New Zealand Business Number Bill

I am pleased to rise on behalf of New Zealand First for the second reading of the New Zealand Business Number Bill. I want to thank the officials, who worked well with the Commerce Committee. They showed their patience and their commitment to work through the hooks and the snags that this bill had in order to get it back into the House tonight. The select committee received 14 written submissions, and we listened to five submitters. There was only one sole trader and there were no small businesses that came forward individually, and that actually really surprised me. It really amazed me, because we all know that small businesses are the backbone of New Zealand’s economy, and they have also made a significant contribution to our economy. The New Zealand Business Number Bill will definitely affect them, and I will speak about that shortly.

My fellow member Fletcher Tabuteau outlined at the first reading of the New Zealand Business Number Bill that New Zealand First could nearly—nearly—support this bill, and he went on to outline the Government’s laudable goals. The New Zealand Business Number Bill is one of the initiatives aimed at the Better for Business – Result 9 commitment to reduce costs for businesses dealing with Government agencies through a reduction in effort of 25 percent by the year 2017. We have all heard in the House that this bill aims to reduce the time and money that eligible entities spend on interacting with Government departments by allowing eligible New Zealand entities to obtain or to be allocated a New Zealand Business Number. This is, simply, a unique identifier, and it is to be used for all interactions with Government departments.

New Zealand First thinks that cost savings for New Zealand businesses is a positive direction for any Government with good common sense to take, and we have supported the intent of this bill in its first reading, with the reservations spoken by Fletcher Tabuteau. However, actual reductions in cost savings for sole traders and small to medium sized businesses have failed to materialise, and, in fact, this will actually cause costs to sole traders and small to medium sized businesses in the short term. New Zealand First really does want to support this bill to its third reading—we really do. However, this is a bill that has put the horse before the cart.

The idea of a single business number is not new. It has been around for years, and it is not the first time that this Government has attempted to sort it out, either. I suggest the reason that this Government has failed to successfully do this is that it has not actually done its homework, and it has failed. Added to that is the inadequate resources from the Budget to ensure that this bill becomes successful, and with that in mind, it can only fail. All companies registered with the New Zealand Companies Office were allocated a New Zealand Business Number in December 2013. This seems workable, and to the best knowledge of the Commerce Committee, it is working well, but now this allocation is extended out to all businesses. However, currently there is no single point of contact for the departments that have agreed to use the business number system. So my question is: how does that help those companies now?

New Zealand First is very concerned that the success and efficiency of the bill relies solely on Government departments committing to it. As it is, there are only a limited number of Government departments that have said that they will actually take this up and roll out the New Zealand Business Number. The concern is that there is no time line put in place for all Government departments to come into line and ensure that they collectively come together and work on this and pick this up. Without this, it seems quite natural to me that the outcome will be that this will become another business overhead to businesses, and instead of being part of the Government’s key goal to cut back red tape where possible, the Government will, in fact, end up increasing business overheads rather than minimising them. Again, to me, that is putting the horse before the cart.

I want to say that I actually get it. I get that big businesses have been advocating for some time for a more streamlined approach to connecting businesses to the Government and for the implementation of this unique identifier, which, effectively—for those at home who are not sure what that is—is a 13-digit barcode. There is a similar system working in other developed countries, and I understand that it is intended that key businesses and the data about each business will be attached to this number, and some of it will be accessed by the public. I have looked into what other developed countries, such as Denmark, have used. They have a personal identification number, and that is used when they are dealing with public agencies. It is also used as a personal number in banking business and insurance companies, and it works really well. The reason that it works really well is that it has had the correct infrastructure from the get-go. Another country I looked at was Singapore. It has a Unique Entity Number, and that is used for all entities—for business, for companies, for societies—that operate in Singapore. It is also used for filing corporate tax returns, and it is also used when you want to apply for an export or import permit. And, again, I will say that it has worked really well from the get-go, because it had the right infrastructure to go with it.

This bill also provides the statutory powers to establish and maintain a register. This bill defines an entity’s eligibility to attain a New Zealand Business Number. It sets a limit on access to information, it protects the security and confidentiality of information, and it protects the privacy of individuals in business. The privacy sensitivities had been a huge concern to New Zealand First, and we are actually quite thankful that the Privacy Commissioner has made a submission on the bill’s privacy provision. Along with the Government Chief Privacy Officer, the commissioner has worked on this provision, and it adds some comfort to New Zealand First that there are now adequate privacy safeguards in place.

Businesses have—and it is no secret—become quite frustrated with the current complicated system, and there is no denying that. My question is: will the New Zealand Business Number Bill, in fact, alleviate that, or will it add to the frustrations further, with the addition of yet just another number? Let us remember, it is also currently supported by only a small number of Government departments, so until the other Government departments come on board, it will not solve the problem. It has been stated that this New Zealand Business Number Bill will phase out the need for the many existing numbers that are currently being used. My question to the Minister for Economic Development is: how is the Government intending to allocate appropriate resources to ensure that this does, in fact, happen? I hope the Minister will provide an answer to my question.

I acknowledge that the New Zealand Business Number Bill intends to help reduce compliance costs in dealing with the Government, with the aim of improving productivity of business and the potential for economic growth. However, New Zealand First believes that utilising the New Zealand Business Number Bill in the current form will not be a cost-effective exercise for businesses. This bill also fails to provide sufficient evidence that the Business Number will enhance a smooth interaction between businesses and Government departments. And, as I pointed out earlier, delivering these outcomes is solely dependent on the broad acceptance of the New Zealand Business Number—that is, by the users. The success of the bill relies heavily on Government departments committing to it and the business sector adopting the New Zealand Business Number. New Zealand First thinks that, in time, this can be possible, but that time is not right now.

In closing, I reiterate that New Zealand First would really like to be able to support this bill, because we generally agree with its broad aims. But, at this time, this bill appears to be somewhat incomplete, and we urge the Government to address the gaps before enacting yet another piece of legislation that is inadequate. When that happens, New Zealand First will certainly look favourably on supporting what is, as I have said, a bill that is good in its intent but that falls short in its mechanics. We would like to see the Government look again at examples from countries around the world that have similar systems, look at what works and what does not work, and fine-tune those examples to make sure they are fit for the New Zealand environment. All Government departments should be required to buy in to the scheme. There is no point in having a single point of contact with all Government agencies if all Government agencies are not part of it. We would like to see small businesses provided for. That sole traders—

Order! The member’s time has expired.

It is a privilege for me to stand here in support of the New Zealand Business Number Bill in its second reading. This bill is sponsored by the Minister for Economic Development, Steven Joyce, and he has done a fantastic job in initiating this and getting it to this point. If there is one thing that business in this country looks forward to, it is an ease of dealing with Government departments.

Between 50 and 60 percent of business details are replicated on over 250 Government forms. For business, that is a huge commitment in time and cost. So I believe that those in the business community will welcome this new Business Number bill and the implications it has for them in providing better service for their companies and for small business trusts and trustees.

This bill is part of the Government’s Better Public Services agenda, and it takes us one step closer to providing better services across this country. There are eight key Government agencies that collectively provide over 700 different services to New Zealand businesses, and around 30 million interactions occur between public sector agencies and small to medium sized business enterprises every year. If there is anything that we can do for these businesses, it is to streamline the processes they have in dealing with central government.

It is my pleasure to commend this bill to the House.

Could I begin by acknowledging the comments made by our New Zealand First colleague, Ria Bond. Many of the reservations she expressed about this bill, we share—the fact that it is well intentioned and a potentially useful piece of legislation, but it will require a rapid implementation. We take a slightly more optimistic view, perhaps, that this Government may be capable of quickly implementing the good intention of this plan. That optimism may be a triumph of hope over experience, but time will tell.

💬 Chris Bishop: No, no—that is good. Very good.

We shall see. The challenge is on Mr Bishop and his colleagues to prove us right in this instance, which I am sure he will enjoy doing.

The notion of a unique identifier is a fundamentally good idea. Anything that facilitates the painless interaction between business and Government is to be supported. In an ideal world, I think each business would have a single point of contact with an agency of Government. Behind that agency would sit the multitude of other Government agencies—ACC, the Ministry of Business, Innovation and Employment, health and safety organisations, and all the rest of them. I think that would be an ideal outcome. That would be something we can aspire to in time, I think—particularly for small and medium sized enterprises, which, as we have heard, are the backbone of New Zealand business. There are over 460,000-odd small and medium sized enterprises in New Zealand, which contribute something like 30 percent of GDP. They are seldom praised or celebrated, and I think they ought to be.

One of the implications of this unique identifier, if properly implemented, is that it would allow for the gathering of metadata about business, business trends, what business is doing, and how it is achieving it, and that would potentially be a very useful body of knowledge and information to inform further policy development. Alongside that, of course, come privacy concerns—quite legitimate privacy concerns. This Government and, dare I say it, previous Governments have not had a particularly good record in terms of protecting large databases or protecting people’s privacy—be they individuals or businesses—but in this instance we are aware that the Privacy Commissioner was involved in the debate and made some contribution to it, and I think the framework of this bill will allow for good privacy protection. Again, it is a matter of implementation and a matter of actually making sure that it is done well and done appropriately.

We share the concern of our Labour colleagues, as expressed in the minority report, and, indeed, by Ria Bond recently, that it does seem that the Government has got ahead of itself with this legislation. It is putting in place the legislation before the necessary infrastructure exists. Nothing will undermine this legislation more quickly than if it simply becomes another number, another form of bureaucracy that businesses are burdened with. It is incumbent on this Government to ensure that this legislation does succeed, because it could, and it ought to, and if it does it will make a positive contribution to the business community—freeing it up to do what it does well: to be productive, to make a useful economic and social contribution. So it really lies in the hands of this Government to actually make sure that it does work.

The Government talks a lot about a whole-of-Government approach. It is talked about more than it is evident, I would have to say. Integration within and between departments, within and between policies and practices, is a worthy aspiration. I am a great believer in an integrated approach to things more generally. Again, we have not seen a great deal of evidence of it. What we have seen is the sort of mashing together of Government agencies into these great unwieldy beasts—and I daresay many people will recognise the Ministry of Business, Innovation and Employment in that description, as it currently exists. Integration is a good thing. Simply randomly stuffing bits of Government together is not.

The initiative contained within this bill could contribute to proper integration and better relationships between business and the Government. It could facilitate successful small and medium enterprises to do their job well, and to do it better than they can now, if they are not chewing up valuable time complying with Government regulation.

It is up to this Government to prove that its reasonably well-grounded legislation can work, and I leave it with that challenge. Surprise me, and do it well. Kia ora.

I am happy to take what is going to be a short call on this New Zealand Business Number Bill. I have to say as I do so that I have some interest in this, because there are 1.1 million New Zealand companies that have been allocated a New Zealand Business Number; only about half of those are active. The company that I am a director of, which has been allocated one of those numbers, falls into the other category—which is those companies that are not active and not currently trading.

But I will, potentially, benefit from this legislation, because one of the things that I have to do as the director of a non-trading company is do a tax return every year. You have to go online to do your return, and, of course, whenever I went to go online I could never remember what my log-on was and could never remember what my password was. So one of the first things the Government did was to give me a new log-on—another log-on and another password—and now I cannot remember what those are, either. This is one of the problems with the Government when businesses want to interact with it—they get another log-on and another password and another number. This, of course, is something that maybe has some promise: the idea that you would have a single number for interactions with the Government. Who could possibly object to that? Except that it is going to be another number, in addition to all of the other numbers that companies already have. It begs the question of why could we not just use one of the many, many numbers companies already have.

Companies already have a company number, an Inland Revenue Department number—you can go through them and count them all. There are plenty of other numbers that could have been used as the single business number a company could use to interact with the Government. It seems a bit crazy that the idea is that we can solve this problem by creating another system. It seems a little bit crazy, a little bit mad, and something that we should certainly do something about.

There are many businesses around the country that are small businesses, operated by one or two people. They are typically—as at least several parliamentary colleagues have spoken about this afternoon—operated out of a kitchen or a van or a garage somewhere. These are people who do not have administrators working for them. They are people who administer their own businesses, and the Government should be doing all it can to make that process as streamlined and as simple as possible for them. A single point of contact would be a good start; a single number is also a welcome opportunity.

But there is so much more that can be done to reduce the compliance costs for small business. I am not sure that the Government has necessarily got on top of all of those. There are some big issues around tax, for example. I think that would have a far bigger impact on small business—and on provisional tax in particular—than the adoption of the single business number proposal. Although it is welcome, that proposal probably is not necessarily going to make a significant difference in the way that some of the other reforms that the Government could take to reduce the compliance costs New Zealand businesses face would actually make.

The Labour Party is going to be supporting this bill through the next stages, with some reservations, and my colleagues will set those out in due course when we get to the Committee stage of the debate. I am sure that there will be some amendments on the Table when it comes time to go through those in detail.

Debate interrupted.

The House adjourned at 6 p.m.