New Zealand Business Number Bill

It is a great pleasure to rise to speak on this New Zealand Business Number Bill in this reading. I had the fortune to serve on the Commerce Committee, which looked at this bill. We returned it with some small amount of changes.

I have listened to the debate in this reading and I would just like to cover a couple of points, first, about what the bill is meant to achieve, and then I would like to address a couple of the concerns that were raised. The bill supports the Business Growth Agenda of this Government, helping to make small and medium sized businesses more efficient and helping to reduce the cost of compliance, particularly the cost of doing business with the Government. We have this odd situation, of course, where for ever businesses have had to have separate representational credentials with every Government agency they have to do business with. So a change of address, a change of any matter of detail, a change of phone number, and that business has to take a great deal of effort to update any number of agencies it may do business with individually and repetitively over the course of its business lifetime.

The New Zealand Business Number Bill will provide a central way of maintaining some basic company information—the information that is already public—but will do so in a way where a business will have to give that information only once, and every Government agency, over time, that it does business with will be able to draw from that source of information. It will also mean that not only is it easy for the business to do its business with those agencies, but if it should need to change something—an address detail, a phone number detail, some small amount of material change—the business will need to make the change in only one location. It will be with the agency of its choice and that information will, effectively, filter through to all the other agencies.

This, of course, means that the small or medium sized business can spend more time focusing on what it does, which is providing products or services to its customers, and spend less time actually dealing with New Zealand Government agencies, which is exactly the way things should be. I think it is a very commendable objective and I am very confident that, if enacted, this legislation will achieve that.

There are a couple of concerns that were raised that I just want to touch upon. One of them was the pace with which agencies may adopt the business number. The reality is that in order to participate, the agencies will have to adjust their IT systems and applications to be able to make reference to this new 13-digit New Zealand Business Number.

We could just have every agency immediately drop what they are doing and immediately undertake a project—in some cases quite a small one; in many cases quite a comprehensive one—to ensure that their systems can interface with this New Zealand Business Number. That is as simple as having a call centre application, with a human being on the phone being able to draw upon that business number to identify a business that has called into them, or a web application being able to call upon it, or any other agent or employee within that agency being able to look up and verify and use that business number information. We could have just demanded that they all do it at once and they all drop other priorities, things that are more pressing on their programmes of work, and spend a great deal of money to do something right now. So it appears to me a very sensible approach that there will be a small number of agencies—about seven, I think, in total—that will come on quite rapidly, but others will join this as they go through making system updates over time.

The second point was around why we cannot just use a number that already exists today—like your IRD number, for instance, because virtually everyone has got one. It sounds good at face value, but if we think about the reality of this, if an agency surrendered its ID number as the number for all other agencies to use, that would actually constrain the way, on its internal systems—not the ones that are actually the source or the look-up point for this business number information, but its own internal systems—that it could then use that number, adapt it over time, and how its applications could call upon that.

By using a new and separate number, it gives the agencies the freedom to do what they need to do inside their own activities with their existing identifiers and for them to all then call upon this new number so that the customer can continue to benefit from a range of services that will be developed over time but to do so in a way where they can all still benefit and make use of the New Zealand Business Number Bill. So I think it would be a major mistake to have picked a single agency, to have taken its unique identifier, and to have used that as the identifier across every agency. It would create more problems in the future than it would solve right now.

In concluding, I would say that this is a very pragmatic, sensible bill. It will help to reduce expense, time, and effort for New Zealand small and medium sized businesses and, over time, for all businesses across New Zealand, and I commend it to the House.

In my colleague David Clark’s contribution in the second reading of this bill he made it clear that Labour would be supporting this bill but with some quite strong reservations. Although we support—and have supported right from the very beginning—the intent of this bill, and continue to support the intent of this bill, along with pretty much all of the submitters who came before the Commerce Committee, our reservations have only really got stronger, particularly as each day goes on, about this Government’s capability to introduce a new system in a way that is not going to end up turning into a bungle and creating a whole lot more cost when it was set up to save money. I will certainly be speaking to those remarks throughout my contribution.

We thought that this was a relatively uncontroversial bill. We thought that there were probably some things that needed to be teased out in the select committee, and they certainly were. But as we went through the select committee process and listened to what some of the submitters were saying, we became more and more concerned. We remain supporting this bill, as I have said, with quite strong reservations, because ultimately we support the intent. We support the intent of having a number system for business, whether that is in the private sector or across the public sector, to enable there to be more efficiencies and efficient, easier interactions for business in New Zealand.

In his remarks in the second reading the Minister said that this would enable easy and more efficient interactions and it would do so by allocating a unique number to corporate and public entities and to unincorporated entities that are in business such as sole traders, partnerships, and trustees of trusts. Well, that sounds great, but, in practice, particularly in the short to medium term, that is just not going to be the case, because the Government is not ready. The Government did not do its work. The Government agencies—there is a very small number of Government agencies that will actually be prepared for this new system when it comes in; the rest of them are not. As we went through the select committee process, more and more submitters became concerned. They became concerned about this and they became concerned that there was not a requirement for Government agencies to get their act together.

This has the hallmark of what we are seeing as a pattern of half measures, a halfway house, and possibly a shambles of a new system that is being introduced. I think that what we are looking at through this bill—if it gets pushed through its third reading—in the short term is the making of another major and another embarrassing IT blunder by this Government in terms of its implementation of something that is not a bad idea. As I have said, we support the intent of it, but there is no plan and there is no indication of the resources that are going to be needed to make this actually work as a system across Government. There were too many red flags starting to be raised during the select committee process that we have some real concerns about.

Of course, as we know, this Government has a track record of making these shambolic, embarrassing IT blunders. We have seen one in just the last couple of days with the payroll scandal within the Ministry of Business, Innovation and Employment, which is affecting a huge number of employees, which is, essentially, exposing the Government’s mismanagement. It is exposing the Government’s mismanagement and the incompetence of having a merger of departments—a great big merger creating a great big ministry that needed to create a payroll system right across that. What did the Government do? It created a system and we are now starting to see the real problems emerge around that. Not only that, but we have also heard today that it has been revealed that the ministry is paying a quarter of its invoices late—it was my colleague Jacinda Ardern who revealed this today—and that over 11,000 bills have not been paid on time. It is a breach of the payment rules that it publishes.

The relevance to this legislation going through the House is quite clear. This is actually about a Government that makes these decisions, decides to think big, merges a whole lot of departments, comes up with an idea, puts a system in place—

💬 Hon Clayton Cosgrove: Stuffs it up.

—and then stuffs it up—quite right. It is struggling with the payment system. So if it is struggling with the payment systems—and let us remember Novopay and let us remember the $40 million - plus—

💬 Hon Clayton Cosgrove: That was Steven Joyce.

That was a Steven Joyce special. Let us remember just exactly the impact of that, which is still being felt in schools. I was in a school just on Monday where I was being told of the continuing issues. Of course, our schools are run by competent people, who have adapted to this shambolic system, and, because they are committed to what they are doing, they are managing to get on with the job. But it has taken massive amounts of time and energy, and wasted time and energy, within each of the 2,500—is that right—schools throughout New Zealand to actually adapt to the shambles that the Government hoisted upon us with the Novopay debacle. And that is not all in terms of mismanagement. We have also seen another major piece of mismanagement this week within the Ministry of Health with a refurbishment cost of $24 million from reserves that did not even exist, with the Minister of Health describing it as a forecasting error and diminishing its importance.

What this points to is a pattern. It is a pattern of making decisions, putting forward legislation—and it is not always a bad idea that the Government comes up with. The idea of having a New Zealand Business Number is not a bad idea, but has the work been done? Has the work been done to work out, before the legislation came to the House, how it is going to be implemented and what the impact of that is going to be? To display to the House that it is not just Labour saying this, in its submission to the Commerce Committee, the Chartered Accountants Australia and New Zealand—an eminently sensible organisation—noted that it was in favour of the bill and its intent but felt that the New Zealand Business Number “would need prompt and broad integration by government agencies in order to capitalise on these so-called benefits to businesses.” It said its “views in this regard have not changed …” throughout its process of being associated with the bill. It said: “We are, therefore, disappointed to note that the current Bill no longer mandates government agency recognition of the NZBN, as it did in section 34 of the initial Bill.”

In clause 34 of the initial bill that came to this House, which was tabled in this House at the beginning of this process, there was a mandate for Government agencies to be a part of this process. During the process, as the Government realised that it did not have all these agencies ready to go through the processes that they needed to, it withdrew that mandate. The Government withdrew it, and as a result we are left with a bill that, if it is passed, will be piecemeal. There is likely to be a shambolic approach by Government agencies that are not prepared for a New Zealand Business Number. It will, in the end, create a more complicated system. It will not deliver the efficiencies, certainly in the short to medium term. This Government has brought a bill to the House that it is just not prepared for.

It is a pleasure and an honour to rise in support of the New Zealand Business Number Bill in its second reading. You can tell that this is a very good bill because after its first reading it got referred through to the select committee. It has been kicked around a bit. It got only 14 submissions and five of them were heard orally. We know that when you get very few submissions—look at the social housing reform legislation, which got only eight submissions; this bill, with 14 submissions—you can tell that people are generally happy with it. There have not been any major changes—very small changes—so we know it is a good bill. It is getting the support of the House.

When you look at the detail of it, not only it is effective but it is efficient and it is economic. We know, around the effectiveness of it, that businesses will get a unique number. It will go on a register. Ultimately, that will enable business to engage with New Zealand Government agencies a lot easier. That is what this bill is about—making things easy. It is also efficient because what we will have is, instead of businesses dealing with multiple numbers with Government agencies, they will have this one unique New Zealand Business Number. I think that needs to be supported.

But, most of all, this bill is economic. It is saving around $60 million a year for New Zealand businesses. I think that is fantastic, on a day when regional GDP rates have been published. Look at Canterbury. There is great GDP growth. In fact, my electorate of Waimakariri is going really well, with small and big business. On this side of the House we know that tools like this legislation support business, ultimately, to provide jobs and good incomes and improve the well-being of the people. Thank you very much.