Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): Unlike the previous speaker Melissa Lee I was in that select committee meeting so I know exactly what happened in respect to the National Party minority view. With respect the Government side of the House was entirely prepared to accept the minority view. Why would we not? It is important for minority views to be heard. In fact in the last few days I know there has been a discussion amongst members of this House as to how a minority view should be treated and some agreements have been reached.But there was an issue with the minority view that was prepared. There was a factual mistake in it that was attributed to officials. That was the sticking point. We asked for that particular sentence—one sentence—to be modified. In fact one person had written that sentence and even that person's own colleagues were urging that a change be made. The intransigence was not on this side of the House.I think it highlighted a very very important point in respect to this particular bill. It is a research and development bill but in particular it is a research and development tax credit bill. What that pointed out was the need for those who engaged in real debate on it to be familiar with the tax system as well as with the ideas behind science and research and development. There are critical interactions with the tax system engaged in this particular R & D measure. So in terms of understanding how it is intended to work and understanding what the real facts of the matter are having that background knowledge of tax makes a difference.So I want to talk about some of those particular issues. We have heard on the other side of the House some of the members there complaining that a tax credit won't work for companies who are not in profit and how that's going to be a problem for start-ups. But as anyone who is familiar with tax would know there is a provision in the bill—in the very bill itself—that enables a cash-out of credits for start-up companies who are in a loss position provided they meet certain criteria. I direct members on the opposite side of the House to new section LA 5(4B) inserted into the Income Tax Act 2007 by clause 9 in this bill—which some members obviously need some familiarity with—and that provides for a cash-out of some of the credits to help exactly those companies who are engaged in R & D and need to get a bit of a hand on their way right from the start. It helps to know what you're talking about sometimes.Carrying on I want to talk about some of the technical tax matters that are in this bill that help someone. As a select committee we have worked hard on the issues in this bill and amongst others things in clause 10 we have inserted new subparts LY 8 LY 5 and LY 6 into the Income Tax Act where it allows our R & D tax credits to be carried forward in cases where some shareholder continuity rules may or may not be met. Now the shareholder continuity rules for carrying forward losses are quite complicated but what we're doing here is trying to ensure that the tax credits fit within those rules so that it maximises the amount of R & D tax credits that can be carried forward.We also worked on other tax issues—again which helps when you've got tax knowledge. So for example we looked at the interaction of this new research and development tax credit with the Callaghan growth grant recipients and how that would fit together and some anomalies were pointed out. One in particular was to do with people with firms that happened to have a late balance date. Now again if you're familiar with tax—as you need to be to engage with this properly—you'll know that balance dates vary and they're defined as early or late balance dates in relation to 31 March actually which is the standard balance date. Now if you've got that familiarity you know how the rules interact together and that means that you understand why we need this particular little change in the bill to ensure that Callaghan growth grant recipients who have a late balance date can get as much from this tax credit as Callaghan growth grant recipients who have an early balance date. It's about consistency and about getting it right within the structure of our tax system.So I think the question for the Opposition is—and it's a question they might care to examine in depth in the committee stage of this bill and a question they might like to have a look at in the third reading of this bill—do they support research and development or not? Do they support it or not? The Callaghan growth grants are a fine thing but we still need to lift our R & D spend in this country further and we need to broaden it beyond a grace and favour system.Having had a look at the Callaghan system it is complex it takes a lot of effort to comply with people go through long and extended processes in order to apply for a grant and even then they may be refused. That's the way that grant systems operate and indeed it's the way they ought to operate; there should be strict criteria. The useful thing about a research and development tax credit is that it is available to all taxpayers who meet the criteria not just to those who fit within a certain envelope—all taxpayers who fit the criteria. It means that anyone who is doing significant research and development may apply for and get this tax credit instead of a handful or a selected few. That's the beauty of it and that is why this particular research and development tax credit will in fact work to enhance research and develop innovation in our country. I support this bill.