Tremain Chris: Taxation (Business Tax Measures) Bill — In Committee 
Tremain Chris: Taxation (Business Tax Measures) Bill — In Committee 
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CHRIS TREMAIN (National—Napier) 
: 
 I rise in the Committee stage to follow previous speakers in supporting the Taxation (Business Tax Measures) Bill. Everyone has talked about how there has been a bipartisan approach to this bill tonight. We have seen the Greens supporting that and certainly the two Labour speakers supported the bill. They supported it in the way that they have supported the majority of legislation that the National Government has brought to this House throughout the 4 or 5 months that we have been in Government. Members of the public will be interested to see that lots of legislation is being brought to the House and that Labour members are standing up to say that really they do not support it but then they vote for it. With this particular bill it is good to see it go through the House in a bipartisan way. 
The Labour speakers who spoke before the chair of the Finance and Expenditure Committee Craig Foss took time to say that many of the initiatives of the bill were fostered in processes prior to the National Government. A point I make is that there is a saying that goes something along the lines of “Between the idea and the action lies the shadow.” which basically says that there are lots of people who have ideas in this world but it is those who step up to the plate and deliver them who actually make a difference. I think that is what we are seeing with the National Government here. It is almost like the Jeffrey Archer story about Mallory conquering Mount Everest first. Actually he did not. It was Sir Edmund Hillary who got to the top and down again and who delivered on that particular conquest. 
In this bill we are stepping up and delivering a range of initiatives. Labour members go to lengths to say that it is not big enough wide enough or as big as it should be. The Greens said that it was a modest package of initiatives. In fact it has been clearly noted that we are in the top five countries in terms of the fiscal stimulus that we are bringing to the table with a combination of packages brought through both by the previous Government and by our own. The reality is that we are in a good space. That was acknowledged in two recent pieces of literature. Firstly in the Monetary Policy Statement by Alan Bollard that came out just 2 weeks ago Dr Bollard acknowledged that our fiscal stimulus put us in a good position. He predicted that in the fourth quarter we will commence growth again. In just the last couple of days a report by the people from the International Monetary Fund who visited New Zealand acknowledged that again we are in a good space and that there is not a huge need for the wild amount of other initiatives that members opposite are proposing. 
It is good that we are here today delivering on a number of initiatives that will help small businesses out there. Those initiatives are in the Taxation (Business Tax Measures) Bill which I have before me—a range of initiatives that get to the heart of what we are trying to do to blunt the edge of the recession for small and medium sized enterprises and to put them in the best position to grow as we come out of this recession. In making these initiatives we need to acknowledge that those enterprises make up 95 percent of businesses in this country and that they employ some 80 percent of employees. They are critical to the engine of this nation in terms of driving us forward. Let us look at the initiatives that we see throughout Part 1. In clause 4 the threshold where businesses with business-related legal expenditure can claim legal expenses through their tax return is increased to $10000 reducing compliance costs around legal expenses for small businesses. 
In clause 15 the PAYE once-a-month filing and payment threshold is raised from $100000 to $500000 again reducing those compliance costs for small and medium sized enterprises. Let us focus on the PAYE provisions. These small businesses are the heart of our economy. They are the businesses that employ the majority of our employees in this economy. If we are to get through this recession and out the other side we need to protect those jobs. We need to look after the engine that actually employs those people in the first place and that is small businesses. This bill focuses on those small businesses and makes sure they will get through. 
In fact Craig Foss the committee chairman and I were with RCR Energy Systems a Hastings company that employs about 78 people down in Dannevirke and about 50-odd in Hastings. This is an innovative company that employs a range of fitters and turners and boiler-makers to produce high-end energy turbines and boilers for plants all around the country and throughout Australasia. It has a highly specialised workforce in Hawke’s Bay and it is focused on getting through the recession and ensuring that its highly specialised workforce is maintained. If RCR is forced into a position where it has to lay off specialised designers and those sorts of people the reality is that it will be very difficult to obtain those people when that firm is gearing up to come out of the recession afterwards once it starts to get more orders on the book again. A couple of designers are from Indonesia and a couple are from Australia. What we are trying to do with this bill is to blunt the edge of the recession for companies like RCR in Hawke’s Bay and to make it easier for them to get through this recession. They will still be faced with challenges. I am not standing here and saying it will be easy. In fact it is very hard. Orders have slowed significantly for them. But these small steps might just make it that little bit easier putting them in a position to retain their workforces and to come out the other side. 
I will touch on another couple of clauses. Clause 19 focuses on fringe benefit tax lifting the threshold from $100000 to $500000. Again this reduces compliance costs for businesses that are under that level making it necessary to file fringe benefit tax returns above that $500000 threshold only on a quarterly basis with businesses below that threshold allowed to file those returns on an annual basis. 
There are other initiatives in clause 26 which raises the GST payment threshold from $1.3 million to $2 million. That is a really important point. It allows businesses to continue to pay GST on a cash basis as opposed to an invoice basis. That is really important for small businesses because if a business pays GST on an invoice basis it often has to pay the GST to the Inland Revenue Department before it has collected the money through the debtor’s ledger. In terms of cash flow it is a huge impost on those small businesses. They do not have huge amounts of capital or big balance sheets that can afford to have that cash out in terms of GST before it is collected. Section 26 lists that threshold and is one of the key features of the bill. 
The bill has a range of initiatives and once again is looking to make things easier for small to medium sized enterprises and businesses to get through this recession and to put them in the best possible position as we come out of the recession and begin growing as a nation again. I commend Part 1 to the Committee. Thank you.