Companies and Limited Partnerships Amendment Bill

Thank you very much for giving me a call on the title and commencement date clauses of the Companies and Limited Partnerships Amendment Bill. This is usually the part of the debate where people have a bit of fun with the title of a bill. I will not do that and I will turn to clause 2, the “Commencement”.

Generally, as my colleague Clare Curran has pointed out, the commencement of this bill is going to come far too late. This is a Government that claims it is business-friendly and works in the interest of both big and small—usually big—business. But this piece of legislation, which is designed to protect the reputation of the legislation around our companies and limited partnerships, has languished on the Order Paper under this Government. I think it was Minister Simon Bridges who said it was because this Government has been a busy Government. Well, yes, in one respect it has been a busy Government—selling our State-owned assets, introducing rank changes to our education system—and, all of a sudden, this piece of legislation lands in the Committee. We have not seen it for some time and we have to ask the question around its commencement: why is it all of a sudden here?

Why is this, what we would call, relatively mundane piece of legislation, which has support from both sides of the House, all of a sudden arriving here in Parliament? It is because—for the people at home who do not understand what is going on here—John Banks is not here any more and this Government cannot pass any of the legislation that it really wanted to pass. That is really the bigger game here. That is what is going on. Because John Banks is not here, you will not see anything go through this House that the Government can just squeak through with its one vote majority, and that is the likes of selling our assets, changes to housing, and changes to our education system. You will not see much of that any more because this Government no longer has the numbers to make sure that that kind of legislation gets through. For a long time now this Government has relied on the vote of John Banks and Peter Dunne to get all that kind of controversial legislation through. But no longer will we see that—

The CHAIRPERSON (Eric Roy): Order! Clauses 1 and 2.

—because the vote of Mr Banks is no longer here.

That goes back to the commencement date and why I say that this is coming in far too late. This is a piece of legislation that is very important and that has cross-party support. As you have seen, there are a number of changes that the Minister has made in Supplementary Order Papers post the select committee process that members on this side of the Chamber are very, very happy to support. So you would think that because of that relatively good working relationship on this side of the Chamber, this piece of legislation would be shuffled through pretty quickly by this Government. We have had this legislation there for the benefit of protecting the reputation of the legislation that governs our companies. But, no, the commencement date will not be for some time because this piece of legislation has sat quite a way down on the Order Paper and its commencement date will be some time into the future. It could have been, quite sadly, passed much, much sooner.

We wanted it to be passed much, much sooner, again, because of the protections it gives to our firms to protect the reputation that they have around the world. I have a number of small businesses in my electorate. They trade—I will not mention names because they will not enjoy that—and they go out there to the global market, and, because they are from New Zealand, the people they work with are quite happy to work with them because of the reputation that New Zealand businesses have. As I said earlier, there has been concern both domestically and internationally because, like in a lot of other countries around the world, there has been a fair degree of people using the reputations of firms in countries like New Zealand and taking advantage and using shell companies. So to protect the reputation of New Zealand firms—and, I think, quite rightly, and with the support of this side of the House—the Hon Simon Power in 2010 began work for this legislation to be improved. That is right, I did say 2010. So it was quite some time ago, and National has had quite a high degree of support from this side of the House, but it was not until 18 June 2014 that we have got to this stage, where this can get through the Committee stage.

I think that is a sad state of affairs, where the Government does not think that this kind of legislation is very important, more so for those smaller businesses that use our reputation for doing business to ensure that they can get business. Those kinds of firms are very strong around the world. They could have had a lot more confidence in going overseas and selling their products overseas with more protection from this piece of legislation months or years earlier had this Government given this piece of legislation priority. I think it is a sad state of affairs in terms of when this piece of legislation will commence. As I say, it could have happened much sooner, only this busy Government was doing much more controversial things, and now it has got to the stage where, because of the mathematical realities of the House, non-controversial pieces of legislation will now be coming through the House.

I just want to talk about some of the things that will commence under this bill. I want to talk about clause 4, where, under section 131 of the Companies Act, I understand it will be a criminal offence if a director breaches his or her duty where a director knows that a breach is seriously detrimental on the interests of the company, or where, under section 135, he or she breaches his or her duty knowing that a breach will result in serious loss to the company’s creditors. I am trying to think of a situation where that might be the case. It certainly might be the way that Ministers have carried out their dealings with the likes of, say, Solid Energy, because we certainly know that the direction given to that company had a detrimental effect to that company and now it finds itself in a very tricky position of trying to work itself out of a serious amount of debt because of the pressure that this Government put it under. It will be interesting to see how this piece of legislation would lie over that kind of situation, because in that situation the directors of that company were put under a fair amount of pressure to increase their gearing to make sure the Government could get a better return from what was a well-performing State-owned enterprise but is now one that is struggling to quite an extreme extent and has to force many lay-offs. That is the kind of management of our State-owned enterprises that we have had from this type of Government.

In terms of the title and commencement, on this side of the Chamber we say that it has happened far too late. We have made requests to the Minister as to why this piece of legislation, which deals with criminality in a corporate sense, was not given the same priority from the Government in terms of the other legislation that deals with criminality at a street level. Again, we think there is a degree of dog whistling going on over there from a Government that said it was business-friendly but really, in this sense, it has not walked the talk and has not given those smaller companies the protection of the reputation of doing trade in New Zealand. I think our businesses may have suffered to a degree because of that. The Government has not given what it calls its natural supporters the protection of this legislation, which could have happened much, much earlier.

I do again offer the Minister in the chair, the Minister of Commerce, in the dying stages of this Committee stage, the opportunity to explain the Government’s position on that. Again, I am not so hopeful of getting a response.

I do want to go back to the issue of New Zealand being removed from the white list, just in this final stage of the Committee stage on the Companies and Limited Partnerships Amendment Bill around the title and the commencement. It is important to point out that that white list includes countries such as Australia, Brazil, Canada, Hong Kong, India, Japan, South Korea, Mexico, Singapore, Switzerland, South Africa, and the United States.

Not everybody in New Zealand would know what that white list was, but being removed from it actually means that banks and other financial institutions in the European Union, for instance, can no longer accept and acknowledge the “know your customer” identification and analysis performed in New Zealand. It would seem to me that that is actually something that we should be a bit worried about and a bit ashamed of.

I understand that back in 2012, when we got removed from that white list, there was a flurry of activity by various Ministers, including the Minister of Justice over there and the Minister of Foreign Affairs, about trying to get us back on that white list. It would be quite interesting to know, because I just did a wee Google search on it, as to whether we are back on that white list. Can anybody confirm whether we are or not? No, everybody has got their heads down, so I am presuming that we are not.

💬 Hon Todd McClay: Oh, don’t presume.

Actually, that is quite significant—

💬 Hon Judith Collins: Why don’t you just make it up?

So are we or are we not? Are we back on the white list? Are we back on the white list, Minister? Are we? If we are, that is a good thing, but let us actually hear from you as to whether we are or not. No answer? No. Clearly, we are not.

So it is 2 years—2 years—since we got removed from that white list. We got removed from that white list because we needed to change our laws. We needed to change our laws and put in place more restrictions on the way that businesses were operating in this country, and white-collar crime was actually being conducted. Well, we have dragged our feet. The Government has dragged its feet. It has not actually done the best it could for New Zealand businesses and, as a result, we have a black mark against us in the international environment around the way that New Zealand does its business. I think that that should be reinforced, because this Government pretends it is there for businesses and for good business practice. In reality—

💬 Dr Paul Hutchison: Oh, there’s no pretence about it.

Well, can you over there on the other side of the Chamber dispute the facts? We did get removed from that list. Have we actually got back on it? If we have, then that is good, but clearly we have not.

This bill has taken far too long to get through the House. It is really important to have robust debates. We need the time in Parliament to have those robust debates, but there has been too much time in between those robust debates, so we are not seeing the legislation actually make it through the House in the way it should, where it actually impacts on the white-collar criminals, the behaviours that lie behind them, and the behaviours that are condoned in a system that should be being fixed. The issues were identified at least 3 or 4 years ago. They have not been acted on fast enough. It is an indictment on this Government that it has not done that. It has not done it because it has been pushing through legislation that is impacting on other aspects of its agenda—which is a political agenda and an agenda about making the vulnerable more vulnerable and working people’s lives harder—and not holding to account the behaviours in business that are behaviours that we as a country should not be condoning.

We support this legislation because it is important. We did a lot of work in the Commerce Committee to improve the legislation, to make it more effective. Unfortunately, it has taken far too long for it to get back before this House, and it is going to take even longer for it to get passed and then for it to be commenced and actually put into law. I think that that is an indictment on this Government and the way that it has conducted itself over the last 6 years. This Government is actually not about holding to account the white-collar criminals in our country.

I move, That the question be now put.

Motion agreed to.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 465 in the name of the Hon Craig Foss to clause 2 be agreed to.

Amendments agreed to.

Clause 2 as amended agreed to.

The Committee divided the bill into the Companies Amendment Bill (No 4) and the Limited Partnerships Amendment Bill (No 2), pursuant to Supplementary Order Paper 466.

Bill to be reported with amendment presently.