 20 projects relating to meat wool dairy fishing bees forestry viticulture and horticulture is targeting an increase in GDP of between $5 billion and $10 billion. That is the sort of outcome we want to achieve from increased and improved research and development.I will give you a little example of what this bill can achieve. The first part of this bill is about the cashing-out of research and development tax losses. That relates to and supports small businesses in the following way. In the current situation you have got large businesses that are making revenue streams and they go out and conduct some research. They can earn say $100 of taxable income and then they decide to invest $100 in research and development. The current law says that their taxable income nets out and there is no tax to pay no refund to receive. But if you can split those two $100 amounts into a positive into two separate businesses you will note that if it was only $100 revenue that company would pay away $28 in tax. If then on the other side of the income statement there is a $100 loss effectively that large business has been able to get that $28 back into the business creating a nil taxable cash flow. That is what happens today with large businesses that are earning income streams.For a small guy it is not the case. He does not have any income streams. He has just got an idea. He has got a dream to be able to create something new something that is going to earn him an income something that he can create to export sell off whatever it might be. But of course that is going to be a negative cash flow for a day a week a month or several years. He or she is going to get cash from their own pocket and they will go to their family and friends and then will go to the wider community. As an aside this Government has now introduced peer-to-peer lending as a way of that person accessing the capital markets and also crowd-funding legislation which again gives that individual that small-business man access to capital markets. Then of course we have the secondary and primary stock exchanges in New Zealand.So already the small-business man is better off under this Government because of the legislation we have passed that gives him access to that capital market which is really important because we know that capital is a must is essential to growing our businesses to growing our economy. That is why I find it really odd that the Opposition or any party would propose a capital gains tax. A capital gains tax does exactly the opposite. It discourages people from investing capital. The proposal from the Opposition only encourages people to buy Auckland houses which is of course an exemption under its capital gains policy. So there is an inconsistency on the other side of the House which sort of goes without saying. I mean Labour is not sure whether it is supporting itscandidate in Northland or Winston Peters. It is still quite confused and I really do not believe that most of those people across the House support a capital gains tax. I really do not believe they can support a capital gains tax.Let me get back to the small-business man who is still at a disadvantage in the case where he takes $100 from his own pocket—