New Zealand Business Number Bill

I move, That the New Zealand Business Number Bill be now read a first time. I nominate the Commerce Committee to consider the bill. The New Zealand Business Number will help to reduce costs that businesses face when dealing with the Government. The New Zealand Business Number is part of the Better for Business – Result 9 programme of the Government’s Better Public Services initiative, which aims to reform the public sector to provide high-quality, flexible, and cost-effective public services in New Zealand.

Currently, eight key Government agencies collectively provide over 700 different services to New Zealand businesses. The quality and speed of these services makes a difference to businesses’ ability to perform, grow, and export. Of the about 1.3 million New Zealand businesses, 90 percent of them have contact with one or more Government agencies at least once a year. An estimated 30 million interactions occur between public sector agencies and small to medium sized enterprises every year.

The public sector is currently organised—as it has been for many, many years—as a series of vertical agencies that operate in relative separation from each other, according to their mandates and functions. This vertical structure of the public system does have its challenges. It results in duplications of transactions, and therefore inefficiencies, from each agency developing the same capability. It is no longer fit for purpose in this modern world. Government agencies need to perform better to secure outcomes that matter to New Zealanders.

In terms of the business sector, businesses find interacting with the Government to be at times confusing, unproductive, and time-consuming. The compliance costs of dealing with the Government can adversely affect the productivity of a business or impact on the potential for economic growth.

Businesses have been telling us they want to spend more time on their business and less time on the administration of that business. Estimates suggest that repeated registration processes are estimated to cost New Zealand businesses up to $34 million a year in lost productivity alone, maintaining core business data with Government agencies can cost business up to $26 million a year, and between 50 and 60 percent of business details are replicated on over 250 Government forms. Although 30 percent of sole traders and nearly a quarter of companies change some of their details each year, around only half of them tell the Government about the change.

Businesses want joined-up Government services and more certainty and less confusion when interacting with the Government. They want an infrastructure that better enables and supports e-commerce and business innovation. In a nutshell, giving businesses a New Zealand Business Number will enable service integration and innovative, time-saving administration solutions between businesses, their suppliers, and the Government.

This programme has been worked on for a period of time and it is now time to get this bill into the House to deal with some of the legislative issues around the New Zealand Business Number. In practice, businesses will no longer have to keep updating their data with a myriad of agencies but will be able to start, maintain, and cease business activities with the Government in one place, giving them more time to spend growing their businesses.

The purpose of the New Zealand Business Number Bill is to enable easier and more efficient interactions for business in New Zealand. It is required to enable the allocation of New Zealand Business Numbers to eligible businesses and to individuals operating as businesses. Over time the New Zealand Business Number will replace many of the separate numerical identifiers that agencies currently use.

The bill sets out that there are two types of business entities: corporate and public entities, which will be governed by one set of rules, and unincorporated entities such as sole traders, partnerships, and trustees of trusts, where special rules are needed to address privacy issues. The bill establishes the statutory position of the Registrar of New Zealand Business Numbers and it establishes a New Zealand Business Number Register. The register will collect in one place a core set of data about a business. The data will be such things as the type of entity, where the business is located, and so on. The proposed types of data are set out in schedule 3 of the bill, and in the draft regulations. The regulations will also be released so the full list is available for consideration by submitters. Some of this data will be publicly searchable, and some will be public only if the business allows it. Government agencies will be able to access this data to update their own systems. In the course of time, it is intended that the agency systems can be used to update the New Zealand Business Number Register. Third parties will also have access to a business’s information if the business consents or if the data is in bulk or aggregated form and no individual can be identified.

One of the challenges when dealing with individuals who are in businesses is privacy issues that arise under the Privacy Act 1993. The bill will enable the allocation of a number to individuals. This requires an override of privacy principle 2. In addition, the data on the register will not necessarily come directly from the individuals concerned, and that requires an override of privacy principle 12.

The bill puts in place various protections around the security and confidentiality of private information. The Privacy Commissioner will be able to require the registrar to prepare a report that assesses the effects that the register has on the privacy of individuals in business. The bill provides the registrar with the usual types of powers to operate the register, make decisions, verify identity, investigate possible contraventions, and take enforcement action. Certain decisions of the registrar can be appealed to the High Court.

New Zealand is famous the world over for the relative ease of doing business here. Only last week I was talking on behalf of New Zealand in South America, and many of the business people I met expressed great interest in our reputation in regard to the ease of doing business. But we cannot rest on our laurels. The New Zealand Business Number will take New Zealand to a new level in the ease of doing business. It is important we do that because we operate in a competitive world, and of course our businesses face other challenges such as size of market and our relative isolation.

This New Zealand Business Number will increase innovation in business services, and the future integration of Government services to businesses will be enabled by the New Zealand Business Number Bill. I have pleasure in commending this bill to the House.

The aims of this bill are indeed laudable. As they are outlined in the bill itself, they involve an attempt to achieve the Government’s objectives as recorded in its objective No. 9, which is to reduce by 25 percent the cost of dealing with the Government. A lot of businesses do have a significant cost involved in dealing with the Government, particularly those businesses that have only one or two employees. Some spend up to 20 percent of their turnover on tax compliance. Red tape is, of course, the No. 1 complaint that a member of Parliament comes across when asking what it is like for businesses on a day-to-day basis dealing with the Government.

I think it is a sad indictment on this Government’s progress that Steven Joyce could give that speech describing a siloed Government environment and the handbrake on economic growth that that represents. He gave it unashamedly, without blinking. He tried to say that this is something that needs addressing. Well, it is, but somewhere along the line this Government needs to stand up and own the fact that 7 years have passed, and the situation has not improved.

Our problem with this bill is that it is at risk of adding just another number. This number risks adding an additional burden of compliance to the systems already in place for business, and the compliance costs are already quantified in the regulatory impact statement that we have sitting here on the Table. For those who are watching at home—and I have met a few people over the course of the last week who do watch Parliament TV; I am reliably informed they are out there—we have been presented with a 38-page regulatory impact statement. It is common for these to be about four or five pages long. When you get a 38-page one, alarm bells start going off. The department concerned is worried that this idea has a number of fish-hooks in it that have not properly been considered by the Government. Then it has a follow-up regulatory impact statement of nine pages, just in case it did not get them all in the first one. This department, the Ministry of Business, Innovation and Employment, is concerned that we have a ministry here that is being forced to take up an idea of the Minister’s that is a little bit half-baked, and that comes out in the regulatory impact statement we have in front of us.

So what kinds of concerns do the officials have? Primarily, they are concerned that there is really no evidence that this kind of approach has worked overseas, so they do not have a basis upon which to make a solid judgment about whether it would be good or whether it would not be good. The second set of concerns revolves around the uptake of the number, the speed of uptake, and the wait-and-see approach that seems to be put in place by the Government, which says: “Well, maybe agencies will take it up. Maybe businesses will take it up. Let’s see what happens.” So that is the crux of the concerns of business around it. We have seen that this is a Government slow to really act to reduce red tape for business and, in fact, has increased red tape in many, many, many of the bills that it has put through the House.

A couple of examples spring to mind, one being the child support tax changes that now require employers to collect overdue tax arrears through their payment to their employees, giving them information about their employees they may not otherwise have had, potentially opening them up to disputes with their employees, and so on. That kind of red tape has not been thought about when the Government has rushed through the law. Likewise, the paper boy and girl tax—the compliance system there, and taxation requirements that the Government pushed through. These kinds of thoughtless changes that have gone through have a very real cost for the people who risk their shirt every day in small business throughout New Zealand.

The Labour Party is concerned that we should have an innovative small business sector—one that is growing and one that has the opportunity to generate wealth for New Zealand—because our future prosperity depends upon emerging industries that are not bogged down in compliance that has been put in place by the Government unnecessarily. So Labour recognises the need to support businesses by cutting red tape where possible, and reducing the cost of business transactions for small businesses, sole traders, partnerships, and trusts. If this is what the bill actually achieves, we will support it right the way through the House.

At this stage, however, we are prepared to support it only to the select committee because there is so much lack of clarity around the bill and how it will be implemented, and so many fish-hooks, that we want to receive the submissions at the select committee to see how business interprets the lie of the land, and whether businesses, when they have a good look at the law as it is proposed, think that it really will make a difference for businesses.

The biggest initiative, of course, that the Government could undertake would be tax simplification. It has been done overseas. It has been done in Australia, it has been done in the UK, and where you do have businesses spending up to 20 percent of their turnover on tax compliance, it would be a big win if the Government undertook tax simplification. Again, where small business is concerned, it does not seem to have been very quick off the mark there—it seemed quicker to meet the needs and concerns of big business.

Well, Labour is on the side, and always has been, of the person who is struggling to get ahead, who is trying to make their way in the world, and the small-business people of this world are the ones we have in mind. That is why we are worried about the additional compliance that is proposed here, and the additional compliance I have already mentioned that this Government has placed on small business throughout its time in Government.

The concern about the siloed Government approach that Steven Joyce raised is raised in the paper by officials—the 38-page list of concerns that they have put in front of the House—as are the privacy concerns that the bill presents. Identity theft in the US has been a problem with similar systems, and we see that this is something that concerns also the officials who are advising on the bill. I have no doubt—no doubt at all in my mind—that my colleague Clare Curran will have a little more to say about the Government’s track record on privacy issues and the risks that are presented by identity theft. That is her specialist area, and I am sure she will tell us a little more about that in her contribution.

The repeated registration processes at the moment in dealing with the Government cost New Zealand businesses up to $34 million in lost productivity every year, says the Ministry of Business, Innovation and Employment estimate in the papers we have been supplied with. The ministry’s concern is that this unique identifier will not become a unique identifier because of the way it is implemented, but that instead it will join the list of other business numbers produced by the Government that are part of this constant churn of reregistration, of working out which number to deal with when you are dealing with the Government, rather than being the simple system that ought to be in place. Again, it says: “Maintaining core business data with government agencies costs businesses up to $26 million each year; between 50 and 60 percent of business details are replicated on over 250 government forms.” These are shocking numbers. This is the shocking reality of a Government that seems to be out of ideas. It has been very slow to move on these issues, and here again is moving with a half-baked solution.

I think that perhaps one of the most telling paragraphs in this regulatory impact statement is paragraph 16 in here. It states: “The NZBN has already been allocated to companies in New Zealand. Ministers would like to extend the NZBN to all businesses to enable a digitally-based economic infrastructure.” That is all well and good, but then it says: “Our options are therefore constrained to consideration of the best way to extend the NZBN to all businesses.” Therein lies the rub. The officials have recognised that despite their 38 pages and further nine pages of concerns, Ministers are determined to press ahead with this, regardless of the consequences. They want to be seen to be doing something about making business easier and business compliance easier, but the real test will be when the rubber hits the road, and I am sure we will hear from businesses when they present to the select committee on whether this will really work for them.

This is a Government, of course, that came in strong on promises but seems to be becoming stronger and stronger on excuses. It is a Government that seems to be tired and out of ideas. Now we have some half-baked ones being thrown up. We hope they can be knocked into shape in the select committee so that they really do make a difference for business in New Zealand because we do need our small business sector to prosper for the good of all New Zealand. We will support this bill to the select committee, and we will see what comes of it there. Labour will be concerned to see that it really does make life simpler for those people who risk their shirt every day in order to better their own lot, and to better the lot of the families around them and the people they care about—the New Zealand business people. Thank you very much.

It is a great pleasure to rise to speak on this first reading of the New Zealand Business Number Bill. Before I actually talk a little bit about the substance of the bill, I would like to commend the member who just sat down, David Clark. I look forward to working with him and his colleagues opposite in the Commerce Committee because I think we do actually work quite well together. Having said that, I commend the member for saying that he does not like an extra layer of bureaucracy. I think the member came in in 2011 and does not really remember the times when the previous Labour Government was in power and there were extreme layers of bureaucracy that this Government has been spending a lot of time unravelling.

This New Zealand Business Number Bill is part of the Government’s Better Public Services agenda. It aims to reduce the cost to businesses of dealing with the Government by 25 percent by 2017. I know that Dr Clark, just before he sat down, said that he wants this to benefit the hard-working community—people who work for their families, and, you know, everyone. That is everyone, not just businesses. He mentioned the fact that there are already 1.1 million New Zealand Business Numbers extended to companies, and what this bill does is to extend it even further, to those that are not necessarily companies—to those sole traders, partners, and trusts that also need to have this number in order to operate better and take the benefit from what we are doing.

All key Government agencies that work regularly with businesses will be required to recognise and use the New Zealand Business Number by 2017. I actually have to applaud that. The New Zealand Business Number is a 13-digit number—a single, unique identifier in a New Zealand - specific numerical series provided by GS1, which is a global standards organisation. Each number uniquely identifies a business and may be used in interactions with the Government and also with other businesses. The bill’s purpose is to enable certain business entities to obtain or be allocated with a New Zealand Business Number. The New Zealand Business Number will make it easier, quicker, and less complicated for businesses to interact with the Government.

I guess it is sort of like going back to one’s country of birth. My country of birth actually has a registration number for all citizens who are born there. We are identified with a unique number for ourselves, as well as the birth date and the year that we are born. We are actually identified by a number. I suppose that is how the social security number works in the United States. To make sure that your unique number actually is specifically for you, Mr Deputy Speaker, you and I would have a different number so that you and I would not be confused. This is exactly the kind of idea, effect, that this New Zealand Business Number will have on businesses, so that businesses will not be confused—so that one business will not be confused with another. They will have a unique number, specific to their business.

This has significance because New Zealand Business Numbers will make it easier for businesses to work and interact with the Government as well. Businesses will no longer have to continuously update their data with a myriad of different Government databases, as businesses currently have to use multiple numbers issued by different Government agencies. I think of when I did a company search when I was a journalist. Every time I logged on to try to find a company, I was given a number. Every time I did it again, I was given another number, and another number. It was a constant numbers game. If I had one number identifying myself as a constant user of that website, and I was identified as a specific person who was allowed to use and connect with the Government agency, I think it would have made life so much easier.

Also, I think, small businesses operating in New Zealand are often sole traders that have to do everything. Not only do they have to work the job but also they have to invoice, do marketing, and drive as well. Often time is of the essence, and time spent dealing with office work and dealing with administration means time that is not spent on making the dollars for their families and their businesses. Anything that we can do to reduce the number that is spent on administration is something that is great, I think. As working mothers, even when we are doing internet banking or mobile banking, when we have an app that can actually identify our payees immediately so that we do not have to punch in the numbers all the time or constantly, it reduces the time that we spend on the internet doing these things. So for a business that is actually spending a lot of time on admin, if we can at least do something to reduce the time that it is spending on admin, I think that is something that is wonderful.

I say that, specifically for the ethnic migrant communities who do business, admin is an added burden, often, because of the language barriers. This time spent on admin is extra, on top of the language issues that they already face. So if we can make life easier for them, I think it is a wonderful thing.

The bill sets up a New Zealand Business Number Register, where business information will be held, publicly viewable, and searchable. However, it is also designed to protect the security and confidentiality of information under this bill, and the privacy of individuals in business. I think that is paramount. I agree with the member Dr David Clark, who actually talked about the security issue. I think we all worry about the security issue.

💬 Kanwaljit Singh Bakshi: You should have taken his number.

I look slightly different from him, I think. I think the security issue is a very important one, and nobody wants a breach and identity theft. We have had issues, even before this Business Number. We have had in the past instances where people’s identities had been stolen, and I think that will continue to happen. We try to put security protection in there to actually prevent people from stealing other people’s identities, but when somebody purposely goes out to steal somebody else’s identity, with the purpose of committing a crime, I am unsure as to whether anything could actually prevent them from doing so. So it will be very interesting to hear the public submissions on this bill. I look forward to the discussions that the select committee will have on these issues. I look forward to the advice we will get on that particular aspect of the bill.

In the future, once the regime is fully implemented, businesses will be able to update their details in one place. That has to be a good thing—to automatically update others without businesses having to go through a complicated and time-consuming process, as I had earlier alluded to. This means less time and effort on Government administration and more time for business owners to focus their efforts on productivity, growth, and exporting their goods. Having been to Korea to sign a free-trade agreement deal, I think anybody who can grow their business, grow New Zealand, is doing a great job, and we should reduce the workload that they have in admin.

This is a great bill. I commend it to the House.

This is a fascinating bill. I am actually really looking forward to the discussion in the Commerce Committee on this, because, as the Minister for Economic Development said in his opening remarks, it is really about modernising the way that businesses interact with the Government—

💬 Kris Faafoi: Potentially.

—potentially—and trying to provide the best possible framework for that to happen. Labour is supporting this bill to the select committee; you have already heard that.

I have mixed views on my first reading of the bill, the regulatory impact statement, and some of the submissions that went into the consultation around the development of this bill. On the one hand, I think the modernising of that relationship is critical; on the other hand, you have got to have in place the checks and balances to protect the privacy of businesses and those who sit behind the businesses. And you have got to ensure that you have got that balance right. On my first reading of the bill and the information accompanying it I am not sure that that balance is right.

To put that in context with the enthusiasm of the Minister getting up and talking about how, you know, it is all a great new world and everyone will have a New Zealand Business Number, and it is all going to make things work a lot more smoothly, etc., I think you have got to look at the track record of this Government around its management of IT across the Government—or its lack of management of IT processes across the Government—and also its management of privacy and its devaluing of privacy. I am certainly looking forward to the contributions that will be made by submitters on this bill, because this is where the rubber hits the road in terms of the ability of the Government to act in an efficient and modern way while ensuring that the entities that it is relating to are protected.

The phrase that came to mind when I was reading this bill was that it has the potential to be a big data-grab. That is where I would be raising questions and doing a bit of flag-waving. This is the era of big data. This is the era of data analytics, of the ability of entities to use their ability to get as much data as possible to give them leverage. The Government is a big entity. How it manages the data that it gets from its citizens and from businesses is a matter of trust. It is a very important relationship of trust. My concern is around where the checks and balances lie in this piece of legislation.

I will use the analogy of security and privacy. In any society it is absolutely critical that you have got an equal relationship between security and privacy. At the moment—and for those who are listening to Parliament by radio, I am holding up my hands in an equal way—in any society, security and privacy should be equal pillars. In our society, the security side has gone up in terms of the way that national security legislation has been given more of a priority, and personal privacy has been given a lesser priority. Well, what we are talking about in this bill is the privacy of companies, of businesses, and of entities, and my concern is that there could be some compromising of that privacy under this bill. What we have to ensure is that there is level pegging around privacy and the ability for the Government to gather data and to use that data, and around what that data is being used for.

Just to illustrate that, I am going to quote from the Cabinet paper that lies behind this piece of legislation. This is all about the scope of this piece of legislation. It says: “We propose: extending the NZBN to all entities trading in the New Zealand economy, including sole traders, non-incorporated partnerships and trading trusts, and to state sector and not-for-profit entities; businesses not to be charged for allocation of an NZBN or to remain on the NZBN register; a new legal register, managed by MBIE,”. The most important part of that proposal is to extend the New Zealand Business Number to all entities trading in the New Zealand economy, including sole traders, etc. So what that means is that the scope of this bill includes the individuals who are operating as companies, and there are concerns raised within the regulatory impact statement around that—around what that actually means and what the implications of that are.

There are concerns raised around whether or not it is compulsory to be on this register, and there are concerns raised around what sort of information is being collected. All of those things are absolutely critical. In this day and age it is time for us to have this debate. Therefore, my mixed views around this bill are such that I am concerned about the track record of this Government. But I certainly think that it is time to have this discussion. As I said, this is the era of big data, and the ability to collect data is really important, but it should be done in the most ethical manner—the manner befitting a Government in a democratic society, one that is progressive and one that puts privacy at the top of its agenda. This Government does not put privacy at the top of its agenda, and this is going to be the challenge in this debate.

I just want to draw the House’s attention to the regulatory impact statement, where it says—this is in the table below paragraph 22 of the regulatory impact statement—that “Overall privacy risks to individuals and cost to society of identity fraud are likely to outweigh benefits to business and to government”. This is actually being specified in the regulatory impact statement as being a key risk. The Privacy Commissioner did provide advice, alongside other entities such as Business New Zealand. It is noted that the bill takes into account some of that advice, but it certainly does not take into account all of it. So that is why the submissions from the Privacy Commissioner and anyone who cares about privacy are going to be very important.

In the regulatory impact statement the Privacy Commissioner has set out a series of issues that he thinks are critical, which includes that this bill should include “a clear statement of purpose for the NZBN and the register that is not overly broad or unclear; a specific limitation that restricts the use of the NZBN to business purposes only and a prohibition on its use for non-business purposes such as social service purposes; a definition of the personal information that may be collected; clear maintenance of the Privacy Act prohibition … against an agency requiring an individual to disclose a unique identifier for a purpose other than that for which it was issued; [and] an explicit prohibition against agencies using the NZBN for a purpose other than that set out in legislation”. I am not sure that that exists in this legislation. Finally, the Privacy Commissioner says that “an explicit prohibition to prevent agencies from requiring an individual to provide a New Zealand Business Number in order to receive”—

I am sorry to interrupt the member, but her time has expired.

Thank you for the opportunity to speak on the first reading of the New Zealand Business Number Bill. First of all, I would like to congratulate the Minister for Economic Development, the Hon Steven Joyce, who has initiated the process of best practice in New Zealand. This legislation allows the allocation of unique identification numbers to businesses such as sole traders, partnerships, and trustees of trusts. This National-led Government has done a lot of fantastic work in the past 6 years. This current legislation will further enhance the capability of providing better public services to all New Zealanders. Providing better public services, of course, is one of National’s key priorities.

This National-led Government is in no doubt that we need to continually strive to improve New Zealand’s economic performance if we are to continue to live the enviable Kiwi lifestyle. In our economic performance as a country, that will determine whether we have jobs, our incomes are on the rise, our standards of living continue to improve, and we provide top-notch services that all Kiwis need and are truly entitled to. By way of this legislation, it is estimated that the Government will reduce the cost of doing business by 25 percent by the year 2017. This will, in my mind, without doubt lead to a more competitive and productive economy. That is what is required.

We need to create opportunities for businesses. Small businesses that are engaged in export have increased from 13 percent in 2007 to 21 percent in 2014. Similarly, medium-sized businesses that are engaged in export markets increased from 21 percent in 2007 to over 28 percent in 2014. It shows that businesses are growing and looking towards export, and that is what we need. We need more jobs, we need more growth, and we need new markets.

This Government has been focused in the past 7 years on opening up doors for businesses to the international market. The recent signing of the free-trade agreement with South Korea is an example of where we have created opportunities for other small and medium sized businesses. The easier and the simpler we make it for businesses to operate, the more time and energy we give to our entrepreneurs towards the expansion of their businesses, and towards using innovative ideas to create products and services that put New Zealand on the world map. The chain effect of all this, of course, is a no-brainer. We are creating highly skilled and high-paying jobs for our current and future generations. These jobs will create products and services that will build our exports, increase innovation, make our workplaces and lives safer, and build our natural resources and infrastructure for all of us to make use of. The effect of our pragmatic approach towards assisting Kiwi businesses and Kiwis with our economic management will ensure that the world-leading growth performances that New Zealand has shown in the past couple of years turns into a long-term, sustainable future for our economy.

This legislation will mean that rather than updating their data on a number of media, businesses will need to use just a single medium. The New Zealand Business Number will lead to smart administration solutions for all stakeholders—businesses, suppliers, and Government. This will save time and effort, allowing all to focus on the real work. Furthermore, this information will be shared amongst Government agencies, so that each time a business needs to interact with a Government agency, it will need to provide its New Zealand Business Number. There will no longer be a requirement to fill out multiple forms and go through bureaucratic rigmarole. We are also working closely with our Australian counterparts towards developing mutually recognisable Australian business numbers.

Even in our conservative estimate, New Zealand businesses stand to save $60 million with this single piece of legislation. It is now up to businesses to take up this opportunity. The sooner all of them sign up, the sooner benefits will flow to all businesses. As I said at the start of my speech, this is only one of the several positive pieces of legislation that this National-led Government has presented in this House and to New Zealanders. I hope that during the select committee process we will have more interaction with businesses and see how they can benefit. With these words, I commend this bill to the House.

It is a pleasure to stand to speak on the New Zealand Business Number Bill. The overarching aim of the Green Party’s economic development policy is to facilitate the transition to a smart, green economy, and so, to that end, initiatives to support businesses to reduce their time and administration costs are to be welcomed. The Green Party will be supporting the New Zealand Business Number Bill.

Before I get into why we are going to be supporting the bill, I just want to set a little bit of context. A number of previous speakers have spoken about the intended benefits, mostly to do with the efficiency gains that may be available to businesses as a result of having these unique business identifying numbers. In terms of the number of businesses out there, some really useful information that came up in the regulatory impact statement is that there are 1.1 million companies already in New Zealand, 500,000 to 600,000 of which are actively trading, and that these companies already have business numbers. But in addition to that there is another entire half of trading relationships in New Zealand that are organisations that are not companies. So trusts make up 15 percent of trading relationships in New Zealand, sole traders make up 19 percent, partnerships make up 12 percent, and 4 percent is made up of Government agencies, non-Government organisations, and social enterprises.

So there is a significant number—as many as half of all businesses in New Zealand—that are not currently covered by the existing business numbers that are already out there. I want to pick up, in particular, on the sole traders and the freelancers, because they obviously cover a huge portion of New Zealand’s business people, and, in fact, of our total population. There are, by some estimates, 270,000 or so sole traders, freelancers, one-person companies, and so on. So for those individuals—and having spent much of the last 10 years of my life as a freelancer—the administrative burden that comes when there is only you to run your business and to interact with various agencies and so on is significant, because every moment that is taken out of my day as a freelancer dealing with just data entry is an hour that I cannot spend growing my business.

One of the interesting opportunities in this bill, if it was to cover sole traders, is the idea of an aggregator effect—being able to, essentially, pull together some bargaining power across all of those sole traders and freelancers around in New Zealand. If we had better access to those people and were able to identify them more clearly, it is conceivable that we could actually build further services for them and maybe bring some other costs down—for example, insurance costs or even energy costs, and things like that.

It does, however, raise a question of privacy, which I will come to in a minute, and which some other speakers have already referred to. One of the other benefits that may be available from this, which is also privacy-related, is the idea that consumers and employees who have been hard-done-by by some businesses may find it easier to get recourse to justice if those businesses are easier to track, because there is a sector of our society in which businesses change their names, or shut up shop and reopen over the road, and so on, in order to avoid, for example, court judgment costs. So one of the benefits of this approach may be that people will actually have more access to justice if they have been hard-done-by.

All of those things do bring us back to this question of privacy. If there are something like a quarter of a million or more freelancers and sole traders and so on in New Zealand, that is nearly one in eight people in the entire country, and most of those people will be operating their businesses from home. So the question of their residential address and contact details being tied to their company does raise some privacy concerns for a very substantial portion of the New Zealand public. It becomes a sort of proxy personal identity number for a significant portion of our population. So we do have some questions about how the data will be managed, what the security and integrity of that data is, and so on. Of course, this is not an issue that is unique to this particular initiative, but as has been amply demonstrated across a number of agencies, it is a real concern.

The other concern that we have, which was raised in the regulatory impact statement, is about whether this initiative will actually achieve the stated objective—that is, to increase efficiency. The Government has talked about something like up to $34 million worth of costs that could be mitigated across the entire economy. That is actually not a terribly large number, of course, when you consider the overall trading economy.

Apparently, there are no other countries that the Ministry of Business, Innovation and Employment has been able to find that have the experience of having unique identifying numbers for their businesses where they have been able to quantify the efficiency gains to businesses, so there does not seem to be a clear precedent. Although we have been able to estimate that $34 million worth of benefits are available if we go down this path, we are not sure whether that will actually eventuate. Other countries’ experience does seem to say that unique identifying numbers have been good for increasing e-business services. That will clearly be an increased benefit, and you can see how that will be available to businesses that are using these numbers.

So we do have some concerns, particularly in the domain of privacy, and it will be very interesting to see the submissions that come through on the bill and to see how those go, and to see also the extent to which we are actually confident that, having put in place this system, New Zealand businesses will be able to capitalise on the savings that we think that they may be able to.

As I said at the beginning of my remarks, it does seem like a very sensible initiative and pretty uncontroversial, generally. Any initiative that is sensible and does not carry a great deal of risk and that helps to reduce costs or facilitates the reduction of administrative time for small businesses, particularly for sole traders and freelancers, we would like to support. With that, I commend the bill to the House.

Thank you for the opportunity this evening. I would like to suggest to some of the members who spoke on behalf of the Government this evening that the prospective benefits of this bill should not be overplayed, and that we should take this in full consideration and give it the due benefit of time and the input from business itself. Let us not oversell it, but, on the other hand, after years as a sole trader myself and as a business mentor in my local community, I do have to say that one of the common problems that is raised again and again is this compliance issue—this conversation with Government agencies, and the repetitive nature of it.

There is a lot of common sense behind this piece of legislation. On the other hand, New Zealand First is worried about several points that do need to be raised this evening. This bill is necessary for the furthering of the business numbering scheme started in December 2013. In that short time there has been a huge and broad comprehensive uptake from New Zealand companies, as has been mentioned several times tonight—approximately 1.1 million companies, which reflects about half a million actually operating, active companies at this moment.

This bill would move this number beyond these registered companies, and take it into the realm of small business—sole traders, partnerships, and trusts were mentioned. New Zealand First believes they should be active participants in this scheme. We would suggest to the business community itself that it is a commendable and necessary system. Why? Because its ultimate goal is to ensure that there is an improvement in efficiency in business. This bill and its numbering system are about improving the interface between the Government and said business. So when the goal is to make conversation between the Government and companies—and now small businesses, like sole traders—that little bit easier, then New Zealand First will lend its support, especially if that conversation, which most small businesses dread anyway, does not have to happen again and again, almost ad infinitum, with Government department after Government department.

This bill has arisen primarily from the Government’s laudable goals about meeting Better Public Services targets, particularly result No. 9. This specifically means that the Government should aim to reduce the cost for businesses of having to deal directly with the Government. This Business Number initiative was one of the first initiatives arising from the Better Public Services targets, which is great to see.

But I tell you this: New Zealand First nearly did not support this bill, even through to this stage in the House. Here we have on the one hand the Government telling businesses that the only way that this initiative will work is with rapid and broad uptake and that providing a better Public Service requires businesses to commit, and then, on the other hand, I have here before me this document. I hope it was not the New Zealand First copy issued by the Government, but this is the regulatory impact statement that I was provided with, and this is an example of several of the pages provided in the regulatory impact statement. I have shown this evidence before the House, and the particular page I have shown is a device used to measure the efficacy of such pieces of legislation, and what is the first thing that I notice? These blacked-out pieces of paper that run all throughout the documentation, with no explanation.

Again, I hope that this is not just the one that was given to New Zealand First, but, on the other hand, I hope that this is not indicative of the information provided to the Opposition and to the New Zealand public. This page, which is one of many, is supposed to show us the building of this New Zealand Business Number system and Government agency uptake.

What this actually shows us is a Government that is not transparent, a Government that is not willing to engage, and a Government that does not understand the meaning of arrogance. What this page shows us is a Government that is not prepared for us to see the Government agency uptake or, perhaps, the lack thereof. What is it exactly that we are not seeing? How can the Opposition and how can the public understand just what this legislation will achieve, or hopes to achieve, if this kind of information is the case? We know that business will want to have this legislation tidied up. It still needs some work, and perhaps as we move forward the information provided—or not, as the case may be—will become available to the Opposition and to members of the public.

Despite redacted info, and despite issues around its current form in terms of the bill itself, New Zealand First can see that the intent of this bill is sensible and reasonable, and so supporting it through its first reading is a practical step. We hope that then everyone will understand just what it is that the Government hopes to achieve, but that will mean that this Government actually needs to engage and work and talk with the New Zealand public.

The problem that this bill seeks to address is that Government agencies currently take a siloed approach to dealing with business. This results in duplication and inefficiencies. So legislation that seeks to remove duplication and inefficiency is to be commended. However, New Zealand First would add its voice to the concerns raised around privacy and, in particular, the privacy of individuals, whether they are sole traders or partners in a business. This Government’s recent track record around the implementation of good and sound legislation has, in my opinion, not been that solid. Here is another bill where getting it right from the outset is absolutely critical in order for the stated outcomes to be achieved, but there also needs to be consideration and finely crafted legislation that allows the work to be done but with the privacy of the individual being paramount. So the data collected must be for business purposes only. Some of the members on this side of the House spoke in quite a lot of detail about privacy, and I would support that further consideration.

Businesses want joined-up Government services and certainty and less confusion when interacting with the Government. They want an economic infrastructure that better enables and supports their business. This must be foremost in the minds of the select committee members and the Minister as the bill proceeds through the House. Let this number not be just yet another number that businesses have to record and use to interface with Government department after Government department.

New Zealand First also sees this piece of legislation as an opportunity—an opportunity to crack down on the abuse of the bankruptcy system in this country. There are too many examples where individuals are getting away with too much and they are not being held to account. We hope that this legislation will ensure that individuals will become accountable, and we would suggest that this could be done, at least initially, by linking the business number to the insolvency register, for example.

New Zealand First will support this bill through its first reading, and we ask that this Government please keep in mind its promise of open transparency, and that it is also mindful of the individual and their right to privacy. Thank you.

I am pleased to stand to take a call on this first reading of the New Zealand Business Number Bill. I am actually quite pleased to speak after the previous speaker, Fletcher Tabuteau, and, in fact, other members who have spoken before, because I think this bill is being given the due consideration already in its first reading that it deserves, particularly as it moves towards the Commerce Committee.

I think no one is philosophically opposed, as I can hear it, at the moment against the notion of having a singular number to identify a business. There are naturally some questions that are arising around privacy and how that will be handled, but I think we on this side of the House are very proud of the National Party’s engagement with business, be it large, medium, or small. I know that over many recent weeks, that enthusiasm—in particular, by the small and medium enterprises—has been shown by the countless questions given to the Hon Craig Foss and an attempt to continue to show the really good work that National proudly does with small to medium sized enterprises. I welcome more questions, not only from this side but, of course, from the Opposition, once it has finished reading and working out what it is all about.

What I have to say as the MP for Tāmaki is that I am very fortunate to have a number of business owners in the electorate. Tāmaki is not a place of a number of businesses running per se, other than the usual likes of restaurants and cafes and various activities, but a lot of Auckland business owners are there—

💬 Andrew Bayly: A great place.

A great place, indeed. But although they are pleased with what is happening within governmental procedures around business, they still want more change. One of the fundamental areas that comes up is how we can work better in a digital developing environment. I think one of the key elements of this to make it happen—I am going to use two analogies in this speech—and to make businesses more effective and efficient in a digital environment, is through the likes of a single business number.

The first analogy I would draw the House’s attention to is obviously in the health sector. As the chair of the Health Committee, it is something that I am interested in, the notion of a national health number. We have had that for a number of years. I think it is very analogous to this bill—the ability to have a single number that enables the Government and others to identify a particular person or entity and, in the health context, of course, to provide the care that is necessary. Like anything that comes down to a singular number, it often becomes very concerning how it is going to be used or misused. I think if we look at the health example, those issues really have not come up.

In fact, in more recent weeks—and if it is slightly tangential, I hope the House will forgive me—in the Health Committee we have had a series of questions raised around privacy to do with the Health (Protection) Amendment Bill and the notion of contact tracing. So if someone has an infectious disease, how do you reach out and make sure that those who have been infected are well looked after and identified? Some people were very, very concerned that using a single number, the National Health Index (NHI), may actually breach someone’s privacy, but expert after expert, lobbyist after lobbyist, said that, actually, the NHI, this particular single number, is an incredibly strong factor, if you will, enabling us to provide good and right care, and that it has in the past been rightfully used.

So I think, in terms of the New Zealand Business Number, this bill, and the concerns of privacy, we can turn to the health sector and see an example there of something that is working rather well. The other element—another metaphor comes in this case from the Ministry of Social Development, in which I worked for a number of years. So many people come into that department, again, with a single number, or are meant to come into the department with a single number. First and foremost you treat them as an individual. They come before you as a Mary Smith or as a Joe Jackson, and you engage with them there. But as we move, again, into a digital environment, you need a number to enable them to access the systems.

I mention that because, again, like the health number, it is a way to identify, but what is also important—and I think this Government is clear on it—is that you also need the systems in the background. In the Ministry of Social Development days, if someone came in through Work and Income or StudyLink, you had two computer systems to deal with—the old DOS-based system called SWIFTT and simultaneously a new Windows-based system called, I think, UCV2. The irony of someone working on the front line was that if one single person came in, even with their client number, you still had to use two completely different systems to try to work out their full and correct entitlement. So I use that as a caveat around this bill that although we move, quite rightly, to a single number to identify businesses, I think that, from my experience, we want to make sure that the systems in the background are appropriate, because there is no point in having one New Zealand Business Number if we are going to have a multiplicity of systems in the background—it will just confuse things.

When I go out into the electorate or travel around the country, businesses want to work more efficiently. They want to, ultimately, save costs, and we as consumers want to see costs saved because if the business is doing well and can produce something more cheaply, then, paradoxically, we get it cheaper, as well. Businesses have been asking for a while now for this single business number, something that they can just use if they want to call up the Inland Revenue Department, or if they want to call up Work and Income, if they are taking a young person on, say, for a role through the myriad of activities we have there, so the business owners can ring up and be instantly identified. They know exactly what clients are involved. If they are going to be calling up even something like the Commerce Commission—I am not exactly sure how far this Business Number will be shared across Government departments. I am looking toward the chair of the select committee, Melissa Lee. I am sure that is something that we will be looking at as a select committee as this goes through and asking what Government departments will be using and accessing this number. How will they be interrelating? But it is very clear, when I have talked to my constituents back in the fine seat of Tāmaki, that they want something like this, the ability to just call up.

Some have noted already—and it is more in their personal context—that they are using the RealMe system. Without being too advertorial, it is where you basically go down to the post office, or the like, and sign yourself up for a digital identity.

💬 Kris Faafoi: If the post office is still open.

I am very happy to say that post offices are still open, thriving, and well loved in my electorate. I cannot speak for that honourable member’s, but they are incredibly well loved. I have to actually thank New Zealand Post for the engagement that it is giving. I believe, actually, that it is a former member of that party who is the chair, is it not? Is it Michael Cullen?

💬 Hon Craig Foss: He’s been closing more than he’s opened.

Oh, he has been closing more than he has opened. That is very interesting. But anyway, we digress—we digress. We were talking about RealMe. Again, it is an ability for individual New Zealanders to go down to establish their digital identity, which means they can walk into a bank, for example, or certain New Zealand Post services, the Inland Revenue Department, and other places to actually access their services. That is exactly analogous to the New Zealand Business Number Bill that, actually, a range of New Zealand businesses, large and small, will be able to seek a number so that they too can most primarily, I would suggest, go online and access the services that they need.

This is part of the Better Public Services agenda of this Government. It is something that the Government has been following right since it was elected in 2008, and something I have been pleased to be associated with since being elected in 2011. It is Result 9, for those boffins who are very keen to be looking at the documents, and I am sure Megan Woods is on to it now. She is going to be going through that paper looking for Result 9. [Bell rung] Excellent! For whom does the bell toll? We are here to deliver better public services—

💬 Dr Megan Woods: Come on, you can do ten. Keep going.

We are going to do our best, you see. It is all about numbers, you see. Ten is important. It is around Result 9 where we are delivering better public services to business customers, and one of the goals we have given to ourselves is to reduce the cost to businesses dealing with the Government by 25 percent in 2017. That is only 2 years away. It is something we are very keen on.

The business number system is for a range of groups in New Zealand. As we said, it is obviously a unique identifier primarily aimed at the corporate and public entities, and those that are unincorporated. There is a bit of talk in the bill around natural persons. In other words, if you have established a body corporate, I assume, or sole trade in a different name through your trust arrangements, those too can obtain a Business Number. I think, quite importantly too for those New Zealanders who operate multiple sole-trading corporate entities and the like, they will be able to obtain several numbers for those entities. Again, the whole purpose of this bill is to make things easier.

We do note, because it has not been picked up by other speakers, that there is a whole area within this bill around offences. It is one thing, obviously, to put something in place, but when you are making laws, making changes, for something as important as business, you need to make sure that people are using these systems appropriately. We have seen with other legislation in the House, particularly in the digital or the e-commerce space, that it is a new area and it is fraught with difficulties, so the bill at the moment is noting that a person who commits an offence and who knowingly uses a number that is a false New Zealand Business Number without a reasonable excuse could be subject to a maximum penalty and conviction of up to $250,000. Although I can see Opposition members smiling, that is incredibly serious and none of us would want to fall into this area.

There are also offences for people who make or give authorised statements or documents to the registrar that are false. The integrity of a system like this is incredibly important. It is like the integrity of the Government—the people know that that is fine and secure; that is why we continue to ride high in the polls. But it is the same around the things like RealMe. It has been the same as I talked at the start around the National Health Index number, and so forth. People need confidence in the system. So we are very keen—very keen—that that confidence remains. I am conscious of time. The numbers are against me. I sit down.

Tēnā koe, Mr Assistant Speaker. Tēnā koutou e te Whare. The Green Party is supporting the New Zealand Business Number Bill. As members of the House will know—I am sure they listen very closely to Green Party speeches—the overarching aim of the Green Party’s economic policy is to facilitate a transition to a smarter, greener, fairer economy—one that ensures that future generations will have all the benefits that we have, and one that ensures that every person in New Zealand has every opportunity to be the best they can be and are not undermined by, for example, a lack of money on the part of their parents.

Contrary to what our opponents claim, I would say an important part of this transition is fostering strong New Zealand businesses, particularly those that work to support communities and the environment. We want to ensure that they are able to do so, and that they are not undermined by competition that undercuts them by increasing pollution. To that end, I would say the Greens would be very supportive of any initiatives that reduce the time and costs of doing business without compromising those higher-level goals of creating a greener and fairer New Zealand.

This bill, on the face of it, looks like a smart initiative that should make doing business easier and more efficient, especially for small to medium sized enterprises—we think they are quite important. Assigning businesses one unique identifying number that can be used for a number of different purposes is a sensible way to reduce administration costs and make it more efficient. It should make it simpler for businesses themselves to interact with Government agencies as well as with each other. It could enable Government to better collect and share information that would enable targeted services and policies for business.

We do, of course, have the same concerns that have been expressed by other members here in the House tonight about the impacts on privacy, particularly as this Government, the National Government, has a poor record. We have seen a couple of Ministers release private information held by Government agencies just to score political points. We have some real concerns about what that could mean, having this unique identifying number. Greater interaction between sharing of data means that the system becomes a little less resilient. There is this trade-off between efficiency and resilience, generally, and so although we will have something that is more efficient it is more susceptible to breaches of privacy and, potentially, hacking. I note from the regulatory impact statement that the Privacy Commissioner thought that most of the privacy concerns, for example, could be addressed. That is something we will be looking at very carefully and closely during the select committee process.

The devil really is in the detail as to whether or not this will pay off. Obviously, there have been other moves towards centralisation like, for example, the Auckland super-city merger, which was supposed to deliver benefits, but in fact has made the bureaucracy ever more unwieldy for your average citizen to deal with. So it all depends on how it is implemented, and I think we will have to watch the submissions in the select committee carefully and explore the different opportunities. I am sure it will be an iterative process, if the bill is passed, of learning what works and what does not work.

I would say that the opportunities provided by getting Government agencies to not be so siloed do not just apply to administration and the savings costs. For example, in this bill, according to the regulatory impact statement, we might see something like $30 million to $50 million in savings. When you spread that out across the entire economy, that is not really a huge impact. I would say that the Green Party is interested in finding even bigger savings for businesses and households in New Zealand. The big ones are transport, buildings, and energy. If we did those things smarter—and we have the ability to do that—then we know we could save billions of dollars each year for businesses and households and reduce environmental pollution. I think surely those sorts of win-wins are achievable in policy and are something that should be pursued by this Government if it genuinely believes in long-term sustainable economic development that looks after people and the environment.

So although we will be supporting this bill, I think that a smarter, greener approach to policy across the board would deliver much greater savings to business and households here in New Zealand and ensure that we protect all the things we really love about New Zealand well into the future. Thank you.

💬 Brett Hudson: Mr Speaker.

💬 Jacinda Ardern: Mr Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Jacinda Ardern.

I am sorry to disappoint the member Brett Hudson; I will be taking a call on this bill, on the New Zealand Business Number Bill.

I think it is important when discussing a bill like this that we keep at the top of our minds the context in which business is operating. It is with some, I guess, irony that we are debating this bill, which is meant to be about improving the ease of doing business and improving outcomes for business, when we are so close to a Budget that was trumpeted by the Government as the Budget that would return us to surplus. That, therefore, would demonstrate to the nation that the economy is in good heart, that the books have been balanced, and that all is well in never-never land. That is not going to be what this Budget delivers.

We are now hearing from a Minister of Finance, the one in whom the businesses are meant to hold great faith, who is the same Minister who stood up in this House today and likened balancing a Budget to weight loss, which I found extraordinary. So, apparently, if you set a goal of losing 10 kilograms but you reach only 9 kilograms, that is the same as a Budget surplus not being reached. Well, you cannot be a little bit pregnant, and the difference for business is that if a business is not able to balance its books, then it is not just good enough that it had a go at it.

💬 Melissa Lee: Business numbers. It’s an identifier.

So I do think it is important that the context be considered, because in the Cabinet paper small businesses, Melissa Lee, that were asked about what they thought about the business number legislation, which the Government is now passing in this debate, said, actually—and this is relevant—that it was not the biggest issue for them. So that is absolutely relevant. What is relevant to them is whether or not we do have a well-performing economy that means that their business is doing well within that context. That is what they want their Government to focus on. That is an important measure; it absolutely is. Minister Foss knows, because his officials were the ones who prepared that document and said: “Well, when we consulted with small business, they weren’t convinced”—they were not convinced—“of the benefits it would bring for them.”

I can see why they would say that, because when you come to Part 1 of the New Zealand Business Number Bill, it sets out in its preliminary provisions the main purposes of the bill, which include to “ … enable businesses in New Zealand to interact more easily with government; and (b) reduce the costs of business transactions in New Zealand; and (c) establish and maintain a New Zealand business number register … ”. There is very little detail on how that will explicitly deliver some of the cost savings that the Government has been trumpeting since year dot—very little detail on that whatsoever. Yet if you directly compare that with some of the really tangible things that have been put forward by members of the business community or the Institute of Chartered Accountants, they have said: “Look, if you want to look for things that will enable business to interact more easily with the Government, that will save them time, that will save them money, adopt some of the proposal that the New Zealand Institute of Chartered Accountants put up before the election.” They included things like no more than 1 hour, no more than one form, making it really simple to file for the tax purposes of the Government. They have set out some of those ideas in a really simple way for the Government. That has not been picked up.

So if there are things that the New Zealand Business Number is going to deliver, which we can tangibly say will deliver X amount of time savings, I am pretty sure small business would like to hear about that, but that is not explicitly contained in this bill. There are probably already areas where we could be sharing information without having just that one number. I know Xero, for instance, has been putting a case to the Government over things like allowing Xero to be used as a way of channelling all the information that Statistics New Zealand wants directly from Xero—a platform that so many small businesses are using—to the Government. That would be a massive time saving. Allowing Xero and things like Mind Your Own Business, for instance, to speak directly to the Inland Revenue Department would make a massive difference to those small businesses.

So, yes, we are willing to explore this. We are willing to send the bill to the select committee. You are trumpeting a big game here. Let us see what the bill is going to deliver, but do not do it at the expense of some really practical ideas that the Government could be delivering on now or at the expense of the bigger picture, which ultimately is an economy that is delivering for our businesses.

It is an absolute joy to rise to speak in support of the New Zealand Business Number Bill in its first reading. For the benefit of the speaker who has just resumed her seat, who is a bit worried that doing this to help business might come at the expense of doing something else, well, seemingly unlike the Labour Opposition, this is a side of the House that can walk and chew gum. We look forward to doing a number of things, not just one at a time. This New Zealand Business Number is really in part about the Government’s agenda of delivering Better Public Services to New Zealand. It is an absolutely measurable and concrete way of driving better value for New Zealanders, reducing compliance for businesses, and making it easier for people and for businesses to engage with the Government.

This is a really simple concept. If you have a business, whether it is small, medium, or large—but there is a greater compliance cost on small and medium sized businesses, I think everyone would argue—that business has to interact with a number of Government agencies. We have picked just a few, just off the top of our heads. Obviously, there is the Inland Revenue Department, and if your business perhaps is employing a very varied workforce you might have Immigration New Zealand contacts, you might have department of labour contacts, you will have ACC, you have got the Companies Office—any number of Government agencies that even a small business or a medium sized business may be obliged to have dealings with.

If you have got a situation where with every one of those agencies you have to have a unique and different identifier, then it boggles the mind that anyone could suggest that you need some sort of scientific methodology, rationale, and proof that somehow having one identifier across all of them could be anything less than more productive and more cost saving than having a different identifier with every single one of them. This is exactly what this bill is delivering. It is delivering the one identifier that a business can use in every dealing it has with any Government agency that it chooses to, or has to, have dealings with.

That is a simple concept to grasp. It is something that will certainly be grasped very readily by small businesses to whom, I would argue, the constant interaction with Government agencies is more of a bane than a boon to them. The idea that this will streamline those interactions is something that businesses will welcome, and we are very, very pleased to be delivering it for them.

One of the things that I think is very, very important about this, and I would make a note about the previous speaker from the Greens, Julie Anne Genter, who raised issues of privacy. One of the good things about this is that supplying their core information once, that information, the core information about that business, will be shared with other agencies, and the business, if it needs to make an update, will be able to make the update once at its preferred point. No longer will it have to advise every Government agency about a change of address or some subtle change in purpose that the agency might feel is important. The business will do it once at the agency of its choice, the one where it likely does most of its business. It could be New Zealand Post. That is a possibility. It will make that change once and that will proliferate across the agencies that access that New Zealand Business Number.

The issue about data privacy, I think, shows that the members opposite do not understand the data that is actually going to be captured behind the New Zealand Business Number and that is going to be shared. That data is the legal entity name, its registered address, a location identifier, a start date, the type of entity that it is, and its business status—whether it is active or inactive. There is not a great hacking potential in that data. Businesses are not storing their customer addresses. They are not storing their receipts. They are not storing their inventories. They are not storing the heart of their businesses. They are saying they are an active business, based at this address, and here is their number. [Interruption] Well, sure. I mean it is a bit of a worry if the hackers want to get in and have a look at that.

So you have got to wonder whether the Opposition members actually understand the information that is going to be captured and shared, because based on what they have been saying tonight, it does not look to me that they do.

But the point on this is also that although we are expanding in this bill the New Zealand Business Number eligibility across a broader range of business, it is worth noting that we have actually already allocated about 1.1 million of these numbers to registered companies to date. In fact, we have got a reference group of about 1,200 small and medium sized businesses that we have been tracking progress with on the New Zealand Business Number and how it has been working for them. The reports over the last 6 months or so have reported back a net 7 percent reduction in reported effort in their dealings with Government agencies since 2012.

So here we have it. We have got a reference group—actual businesses operating in the real world—using the New Zealand Business Number. Their reports show, and their feedback to the Government shows, that this has had a net 7 percent productivity gain for them in terms of their—well, a net saving for them in terms of their interactions with the Government since 2012; that is a better way of putting it, I agree. That is definitely a very, very positive thing for them to have experienced. I tell you what: if I were the member opposite and I had a business and someone was offering me a 7 percent saving, I would not be saying: “No, give me something more. Take this one away.” I would be grasping it with both hands while doing something else as well to further improve my business.

💬 Chris Bishop: You understand business.

Well, thank you, Mr Bishop.

But I would just like to say in concluding that Opposition members have also made a comment that is just a small thing. And at an estimate of $30 million to $60 million in savings set against the entire economy, you could say that is a small thing, just as you could say that half a billion dollars out of the entire GDP of New Zealand is a tiny thing as well. You could say it is a very small thing, but it is part of a larger plan. It is not one thing solely in isolation; it is one thing that is part of a plan. Like in our Business Growth Agenda, for instance, there are between 350 and 400 initiatives in that plan that go together to improve business outlook and promote growth and growth in employment as well.

So this New Zealand Business Number is part of another plan. We have already seen things for small and medium sized businesses like www.business.govt.nz, which is a bit of a one-stop shop for what a small or medium sized business needs to consider when setting up and operating, or growing, a company in New Zealand in respect of its interactions and compliance obligations with Government agencies. Within that is a thing called Compliance Matters. This is a tool that sets out for those businesses exactly what their compliance obligations are, and points them in the direction of what they need to do to make sure that they are compliant.

So let us take this in context. The New Zealand Business Number on its own is not the only thing that this Government is doing to support small and medium sized businesses. It is part of a much broader plan both for small businesses and for business as a whole to promote economic growth in New Zealand and to help to raise confidence and results in our businesses that lead to greater employment, as we have seen in the past 12 months and earlier. I commend this bill to the House.

Thank you very much for the chance to speak to this bill. I am looking forward to this bill going to the Commerce Committee because it has been some time since we have dealt with a piece of legislation of any weight—not that this piece of legislation is of any weight. As we have said on this side, when you look at what it does and the 7 years of Government that this party has behind it, and the fact that we are 2 weeks out from an election—

💬 Carmel Sepuloni: From a Budget.

—from a Budget, sorry—I wish it was an election—shows just how tired this Government is. Two weeks out from the Budget, this is as good as it gets—a plan to expand the national business number out beyond what has already gone out to the public. It is, as Dr Clark said in his speech, a laudable effort to try to make the interaction between business and Government as efficient as possible.

We have heard from both sides of the House about what kinds of savings we are trying to get to make business interaction with the Government more efficient. But some of the numbers still need to be fleshed out. You have got to think of it in the context of what is being promised, and what will actually be delivered. Steven Joyce, in his opening remarks, said that this piece of legislation will look to reduce the compliance cost of business by about $60 million. That is nothing to sniff at. It is a sizable amount of money.

But I think small businesses in New Zealand, 2 weeks out from a Budget, are looking at more than the extension of the national business number programme. I think they will be scratching their heads and thinking: “My God. Is this all this National Party has, 2 weeks out from an election?”.

💬 Carmel Sepuloni: From a Budget.

From a Budget—ha, ha! I will get that right eventually.

I would like to sympathise and empathise with some of the things that James Shaw has said because, as he said in his speech, as a freelancer—I have experienced being a freelancer as well—from time to time you can get slightly frustrated with the amount of red tape and interaction you have with Government departments. We will look to the select committee to flesh out, I guess, some more of the details as to what will be the real benefits to the sole traders, to those other small businesses that this national business number may be extended out to. The select committee consideration will be very interesting.

I also want to touch on something that Fletcher Tabuteau said. He talked about the lack of information and the abundance of redaction in the regulatory impact statement. That starts pretty early on in the regulatory impact statement. There is a table, at point 5. For the benefit of those at home, watching at 9.33 on Tuesday night, the line above the table says: “The table below outlines the net benefits of the preferred options.” As you can see, it has all been redacted. So maybe—

💬 Dr Megan Woods: Blankety-blank.

Yes, in the words of Annette King, it says: “Blankety-blank, blank, blank, blank”. Those are the net benefits of the preferred options of this bill. What is so secret that the Government wants to redact even the net benefits of its preferred option of this bill? What is going on, when the Government wants to redact the net benefits of this extension of a 13-number programme? You have got to ask some serious questions about that.

There are also some questions that we will be asking around the costs that are incurred in this bill, because we have heard that $60 million figure from Steven Joyce. But, again, in the regulatory impact statement—and if you will let me take some time to read point 127. For some reason the number 127 has been redacted, but the point has not been redacted. I do not know what is so secret about the number 127. I will read it—I am assuming this is No. 127—below this redaction: “The benefits to business of the NZBN will only be realised when government agencies change their existing systems to allow centralised registration of businesses and maintenance of their business details through the NZBN system.” I will go on to the second page, which says: “Government agencies will incur costs in making these changes. It is not possible at this stage to quantify these costs. In many cases it may be possible to absorb costs within planned upgrades of agency systems.”

There are two questions I have here, for when we get to the select committee consideration. Can we please get an idea of what it will cost to change the systems within the multitude of Government departments? If it is a huge cost, and we are looking at saving roughly $60 million for these businesses, or more, then from my maths that simply does not make sense. There is a track record for this Government when it gets involved in multi-agency, complicated changes to IT systems.

💬 Hon Todd McClay: That’s not true.

Well, it is true. If you would like to dispute that, get up and take a call. But it is true. This Government does not have a good track record. Let us look at some of the IT projects of note recently that it has bungled. The Inland Revenue Department—who is in charge of inland revenue? The member just over there, who said: “That’s not true.”

💬 Chris Bishop: That’s not fair.

You might think it is not fair, Mr Bishop, but unfortunately it is true. It is true. I can see how the member might think that is unfair, but unfortunately his actions and the actions of that ministry, and his decisions, are going to cost the New Zealand taxpayer millions more, which they should not have to pay. There are also other things that have been mentioned by other speakers, and I would like to talk to the point around privacy. This regulatory impact statement also talks to that.

Again, and I am talking about the rolling out of IT programs, this Government does not have a good track record when it comes to the privacy of the private information of New Zealanders. What department is that? Oh, it is Todd McClay’s department again, the Inland Revenue Department. Of course, it let a whole spreadsheet list go—just flicked out in an email the details of hundreds of New Zealanders and their Inland Revenue Department details. The department just nonchalantly emailed them out into the public. Then of course there was the Ministry of Social Development. Someone just wandered into one of the offices, went to the publicly available booth, and helped themselves to a lot of information. There are some serious questions that need to be asked in the select committee consideration around the safeguards and the privacy of information to make sure that this Government is getting right, because in the past it has got it so, so wrong.

This bill, as I said, tries to achieve a laudable aim in trying to make the interactions of businesses and Government departments more streamlined, so they can save money and therefore invest more money, pay their staff more, or enjoy more profit. The example of New Zealand Post has been raised by a number of speakers on that side of the House. I just want to take this opportunity to talk about one local example of where this Government is saying one thing and is doing another. I held a public meeting recently about the future of the Raumati Beach PostShop, which this Government wants to close down.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I am going to invite the member to bring his point back to this bill.

I will. In the front seat of that public meeting was a local businessman who wants to make his life easier with a State-owned enterprise, New Zealand Post. But this Government, in demanding more of a profit from New Zealand Post, is forcing the likes of community post shops in my electorate, in Raumati Beach—which is not the strongest Labour safehold area in my electorate. In fact, the businessman who spoke to me saying “Well done for bringing up the issue.” said he did not vote for us, but he is unhappy with this Government and the fact it is extracting more profit out of New Zealand Post and closing down a very important piece of infrastructure in his community, the local post shop, so now he will not be having that efficient interaction—

I really feel for the member Kris Faafoi having to interrupt such a wonderful discourse of—whatever.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I did terminate the member’s speech for being irrelevant. The member is inviting me to do it very early to him.

Thank you, Mr Assistant Speaker, for that direction. Can I begin by congratulating the Minister for Economic Development on bringing this bill to the House. Actually, as a businessman—or certainly a former businessman—having dealt with the Inland Revenue Department and all of the other Government agencies, I think this is very welcome news. It does not surprise me that, as has been claimed by the other side of the House, small businesses do not recognise the benefit to them of a bill like this. Often small businesses are so mired in the day-to-day running of their businesses that they do not particularly think of these things and they do not recognise the benefit of them until they are actually upon them.

I have had experience with a business number, not in New Zealand, but with an Australian part that we had to deal with in my wine business. Having a business number over there absolutely made things a lot easier. It seems to me that it is nonsensical that we have not had one up until now. These little things that Governments do from time to time, which may seem boring and not earth-shattering, do make a difference, and they do move businesses forward. Those little parts of the New Zealand economy are actually what drives New Zealand on. It is not the big businesses, as important as they are to New Zealand’s economy. It is the little businesses that impact on most people in New Zealand, so it is incumbent upon us to allow them to be as efficient as possible. The New Zealand Business Number will do that.

I think one of the big things with this bill is, actually, how they are going to maintain the New Zealand Business Number Register. That register is going to be kept by the registrar appointed under the bill, and it will contain only business-related data. Certain primary business data contained on the register for the entity must be publicly available as follows. “[In] the case of a corporate or public entity,—(i) the data listed in Part 1 of Schedule 3”, which is “Legal entity name; Registered address; Location identifier; NZBN; Start date; Kind of entity; Business status (eg, active or inactive)”, and “(ii) any data prescribed by regulations that the entity elects to make publicly available or that is otherwise available on a public register;”. “[In] the case of an unincorporated entity,—(i) the data listed in Part 2 of Schedule 3”, which is “Location identifier; NZBN; Start date; Kind of entity; Business status (eg, active or inactive)” and “(ii) any data prescribed by regulations that the entity elects to make publicly available.”

That all sounds like pretty mundane stuff, but I can assure you that once you have filled out this information once and then you have to do it again—and sometimes four or five times in a day—it can become pretty tiresome. For a small business—and this will be rolled out to sole operators in time—it is going to make a tremendous difference and free them up to do what it is we as an economy want them to do, which is get on with business. That is what enables us to enjoy the lifestyle we do as a country and enables us to have enough taxes to look after those people who cannot look after themselves, which is something that many on the other side of the House claim to champion.

I note that there are already 1.1 million businesses that have a New Zealand Business Number, so this has already begun. This bill simply enables it to be rolled out more widely. I think the small businesses are, quite rightly, the ones, as I said, that need to come on further with this. It will enable us to build a more competitive and productive economy, which is something that we all benefit from, so I cannot see anyone having any issue with that.

Lifting business confidence is also part of the Business Growth Agenda, which this all ties in very neatly with, and addresses issues that matter most to firms, particularly building export markets, building capital markets, building innovation, and building skilled and safe workplaces. I note that this ties in, also, with the Financial Markets Conduct Act, which allowed crowdfunding to come in. This all ties in with this New Zealand Business Number because, actually, that has been a great source of capital for small businesses, and they have been able to raise funds—in fact, up to $2 million—that way.

💬 Carmel Sepuloni: Relevance?

It is great to be able to have all of this pulled into the bill, because the New Zealand Business Number enables all of that information to be equally shared. I think that is really important, so it is very relevant.

Labour market statistics show that self-employed businesses grew by nearly 35,000 in the year to December 2014. If you think about that, there would be at least one person involved with each. I do not know what the average size of small to medium sized enterprises is in terms of people involved with them, but I would think it would be seven or eight people maximum—[Interruption] Twenty, is it, and then right down to one. I would say that the average would be three or four people, so that is a lot of people involved in those businesses. So there is a significant increase in the numbers of people involved in small to medium sized businesses.

A lot of small to medium sized businesses fail in their first year. I guess there is an element of Darwinian selection there, and that is as it should be, because not all businesses will survive—[Interruption] Absolutely, but it is a great thing to get these businesses up and running. One of the things that new businesses often struggle with is the day-to-day management of their business—their data, filling in all of this information—so it really is a great step forward, this bill, and with our 3.5 percent GDP growth that we are running at the moment it is enabling businesses to grow across the whole economy. I am sure that is something that the other side of the House will be delighted about—that we have a Government that is focused on business, focused on growth, and focused on making those businesses able to get as much profit for the amount of work that they do.

So it is with great pleasure, on that note—[Interruption] And with all the support I am getting from the other side of the House, I commend this bill to the House.

Bill read a first time.

Bill referred to the Commerce Committee.