Nash Stuart: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 10 February 2016. Volume:711;Page:8887. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): There are a couple of points that I just want to reiterate but not in any great way shape or form. As mentioned clause 230 which inserts new section 70C requires someone who is filing for a research and development tax loss to do so by electronic means. I suppose the point I was just about to make is that I suspect you can make an assumption that those who are applying for research and development tax losses are involved in the sort of industry or have the means of communication that allows them to do it electronically. I suppose the point I just want to make is that we do run a very slight risk of diminishing the integrity of the tax system a little bit if we are so prescriptive that we say it must be done by electronic means and do not allow a taxpayer to do it by paper means if required. For example in clause 232 which inserts new section 80KV—this is a replacement in the Tax Administration Act; it is about calculating family support—there is no requirement there either way to do it electronically or by paper. Therefore the assumption is that it can be done in any way shape or form. So like I said we had to be careful about making it too prescriptive.I would also like to talk about clause 232B which is making an insertion after section 81(4)(u) of the Tax Administration Act. We debated this quite a bit at the Finance and Expenditure Committee because what this is talking about is how research and development proprietary information is communicated in such a way that the Inland Revenue Department (IRD) is certain that it is available for a tax credit. The thing that we raised and we discussed quite a lot here—the Government members will remember this and they may have their own views. The concern that we raised—and I do remember the member Mr Bayly in particular was quite vocal about this—is that what we are dealing with in this country is sometimes very innovative and proprietary technology. We want to get the research and development tax credit. But the thing that really concerned the committee was—the “lack of trust” is the wrong term but we were concerned that what would happen is that innovative companies would not apply for this research and development tax credit because they were unsure that the integrity of the process was total.For instance if you were telling someone at Callaghan Innovation and—let me quote this from new section 81(4)(v)—“communicating to an officer employee or agent of Callaghan Innovation information for the purpose of administrating [this Act]” and Callaghan Innovation was the organisation put forward by the IRD that would determine whether the organisation was able to draw down a research and development tax credit we were concerned that there is the possibility that the integrity of the process might be compromised. So I just wanted to note that. In the end we obviously left it in the bill—there was a consensus in the end—but we just need to be a little bit careful.The other thing also is that new section 81(4)(w) says: “communicating to an officer employee or agent of the department that is with the authority of the Prime Minister for the time being responsible for the administration of the Research Science and Technology Act …”. It is a little bit clumsy—I mean all it says is that we are going to do this for a little bit and then we are going to change it. It is not an ideal way to do tax legislation considering that one of the fundamental tenets of tax legislation is that it is easy to administer it is easy to understand and there are no fish-hooks. That just signifies that even though we are encoding this in new legislation in fact it is probably not going to be there for a long time if it says “in the time being”.There are a couple of other sections that I would like to talk about. One is amendments to the Income Tax Act 2004. If you look at clause 260 there is going to be an insertion of new section CC 5 “Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014”. I am assuming that the vast majority of electorate MPs and probably a number of list MPs have received delegations of constituents from countries that have superannuation schemes that are in fact a lot more generous than ours. The New Zealand Government grabs them as part of the process and the constituents—often they are Dutch actually. Dutch and Irish—that is what I have found. Anyway they seem to be disadvantaged because the Government gets a hell of a lot of money from their superannuation scheme and then gives them the amount of money from our pension scheme and the Government seems to be winning.It is a point of contention. I remember speaking to the Hon Michael Cullen about this—Grant Robertson: Name-dropper.STUART NASH: Sorry—well he lived in Napier. Not many people know that when Michael Cullen was the Deputy Prime Minister and the Minister of Finance he lived in Napier the whole time. It is why Napier has absolutely flourished and come back to Labour. But anyway I asked Michael: “Is this”—