Regulatory Reform Bill, Regulatory Reform (Repeals) Bill

I move, That the Regulatory Reform Bill and the Regulatory Reform (Repeals) Bill be now read a second time. Both bills form a key part of this Government’s commitment to better and less regulation; better and less regulation for business—the lifeblood of the New Zealand economy—for those who create the wealth, from the farmers, to the manufacturers, to the retailers, and for the people who go out and commit their money, take the risks, produce the jobs, and pay the taxes.

As an aside, I would note, as the ACT MP for Epsom, these bills dovetail nicely with the concepts, philosophies, and principles of the ACT Party. These are the concepts of less regulation, smaller government, and free enterprise. Before we can spend, we first have to sell, and ACT believes that a more prosperous New Zealand will be one that unleashes business from unnecessary and unwanted regulation by the Government.

As Minister I would like to acknowledge the work of the previous Minister for Regulatory Reform in getting these bills to this stage. His commitment to improving our regulatory environment is seen in these bills. I would also like to thank the Commerce Committee and all those who made oral and written submissions on the Regulatory Reform Bill.

The committee’s report includes some sensible recommendations to further reduce compliance costs for business. My role in life here in this ministry and coalition is to further reduce compliance costs for business. This Government is a Government for small business, for the 420,000 business people up and down the country who employ fewer than five people. This Government is committed to addressing the barriers, big or small, that hold back New Zealand businesses from reaching their fullest potential. The challenging economic environment makes reducing compliance costs more important than ever.

I know that the people of Epsom will be very happy to see what their local MP is doing in his role as Minister for Regulatory Reform to get the Government off their backs and out of their pockets. And if this crowd opposite was in charge, it would not be getting off their backs and out of their pockets; it would be heavier on their backs and deeper into their pockets as it borrowed more and spent more money that it had not produced.

The Regulatory Reform Bill improves the quality of regulation in New Zealand. It recommends small but important amendments to 13 Acts to reduce the regulatory burden on business. It reduces those 13 Acts, which produce regulatory impediments to the spirit of free enterprise and the people who create the wealth across this country. The bill was introduced under the former Standing Order 259(a), as the amendments can be regarded as implementing a single broad policy. The Regulatory Reform (Repeals) Bill repeals—listen to this—31 unnecessary and spent Acts of Parliament on the statute book tonight. This bill was introduced under the former Standing Order 259(b), as the amendments are of a similar nature to each other.

I endorse the Commerce Committee’s commitment to canvass a number of options to ensure that the progress of these bills is as efficient as possible. I particularly want to acknowledge the efforts of the committee chair, the Hon Lianne Dalziel, to save this House time. It is not easy, but I do acknowledge her work and give her thanks and praise for helping out small businesses up and down this country, which say the Government is too heavy on their backs and too deep in their pockets.

It is pleasing that the Business Committee, which I am a member of, has agreed to my request that the bills be treated as cognate bills under Standing Order 266. The Commerce Committee also recommended that the Committee of the whole House stage be dispensed with for the Regulatory Reform (Repeals) Bill, and it is pleasing that the Business Committee also agreed with this request, and the bills can now be progressed very efficiently.

💬 Hon Lianne Dalziel: Must have had a very good chair.

Well, we are from the Government, we are here to help small business, and the people listening to this debate on their crystal sets up and down the country tonight will be pleased that a businessman is the Minister for Small Business.

I turn now to the Regulatory Reform Bill. Most submitters were supportive of the Regulatory Reform Bill, and the Commerce Committee has not recommended any substantive changes. How good is that? I would like to focus on the most significant issues addressed by the committee. The committee recommended changes to the amendments to the Agricultural Compounds and Veterinary Medicines Act 1997. My colleague from Epsom knows that Act, as he knows the Animal Products Act 1999 and the Wine Act 2003, and he wants less regulation in business, less red tape, less difficulties, and less Government interference. That is what my colleague from Epsom—my mate from Epsom—recommends as well.

The committee has recommended changes to the amendments to the Companies Act 1993, clarifying that companies may send—listen to this; as if we would have to do this—hard-copy materials, as well as electronic material, for communications, meetings, and voting. The Government was involved in that. As if it is the Government’s business as to where and how companies can send electronic material for communications.

The committee also recommends changes to clarify that a shareholder may appoint more than one proxy for a meeting, as long as there is only one proxy exercised for any particular share. The committee recommended changes to clause 50, which enables regulation to impose time frames on concessions processing under Part 3B of the Conservation Act 1987. This change will allow for the rolling on of expired concessions where an application has been made for a new concession. It is amazing that we even have to do that. Why would that have been put in the statute in the first place, so that it needs to be changed by the Minister for Regulatory Reform in circa 2012? But I am glad I am doing it, and I am glad the House—and this side of the House—supports it, as, indeed, does the other side of the House. It is very encouraging for small businesses up and down the country that the Labour Party would be supporting small-business enterprise up and down the country.

💬 Jami-Lee Ross: That’s new.

It is novel, but it is welcome. Small businesses up and down the country, which I represent from the powerhouse seat of the New Zealand electoral system, the Epsom electorate, say that they want less regulation and they want the Government to get off their backs, and that is what this about.

Submitters were mainly supportive of the changes to the Films, Videos, and Publications Classification Act 1993. One submitter sought a change to the commencement date, Part 5, to ensure that industry can gain benefits from the amendments as soon as possible, and the committee said that is not a bad idea. Lianne Dalziel said we can tick that off, and she has, and full marks for that. The Government is committed to ensuring that industry can take advantage of reduced compliance costs as swiftly as possible. As we come out of the second wave of the global recession, businesses need the Government to get off their backs and out of their pockets, and this bill does that.

Part 7 of the bill removes requirements under the Friendly Societies and Credit Unions Act 1982. I was in this Parliament when we debated that bill. We felt that the friendly societies and credit unions needed an Act of Parliament applying to credit unions, and now we are addressing those silly parts of that silly piece of legislation enacted so many years ago that are an impediment to small business. This National Party and ACT coalition, with its friends, believes in getting off the backs and out of the pockets of small business.

The committee recommended the removal of clause 113 of the bill. This clause amended section 20 of the Takeovers Act 1993 to add international comity as an objective to the Takeovers Code.

Now to the Regulatory Reform (Repeals) Bill. The final change recommended by the Commerce Committee that I will comment on is the inclusion of a new schedule 2 to the Regulatory Reform (Repeals) Bill. The schedule contains three additional regulations to be automatically revoked, as the Acts that they are made under would be repealed by this bill, and that makes sense, and people will welcome that. This is a great night for small business up and down the country.

The Labour Party will support this legislation—I want to make that very clear—given that the originator of this legislation, back when we were in power, was our then Minister of Commerce, Lianne Dalziel, who put this in place. Mr Banks’ predecessor, Mr Hide, came to this Parliament and gave a very similar speech, actually, to Mr Banks’, saying that this was going to be an earth-shattering reform. We support the concept of this legislation. It is a good process and a good concept. What we are going to highlight tonight are some of the absurdities. You would think that this legislation was going to change the constitutional business framework of this country, the way Mr Banks trumpeted it. Really, what it is, is lightweight content in a heavyweight process. It is lightweight content in Parliament.

If this is Mr Banks’ first salvo as the Minister for Small Business, small-business men and women on their so-called, to quote him, crystal sets will be hanging on every word tonight, I am sure, as they read through the 31 Acts that are a spent force and will be repealed by the Regulatory Reform (Repeals) Bill. I went and asked the Clerk, because I am not a lawyer, and I said to the Clerk: “Am I right? Does a spent Act mean basically it has been dealt with, it does not exist, it has no compliance cost, and it has no impact on anybody except Mr Banks and his sort of internal emotions?”. The answer was yes, it is basically like an Act that has been repealed. So the first great contribution from Mr Banks, as he came out of the political crypt and into this Parliament, has been to repeal 31 Acts that have no effect and no compliance costs on any small business, or on anyone. I should move that we have a minute’s silence in respect of Mr Banks’ great contribution. He is the man who came to this House and who, in his speech, talked about getting the hands out of the pockets of small-business people, getting off their backs, and stopping these grotesque spending and compliance costs.

I too am an ex - small-business person, and can I say that this is coming from the biggest spender in Parliament, other than Bill English, whose last claim to fame as Mayor of Auckland before they booted him out, was to treble the debt that Auckland City had with his spending, not including the debt that the new super-city took on. That was Mr Banks—“Hey, big spender”. So I just say to Mr Banks congratulations, what a great contribution to the Parliament it is to bring in really good legislation, a good process.

The Regulatory Reform Bill was called the Regulatory Improvement Bill, then Rodney Hide made an equally staggering, substantive contribution to this Parliament by changing its name from the Regulatory Improvement Bill to the Regulatory Reform Bill. I know that every small-business person around the country that Mr Banks represents will be getting their hands out of their pockets and putting their hands around the back into their back pocket, grabbing their wallet, and thanking Mr Banks from the bottom of their heart for changing that one word from “Improvement” to “Reform”. How much compliance cost will that save a small business? I imagine that it is millions of dollars, although I would have thought that the wording on some of the forms might have had to be changed.

But the great contribution—the first kick-off contribution—from the big spender from Auckland is to repeal 31 spent Acts that have no compliance costs, because they do not have any effect on anyone or anybody, or on any business in New Zealand. I say that this man deserves a knighthood. What a great contribution. He has made history in this place. The dinosaur has come back. It is Jurassic Park all over again. He has made history in this place by repealing 31 Acts that have no effect on anybody. Actually, this could be Yes, Minister all over again. Obviously he has read all the briefing papers the officials have put in front of him. The officials have convinced him: “Minister, this is your big day. This is your big hit. This is your penultimate hit. You have just been appointed Minister for Small Business. You can kick a goal for the people of New Zealand and small business by repealing 31 Acts that have no effect on anyone or on any small business.”

I just say this: as we are trying to reduce, slash, and burn compliance costs through this legislation, I wonder whether Mr Banks has gone to his small-business folk and said “This is the amount of parliamentary time and your money, small-business people—because you are taxpayers—we are going to take to repeal 31 spent Acts that do not have an effect or a cost on anyone.” That is a compliance cost, Mr Banks, that every small to medium sized enterprise that that Minister represents is going to pay. I invite the Minister, given the detailed and substantive Minister that he is, to maybe go and cost the amount he has spent on time-wasting by bringing in this amount of lightweight piffle—apart from, I will say, some decent provisions in here in respect of credit unions.

And there are one or two other provisions, like the amendment to the Companies Act, which Mr Hide himself said would save New Zealand companies—most of whom tend not to be small to medium sized enterprises by the strictest definition, but I am sure that Mr Banks knows that—$1.5 million. Well, $1.5 million is a lot of dough; I accept that. But when you spread that over the thousands of people in small to medium sized enterprises—they are pretty practical folk, and they try to work it out in dollars and cents. They are not into this sort of fluff; they want to work out how much this will save them. I reckon if you spread $1.5 million in cost savings over every small to medium sized enterprise in the country, it would not come to a hell of a lot. This measure, of course, deals with voting and proxies, and the particular provision here deals with whether you can use electronic shareholder participation. I do not know how many one and two-person plumbing firms—and, you know, the odd carpenter, the odd electrician may have three or four people working for him, or a couple of young apprentices—are going to sit there tonight and say “Hell’s teeth, what a wonderful provision! I can now choose to lodge my documentation as a shareholder and participate electronically.” What a brilliant, awe-inspiring, genius, I say. I think this is a moment we should cherish.

Then, of course, we have another provision that I think is a good one—the amendment to the Films, Videos, and Publications Classification Act 1993 to modernise labelling. I concede, for those in that trade—and I offer this as an olive branch to the senior old codger over there, the old Minister, the old tumbleweed—that Mr Hide said that that would save $2.4 million in its first year, going up to $3.1 million in year 5. I do not know how many video firms there are in the country, but that will be of some assistance, I grant you, to them. Likewise, the issues that the Minister outlined around friendly societies and credit unions will assist.

I say that the process that we as the former Government brought in is a good process and a good legislative framework. It is something we should do. But let us not get too carried away. This legislation was trumpeted by Mr Banks and his predecessor, old Rumpelstiltskin, who is now floating around Auckland, Mr Hide. He was going to slash through red tape, and slash through compliance costs. This is what he was going to do. He sent Uncle Fester in, as the nightwatchman from Epsom, Mr Banks. Mr Banks equally gets up and says he is going to slash through red tape, slash through compliance costs, and assist the small to medium sized enterprises. Millions of dollars would flow back into the pockets of these small to medium sized enterprises, through Mr Banks’ good works in slashing compliance costs. And then we pick up the bills. They have got a bit of weight to them, I suppose. There are a few pages in them. We pick them up, and what do we find? Yet again, mutton dressed up as mutton. That is what it is: mutton dressed up as mutton. I was not referring to the Minister; I would have said pork. But I was not referring to him; I was speaking in respect of the legislation.

Then what do we find? We find the big hit, the big moment in the sun. I am going to go out to all my small to medium sized enterprises in Canterbury. Ms Dalziel will too, and she will say “Look, this Minister is akin to Mother Teresa in political terms. Do you know what he has done? He has repealed 31 Acts basically that have no effect on him.” I am sure they will carry Mr Banks through the streets of Canterbury and Epsom in Auckland, showering him with rose petals, laurel leaves, the lot, in Romanesque-like proportions, celebrating what a great champion of small to medium sized enterprises this great man is. Then they might also ask why it was that he trebled the debt of the Auckland Council in 3 years. That is an achievement. That is an achievement that will have more impact on small to medium sized enterprises, I wager, than anything in this legislation that we pass.

So I say to Mr Banks that he has stepped forward with the old cricket bat, tried to slug one over the boundary for six runs, and got caught in the slips behind. It was not a good effort, not a good start, not a bad rousing speech, but I say to Mr Banks that the one thing you have got to remember—and maybe you have been away from the small to medium sized enterprises movement too long, and you have had your nose in the trough of local government for too long—is to think of this. Small to medium sized enterprises, Minister—through you, Mr Assistant Speaker Tisch—are not stupid. They know and they can smell bull when they see it, and this is seriously high-quality bull.

Where does one start? Can I say it is a pleasure to rise to speak to the Regulatory Reform Bill and the Regulatory Reform (Repeals) Bill. I want to start by saying that the National-led Government is working hard to secure a brighter future for all New Zealanders—a brighter future for all New Zealanders. I say to the Minister for Regulatory Reform, who gave an excellent speech just a few moments ago, that I have heard that phrase “brighter future” used recently on television. Who was that?

💬 Jonathan Young: David Shearer.

Very good. Others who are watching television tonight are wondering who the man was they were talking about, the man who was speaking of the brighter future; it was Mr Shearer. Can I say to the last speaker in this debate that our red tape moves are cutting more than $200 million. Here we have two pieces of legislation before this Parliament. The first is to repeal 31 Acts of Parliament. It is interesting because we have heard that repealing legislation that is not useful any more and not used is actually a waste of time. Well, the New Zealanders who voted last year did not believe that. Look at the changes in this House. Some people have returned, but on the other side of the House others have left. New Zealanders decided that useless pieces of space were better to be freed up.

Thirteen pieces of legislation are to be reformed. The best part about this reform is that it is delivering benefits directly to New Zealanders and to New Zealand businesses by reducing red tape and compliance upon them, which is something that so many businesses asked us for and so many businesses will be thankful is being delivered for them. I congratulate the Hon John Banks on bringing this legislation back to the House and on steering it forward.

Mr Cosgrove made reference to two former Ministers. One was Ms Dalziel, who first started along this road to make reform and to recognise that. The second was Rodney Hide, whom he likened to Rumpelstiltskin. Can I say, even Rumpelstiltskin is laughing at that one. But a number of Ministers have been involved.

This is very important legislation for New Zealanders. Why is that? Some of the changes that will be made will put more money in the pockets of these businesses, and what is it that businesses do? They employ people. When do they decide to employ more people? When there are additional funds available to them, when they can be more competitive, and when they can be more productive. The one thing I think we do know is that when businesses are bound by unnecessary red tape, they must do other things and focus on their raison d’être, their reason for being, which is to produce and manufacture goods and export them.

I want to touch on just one part of this before we move on, and that is an amendment to the Companies Act. Actually, there are a number of changes that are coming through this bill that will free up businesses to get on in a new environment of the internet and the way that business is done. The first will be to change the Companies Act to enable companies to hold shareholder meetings over the internet and allow electronic voting. Well, actually, that is a reasonable thing. Let us say that there is a saving there, and the early estimates are $1.5 million. This is about allowing businesses to do the things that they want to, and where they want to do this within the realms of the legislation, and I think that is a good thing. We should not underestimate the saving to small companies—even an insignificant saving to some in this House—and the difference that will make to them. A number of other changes are to the Conservation Act, some more sense; changes to the Statistics Act; and amendments to the Films, Videos, and Publications Classification Act. Did I hear a member of the Opposition talking about that? Mr Jones—no, he is not here.

I want to commend this bill to the House. I look forward to being able to go into it in greater detail when we get to the Committee stage. Again, to the Hon John Banks I say well done for bringing this to the House and for a very strong speech that set out the direction that this Government should move towards: reducing red tape and compliance on businesses where it is unnecessary and backing businesses in New Zealand to get on and do a much better job. That is the way that we will have a brighter future, not stealing slogans and making them into speeches like last week. Thank you.

I am happy to rise and speak to the second readings of the Regulatory Reform Bill in conjunction with the Regulatory Reform (Repeals) Bill. I thought it was interesting that the Minister for Regulatory Reform commented that, in fact, it was the Business Committee that had agreed to the cognate bill process, as if it were something that had been his jolly good idea. But I would like to refer to the commentary from the Commerce Committee and share this part of it with you. It says: “We recommend that Standing Orders be amended to allow more efficient and quicker progress of legislation through the House.

We also recommend that the Regulatory Reform Bill and Regulatory Reform (Repeals) Bill be treated as cognate bills for their second and third readings, and that in respect of the Regulatory Reform (Repeals) Bill the committee of the whole House stage be dispensed with.”

I was the chair of the select committee that put forward that proposal. My deputy chair, Peseta Sam Lotu-Iiga, is in the House this evening, and I hope he is going to take a call and back me up on this.

💬 Peseta Sam Lotu-Iiga: Hurry up.

No, I have got quite a lot to say, actually. Peseta Sam Lotu-Iiga was my deputy chair at the time, and I know that he will back me up on that, because we were actually quite disappointed with the advice that we received as to why these two bills had been introduced to the House as two separate bills with two separate first readings. The way that we could see things proceeding was their coming back to the House and our then dealing with them as two separate bills again. There would have been a lot of wasted time. It almost felt as if Mr Rodney Hide knew that he was not going to be returning to this place and had to have two speeches in those dying days of the previous Government.

But I just want to make the point about why we were disappointed that the two bills were not introduced under the same Standing Order. It does actually back up the point that my colleague Clayton Cosgrove made about the repeals bill being a complete and utter waste of time. I mean, it does not do anything that does not already not happen under the existing law, because all of the legislation that it repeals has been repealed or is spent because it has been replaced. I do not even know whether people realise what is being repealed in the Regulatory Reform (Repeals) Bill. I thought I would share just a couple of them. How about this. Do you remember the Economic Stabilisation Act? Well, this bill repeals the Economic Stabilisation Act Repeal Act 1987. Do you remember business development boards? Do you remember those? Do you remember who got rid of them? Max Bradford—remember that? Yep, well, guess what the Government is repealing here? It is repealing the Business Development Boards Act Repeal Act. So the bill repeals all of these pieces of legislation that simply do not exist; therefore, to suggest that it is adding any particular value is not correct.

But it does come back to this point of why the two bills were not introduced as one bill. The advice that had been given to the Minister for Regulatory Reform at the time—and the select committee, to be frank, did not agree with this advice, but this is what the Minister had been told—was that because the Regulatory Reform Bill aimed to reduce compliance costs and the regulatory burden on business, the bill was introduced under Standing Order 259(a), which allowed the introduction of an omnibus bill to amend more than one Act if the amendments deal with an interrelated topic that can be regarded as implementing a single broad policy. The Regulatory Reform (Repeals) Bill, on the other hand, would repeal 31 Acts that no longer have any effect or are out of date, which means that they did not fit within the context of reducing compliance costs or the regulatory burden on business. That was why they could not be introduced as a single piece of legislation. Well, I think that is a nonsense. If that is how the Standing Orders are being interpreted, then I think the solution is that the Standing Orders do need to change. So I am pleased that we were able to recommend a sensible way forward: for the two pieces of legislation to be dealt with as cognate bills for the remaining stages.

One thing I do want to say to the Minister for Regulatory Reform is that just because the portfolio the Minister has is “Regulatory Reform” was no reason to change the name of this type of bill. My colleague Clayton Cosgrove pointed out that when we were in Government, as part of the Quality Regulation Review process we decided that there had to be a mechanism for amending multiple statutes that did not fit within the Statutes Amendment Bill criteria, which are very strict. There has to be total agreement, and nothing controversial—nothing even slightly controversial—in the context of a Statutes Amendment Bill. But we needed something that gradually made improvements to the various regulatory frameworks that exist. That is not a reform process; it is a gradual improvement process. That is why we called the bill that we first introduced under this provision the Regulatory Improvement Bill. I think Rodney Hide, when he was the Minister for Regulatory Reform, decided that anything in his name should be called a regulatory reform bill, but it is a nonsense to suggest that this repeals bill is a reform. We have heard from the Hon Clayton Cosgrove a very good reason why you would not describe this bill as representing any form of regulatory reform in the true sense of that word.

The whole idea of making incremental improvements to regulatory frameworks within a single bill is actually a very positive one, and it is one that was promoted from this side of the House. That is why I find really unfortunate what this Minister for Regulatory Reform is saying. I remember his welcoming me to this House back in 1990 by telling me to get out from under the rock that I had crawled under, or words to similar effect, and now I feel equally hurt at the suggestion that we did nothing to improve the regulatory framework for business, because, in fact, we focused an enormous amount of attention on getting that framework right, and this process was one of the outcomes of that Quality Regulation Review. It was called the Regulatory Improvement Bill because it was designed to make incremental improvements to regulatory frameworks.

I think the Minister—and it was not this Minister; it was not John Banks who discovered this problem; it was his predecessor, Rodney Hide—discovered exactly the same problem that I discovered, which is that it is very hard to wrench these particular measures out of their individual departments and bring them into an omnibus bill. I cannot emphasise to this House enough how important it is to actually send the message out to the departments to let them go. Let them go, bring them to the Minister for Regulatory Reform, and enable these pieces of legislation to be more substantive than this. I mean, this legislation is pretty much on a par with the first Regulatory Improvement Bill, which I introduced as Minister, and I think we could do better than this in the future. But in order to get that level of change there has to be total agreement across Cabinet that an individual—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 10 p.m.