Companies (Levies) Amendment Bill

Good morning, everyone. When the House finished last night, we were on the second reading of the Companies (Levies) Amendment Bill.

Mōrena, Mr Speaker. I’ll keep this really short. I don’t understand why the Opposition is making a brouha over something that is a rationalisation of—[Interruption]—a brouha—

Hon Member: A brouhaha.

INGRID LEARY: —a fuss—a system that is already in place. Basically, the primary legislation and the fees that have come as a result of it, there’s a mismatch, and they need to be lawful. This system works, and it’s really looking at efficiency of the system rather than something that requires a big policy analysis to say, “Are there other systems that should be in place?”

So it’s really just about rationalising what’s already happening, and it’s a great bill and I think we need to just move on. So, with those words, I commend it to the House.

Thank you, Mr Speaker. I will also be taking a short call on this bill. The Companies (Levies) Amendment Bill is a common-sense bill that wants to gather some other changes that have been done to, effectively, create a new regulation-making power that will enable regulators to impose levies, and certain users of the register administered by the New Zealand Companies Office. Pretty straightforward.

I want to commend the Finance and Expenditure Committee for the work that they have done on scrutinising this bill and coming through with some proposed amendments that were accepted unanimously. Some of these amendments include reclassifying the regulations as “confirmable instruments”, clarify that future levies can be combined in one payment, strengthening consultation provisions, and a statutory review of the levy system.

I note that there were only three, I believe, written submissions for this bill at the committee. We often hear from people opposing the legislation, and, when there’s something controversial, we get a lot of submissions trying to either improve or oppose it. I think that the fact that there was a bit of a low-level interest in this bill just shows that it is a common-sense bill. We commend this bill to the House.

Thank you, Mr Speaker. The Companies (Levies) Amendment Bill will be supported by ACT at the second reading. It amends the Companies Act 1993; it actually covers across 15 Acts and tries to clean up 16 registers.

But honesty’s required here: there is a funding shortfall, and the cost of upgrading these systems and registries needs to have a slightly changed model, which includes levies, and that is something which is a move on from just charging fees.

The bill itself does help to recover costs—not excessive costs—and it affects companies in the sense that they will have to pay, and protects incorporated societies from overinflated costs; i.e., they will be actually subsidised to participate on the registers themselves.

There were several changes at the select committee, which made sense. So the technical amendments do add some modernisation to the levy-making powers. We believe that it’s time to clean it up and we don’t have any administrative arguments with that. The important thing is it’s reviewed as a confirmable instrument over the next five years and ACT will be supporting this bill at this reading. Thank you.

Thank you, Mr Speaker, and can I start by acknowledging the Finance and Expenditure Committee for their work on this particular bill and my colleagues who are a strong team speaking in this bill this morning with less brouha—I think that’s our word for the day, brouha; we’ll continue that through.

The New Zealand Companies Office administers the corporate registry system of 16 registers and supports other statutory functions of its registrars, and this amendment bill amends the Companies Act 1993 to create a new regulation-making power that really makes the system a lot fairer. We don’t need to traverse this bill too much this morning. I think there’s some very good work that has been done by my colleagues on this, so the brouha can be minimised this morning, and we can get on with the mahi. I commend this bill to the House.

The Hon Todd McClay—it’s a five-minute call.

Mr Speaker, thank you. So early on a Wednesday morning when the House is not meeting in committee but is here to do what the Government says is important business that we have to set aside the work of committees to get on with, I don’t think we should suggest “Let’s rush through this to get rid of some of the brouhaha.”, as the last speaker, Shanan Halbert, said.

National is opposing this legislation, not because we don’t think those who receive a service should pay for it, but in this instance that’s not what the Government is doing. What the Government is doing is saying, “We’ll collect money whenever we want from anybody that’s involved with the companies register, and then get that used any other way.”, and what that means is that there are likely to be some people that pay for a service, but, actually, the fee that they pay isn’t used for that service and it’s used somewhere else. In essence, in a way, that could be seen to be subsidising others at the best, but at worst it comes to having a lazy Government.

When originally the legislation was put through the House to fix an issue because the companies house or the register was charging fees without the legal ability to do so, National supported that. However, this wasn’t looked at at the time and the Government didn’t make those changes then, and it’s now revisiting giving the ability, again, to officials to make rules or laws or decisions through regulation—without the oversight of this House—to collect fees and then use that in ways other than what the fee was used for.

To give you an example, the Government announced a short while ago that it wanted to increase the significant cost of clearing the border in New Zealand. When somebody arrives in New Zealand or leaves New Zealand, a fee is charged as part of, I suppose, the ticket to come in or come out, and that money is used directly and on a cost recovery basis just for the cost of running that service at the border. Well, in this case, this isn’t cost recovery. This is “Collect some money, use it however we want to within companies house.”, and, to give the same analogy at the border, it’s a little bit like saying, “Well, we’re going to collect some money from Australians who are coming to New Zealand as they go through the border, because there’s a cost of running that service of customs and immigration at the border, but we’re going to collect from them more than probably we need to, based on the service we provide to them, and we’re going to use it for something else.” I don’t know of anything we want, including “Let’s move it over to use for the companies register.”

We won’t be supporting this, because we don’t think it’s fair and we don’t think it’s proportionate. It is the case that people who register a company and who have access to the companies register must pay a fee as part of the cost of the service they’re provided with, but that’s not what this bill or this legislation is doing. It’s saying that an official, through regulation, can decide what the fee is and what it is used for, and it can be nothing to do with why the person is actually paying the money in the first place.

So this isn’t brouhaha. This is about charging hard-working New Zealanders a fee—it’s a type of tax, I suppose. We know that the Labour Government loves new taxes, and in this case they’re saying, “It’s not enough just to say that we’re going to collect this tax based on the proportionality of user-pays. What we’re going to do is collect this tax and use it however we want.” So it’s the user paying for things for which they receive no service for at all. It’s not good legislation, it’s not something that we can support, and we won’t be voting for it.

Kia ora e te Mana Whakawā. I see the Māori Party’s chosen not to take its call, so I’ll just make a couple of brief comments in response to the member, who doesn’t seem to understand what fees and levies really are all about. It’s not like going to the shop and purchasing something off the shelf. The Companies Office manages a number of registers. This is simply a tidy-up so that the law—which, across multiple Governments, has been erroneously applied—is tidied up to make it clear that the fees and levies charge can be used to fund across the various registries that are administered. A sensible piece of legislation—surprised the National Party once again is standing in the way of sensible progress.

I was on the select committee that considered this bill, the Finance and Expenditure Committee, and I’m fully supportive of it. Just to respond to the points made by the Opposition, there’s a five-year review on this bill. People did that because they were mindful of the issue about making sure that fees were reasonable. There’s also a consultation being recommended over those fees. But, basically, what I would say to the New Zealand public is I remember being a search clerk many years ago and it was a very laborious and expensive process for everyone. We’ve come a long way. This is about a modern bill, and, actually, if the Labour Party stands for modernising this area and the National Party doesn’t, well, I think the New Zealand public will draw its own conclusions. I commend this bill to the House.

Thank you very much, Mr Speaker. I welcome the opportunity to add to the brouhaha—and I note all the syllables in that as rightly expressed and fully expressed by the Hon Todd McClay. I mean, I know the Government is taking very short calls this morning but I thought, you know, whacking a syllable off the end is unnecessarily tight.

So the member who’s just resumed her seat, Helen White, has talked about the New Zealand public being able to form its own conclusions. I mean, one of the things that we say on this side of the House is that the Government is taxing far too much and spending far too much, but at least with taxation proper they come to the House of Parliament and, at least nominally, go through a process—you know, the Budget process and there’s tax legislation. But of course, the point about regulations and levies in this case, and we’ll get into the detail of what actually a levy is, at least to some extent, for the benefit of members of the Regulations Review Committee who I know will be—

Hon Member: Hey!

CHRIS PENK: There we go, a shout out to the Regulations Review Committee. And I note that the deputy chair of it is here today and I hope she doesn’t disagree with the points that I have to make. But anyway, that’s her lookout, or so I suppose.

Anyway, so tax is fine as far as it goes. I mean, obviously we say it’s a necessary evil and, you know, a certain amount is required obviously to run the country. And yes, it is necessary to have a certain amount of it—and to be fair, parties of the left no doubt would say much the same thing in principle, albeit that they would draw the line in a different place about the extent of taxation. Of course, we can argue and differ over where taxes should be raised, how they should be raised, and certainly how they should be spent. But of course, the point about tax, as I’ve said already before, in that more particular sense of the phrase is that it’s a duty of Parliament or a right of Parliament to agree or not agree to the plans of the executive to raise taxes. So they have to come here and it’s appropriate that appropriations take place through this House; we call them Votes in the Budget and so forth. However, in the case of a kind of taxation or at least a kind of raising of revenue, that’s not technically taxation, but it’s levying that’s imposed on the people of New Zealand, maybe particular users of a service and so forth by regulation—and of course that means it’s the Government of the day, it’s Ministers, it’s Government agencies, it’s technically the Governor-General—bless her heart.

By the way, while I’m on the subject briefly, Mr Speaker, if you’ll indulge me for a moment, it was nice to see Her Excellency launch a book on the constitution of New Zealand yesterday. Anyway, I feel bad that not all members of the House were able to get to that for reasons that we won’t sort of dwell on, but that was unfortunate because it was a really interesting book launch. Justice Matthew Palmer and Dr Dean Knight put forward a really good contribution to the discussion in New Zealand about our constitution. I haven’t had the chance to read it; it was only last night, but no doubt there would have been something about the way that Parliament, as opposed to the Government of the day, raises taxes and levies and so on.

So, in relation to this bill, it’s really important to note that the kind of revenue raising is being done without reference to Parliament, is being done without reference to the House of Representatives, and that’s fine as far as it goes. Again, we delegate our authority in this House to Government agencies to raise money that they need for particular purposes. And that’s the key. It’s the particular purpose for which the money is to be raised or levied upon the uses of those services, and that’s the basis on which the money should then be spent. So when we have this raising of revenue for the use of one service but applied to another purpose, another bucket of money—I suppose in accounting terms, not that I’ve used the technical term, but you know what I mean—then it’s a problem actually. And it’s precisely because it was a problem that this practice had taken place over a number of years that a bill in the nature of a tidy-up already came to the House, already was passed, and yes, National supported that. So Dr Duncan Webb is right to characterise the situation as a tidy-up in some sense, but that’s the bit that’s already taken place, that’s the retrospective validation of the thing that had already happened in the past. But this is now a conscious policy decision by this Government to say that it’s OK to levy funds for one particular purpose and apply them to another—and that’s just actually constitutionally not very sound.

We say that the cross subsidisation, to use the phrase aptly employed by my colleague and friend, the Hon Todd McClay, isn’t appropriate. And so, naturally, we resist this; “naturally”, we say, this is a step in a direction that the country should not be taking. We know it’s not fair, frankly, that people would be paying money, you know, for one particular purpose—the context is the Companies Act and, of course, there are lots of different types of entities that have different registers, so just again, without harping on to belabour the point too much, these are different purposes, these are different entities and these are different registers. And so we say, let’s keep it clean. Levy the funds for that which is needed, don’t levy—

Hon Dr David Clark: They love their red tape over there. They love their red tape.

CHRIS PENK: Oh-ho! We have the Hon David Clark saying that we love red tape. Well, all I can say is there’s less red tape in our approach to this than in the Credit Contracts and Consumer Finance Act regulations as ushered in by that Minister. Goodness me, I’m very surprised that he has the gall to raise the subject of red tape in this House in connection with regulations. But anyway, that’s for him to answer, not me. It’s beyond the scope of the bill so I won’t go any further except to emphasise again: we can’t and won’t support this bill.

Thank you, Mr Speaker. Look, this bill is about efficiency. I think that one of the things that I continually hear from the Opposition is them complaining about the reason to complain. This bill is just about getting on with the business. And every time I get to stand up and talk about business, I frankly wonder what sort of businesses that the Opposition even think about. For a company, what this means is efficiency and getting it done, on time, and if this can help that—remembering that this was a request of the Government, to come in and make this simple efficiency, to make it all better for us to get our companies registered on time and more efficient. So on that, I commend, as a final speaker, the second reading to the House.