Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): Thank you Madam Assistant Speaker. It gives me great delight to stand and speak on a tax measure. Actually I've been thinking about a brilliantly innovative company in Avondale in my electorate of New Lynn—the Smart Hot Water Company. They do some amazing things with hot water cylinders and layers and convection currents to enable people to manage their hot water cylinders very efficiently and effectively. It shows real ingenuity and thoughtfulness. They're doing some incredible work right at the moment with solar panels and heaters. I don't think it's public news yet so I won't take it all that much further. What this makes me think is just—you know they're doing a great job but there is real ingenuity and real knowledge amongst New Zealanders about how to do some of this great research and development and wouldn't it be great if we could do more? And we know we need to do more so that's why I support this particular measure. It's about upping our R & D and about trying to get some stuff right for our economy. But as previous speakers have noted there is a need to get some of the technical details of a tax credit right. There's the ongoing issue of grants versus R & D—research and development—tax credits and as my colleague Ms Swarbrick noted it's about giving everyone an opportunity to access Government support for research and development instead of picking winners. But that's a debate we can have in I hope the Finance and Expenditure Committee. I'm certainly looking forward to it. The bill as presented does have a definition of what this research and development is going to look like. It's an interesting one and I know it's been developed throughout consultation but I'm looking forward to debating that particular section: it's a new section LY2 set out in clause 10 that will go into the Income Tax Act. But what I especially want to address is the issue of supporting start-ups. Now the previous National Government introduced a very interesting measure whereby companies which were engaging in research and development could get refundable tax losses. Now this is interesting because normally when you make a tax loss you don't get any money back on it. You can carry the tax loss forward and set it off against future profits. But for some types of R & D instead of having to carry that tax loss forward you could actually get some cash back straight away and this was explicitly designed to help start-ups. Now there is a measure in this bill to assist start-ups. In fact these tax credits will be refundable tax credits so that means that for certain small companies up to a certain value you will be able to get actual money back on the R & D that you've done. Now that's a very useful measure and I hope Mr Yule that addresses some of the concerns that have been raised this afternoon. I think Mr Yule and Mr Bayly both raised this concern. There is a measure in this bill that will help with this. I want to know what the relationship between that measure and the refundable tax losses will be because they both cover a bit of the same ground so I think that's one of the issues that we will discuss in depth in the select committee. I think one of the other issues that has been raised I think by Mr Bayly and I think by Mr Yule was around issues to do with rorting and the possibility of people rorting these really quite generous measures—it's a good concern to raise. It's interesting because clearly the people who have designed this particular set of legislation and have drafted it have thought of that issue already and clause 7 of this bill introduces a new section into the Income Tax Act section GB 56 and that's about arrangements to avoid tax liability. So there is a sort of a catch-all measure in there but like other members who have spoken this afternoon I do want to have a look at those schedules and have a little think about what ways that clever accountants—because people have noted that accountants are clever—can get around this particular measure and you know it's worth having a good think about a good examine. I'm looking forward to doing it in the select committee remembering always that the objective here is to promote research and development and to promote more R & D in our economy. And for that reason Madam Assistant Speaker I commend this bill to the House.