Parata Hekia: Taxation (Business Tax Measures) Bill — Second Reading 
Parata Hekia: Taxation (Business Tax Measures) Bill — Second Reading 
[Volume:652;Page:1952] 
HEKIA PARATA (National) 
: 
Tena koe e te Mana Whakahaere huri noa i to tatou Whare tena koutou katoa. 
[ 
Greetings to you Mr Deputy Speaker and to you throughout our House greetings to you all. 
]  
I am pleased to stand in support of this Taxation (Business Tax Measures) Bill. I am delighted that it has cross-party support despite the Opposition damning it with faint praise. That seems to suggest little understanding of how meaningful how practical and how responsive this suite of measures is to people who are engaged in small to medium sized enterprises. Nevertheless I am pleased to know that the bill enjoys cross-party support because the sooner that we can get it passed and apply it the sooner that small to medium sized enterprises will be able to experience the relief intended by this legislation. 
The bill has specific measures to assist small to medium sized enterprises which are the bulk of business participants across the New Zealand economy. These people invest their own money their own time and their own creativity into making a success of their particular enterprise. These people lie awake at night and decide whether they can afford to upgrade their information and communications technology. These people have to decide whether they can continue to employ the people they have on their payroll. These people have to decide whether they need to downgrade the amount of space of the business area they occupy. These people have to make courageous decisions every day about whether to continue to invest for their future. These are the people for whom this technical albeit modest suite of measures will go a significant way towards lifting the burden of compliance and allowing a greater cash flow to remain within their businesses. Having been a small-business owner myself and having wrestled with these very issues I stand in support of this bill so that others who are engaged in this type of business can feel this relief. 
The bill contributes to National’s overall jobs and growth plan. It is not to be read in isolation although as I have said within and of itself it offers significant assistance to small and medium sized businesses. It is but one part of an overall comprehensive approach that this National-led Government is taking to the challenges that face us. In meeting these challenges we have two main objectives. The first is to soften the edges of the recession and the way that New Zealanders are experiencing it and the second is to prepare our economy for recovery. Although we have inherited the legacy of being the first in the developed world to go into a recession we would like to work very hard to be the first in the Western World to go into a recovery. This bill is part of the measures that we think will assist across the economy to restore confidence to give greater certainty and to assist small to medium sized business owners to continue with their plans confidently to retain their employees and to continue with their everyday operational realities. 
This bill is about achieving balance as is so much of what this National-led Government is focused on. It is about achieving balance between leaving as much cash flow as possible in businesses and simplifying the compliance regime they must attend to while at the same time maintaining the tax base that we rely on to continue to offer the services that this National-led Government is committed to offering. 
So what are these measures? I do not propose to rehearse all of them but I do wish to speak about one in particular which as a previous small-business owner I was constantly alert to providing for—that is the 5 percent uplift rate that businesses pay on provisional tax instalments. As we all know in a successive year business people base their tax provisions on what they paid the previous year and add 5 percent. The supposition of course is that they are improving their business growth each year. But we are in a recession. We know that there are many challenges to our economy and we know that it is very unlikely that many businesses will be looking forward to a 5 percent increase on what they earned in the previous year. So the bill provides the ability to remove that provision for the 2008-2009 and the 2009-2010 tax years which means that there will be better tax cash flows for the next 2 years for small to medium sized enterprises. 
We also see within this bill the provision that business-related legal expenditure of $10000 or less will be able to be fully deducted. That is a very great leap forward for a number of small businesses because when they retain legal advice they fully understand that those giving the legal advice are also in business and need to meet their expenses. But legal expenditure has been a particularly onerous expense for small to medium sized enterprises and the opportunity for it to be deductible will be greeted with great relief by many small businesses around the country. Similarly the PAYE requirements—whereby payments will be filed once a month instead of twice a month and the payment threshold will move from $100000 to $500000—will allow more employers to file fewer PAYE returns. Again these requirements have been very onerous but necessary for small to medium sized enterprises and the changes are ones that will be and are being greeted by many businesses around the country with great relief. 
National is committed to making it easier for small and medium sized companies to operate their businesses effectively; this package of relief measures is aimed at doing that. It recognises that there are no silver bullets to all the challenges that face us in this time of economic recession but that it is one way of contributing to those businesses that form the bulk of the New Zealand economy in order to simplify their tax compliance regimes while also leaving cash flow within their businesses. I have had significant feedback from business people around the country who do not minimise the contributions that these measures will make to their businesses. The Opposition has described the measures as modest and technical but it has nevertheless said that it will support them. However others around the country who are engaged every day in these businesses see these measures as opportunities to get their heads above water to conduct their business in a much more simplified way and to have that cash flow available to them so that with greater confidence and certainty they can continue to operate those businesses. 
This package of measures is what the National-led Government is committed to; it is part of an overall jobs and growth plan. It meets our dual objectives of softening the hard edges of the recession while also contributing to preparing our economy for recovery. I am delighted to support this bill and I commend it to the House. 
Heoi ano ra e te Mana Whakahaere o tenei Whare tena koe otira ki a tatou katoa nga mihi nui. 
[ 
So greetings to you once again Mr Deputy Speaker of this House and much greeting to us all 
.] 
Bill read a second time.