New Zealand Business Number Funding (Validation and Authorisation) Bill

I move, That the New Zealand Business Number Funding (Validation and Authorisation) Bill be now read a first time.

The New Zealand Business Number (NZBN) is a globally unique identifier available to all Kiwi businesses whether they are a sole trader working from home or a large corporate.

💬 Hon David Parker: Great initiative.

Thank you. The New Zealand Business Number links to core business information which organisations are most often asked for.

💬 Brett Hudson: You never liked this when you were in Opposition, Faafs. What are you going to say about it now? You hated it in Opposition.

For New Zealand to succeed it’s important to have infrastructure in place that makes it efficient and easy to do its business.

💬 SPEAKER: Order! Order! The member gets his chance in a minute.

This Government has a vision to improve New Zealand business, encouraging them to become digitally enabled and directly transacting with each other in an efficient, automated, and standardised way. By making it faster and easier to share core business information, the New Zealand Business Number saves businesses time and money when interacting and transacting with each other and with the Government.

GST numbers have recently been added to a range of key business information available, via the New Zealand Business Number or companies. Currently, 60 Government agencies have, or are building, the New Zealand Business Number into their systems right now. The New Zealand Business Number supports and enables high quality, flexible, and cost-effective public services. When a business’s details change, it’s quick and easy to update everyone in their business network by notifying them all at once, including Government. This allows businesses to spend more time on their business and less time on the administration of that business. The value of the NZBN is also greater than the sum of its parts. The true potential of the NZBN lies in its power to connect, and I expect many businesses will find new and innovative ways to use the information on the register.

It is estimated that once the NZBN is fully implemented, the benefits to New Zealand businesses will be around $60 million per year. This only includes savings calculated from businesses’ interactions with Government. The savings are likely to be more when business to business interactions are included.

The idea of a single identifying number for businesses is not new internationally. Unique business identifiers are relatively common now, and are used in many countries in Asia, Europe, and North America.

The New Zealand Business Number provides a platform for a number of digital innovations like e-invoicing, which will transform how New Zealand does business in the future. It’s crucial that New Zealand businesses are ready for the technology powered by the NZBN, like e-invoicing. If 60 percent of the transactions of businesses that currently use internet or desktop accounting solutions are e-invoicing, within five years the estimated benefit is $1.27 billion each year to the economy.

💬 Hon Member: Wow.

Amazing.

This bill addresses a technical issue in the design of the New Zealand Business Number Act 2016. Late last year, the Government became aware of a problem with the way the New Zealand Business Number Register was being funded. About 80 percent of the costs of running the New Zealand Business Number Register previously came from fees collected under the Companies Act. This practice was consistent with previous decisions about how the NZBN would be funded. I have received advice that the way this money has been spent is not consistent with the fee-setting provisions in the Companies Act. After I became aware of the problems with funding the NZBN Register in this way, I authorised Crown funding to be used to fund the NZBZN Register. In order to preserve the value of the New Zealand Business Number Register and the initiatives that depend upon it, legislative change is needed.

There is currently no way for businesses to explicitly share the costs of providing the New Zealand Business Number Register. It has always been intended that businesses would help meet the costs of the NZBN. The New Zealand Business Number provides benefits to businesses, not the general public. For this reason, the Government is maintaining the previous policy that businesses should pay most of the costs of the New Zealand Business Number.

This is being done now, under urgency, because of the need to also validate the way the New Zealand Business Number has been funded historically. If this were done through a normal statutory process, the way the company’s regulations had been set out could be challenged, and money historically used to fund the New Zealand Business Number Register may need to be refunded.

This bill is also designed to permit amounts obtained under the Companies Act to be used in the short term for NZBN purposes and to put in place a robust legislative framework allowing the costs of the NZBN to be recovered from businesses in a transparent way. It will not, in itself, lead to any changes to the fees obtained from companies to meet the costs of the NZBN.

Before I finish, I would just like to wish Will and Isabella Nash all the best in their soccer tournaments they’re playing in Napier today. I commend this bill to the House.

Good morning, Mr Speaker.

💬 SPEAKER: Good morning, again.

Again.

💬 SPEAKER: It’s great to have you here.

It is wonderful to be here.

💬 Brett Hudson: It’s the same day. It’s a long morning.

Yes, well, I’ve got all day. It is a pleasure to speak to the New Zealand Business Number Funding (Validation and Authorisation) Bill through all stages of the House. National is supporting this bill.

The New Zealand Business Number is a good initiative for New Zealand business. I’ll just give a bit of background to the establishment of the New Zealand Business Number, and I want to congratulate the Minister, the Hon Stuart Nash, for picking up this piece of work and developing it even further, because it will be of huge benefit to all New Zealand businesses, particularly when the uptake is as good as it should be.

Since 2013, companies registered in New Zealand have had a New Zealand Business Number, and that is a unique identifier for businesses. They can use those in their interactions with Government agencies and departments; but not only that, businesses can use this number in interactions with other businesses, and that is what makes it so valuable. The National Government, in our time, used it as part of the Business Growth Agenda, and that was used to focus on and build a productive and competitive economy.

In Budget 2015, the intention to introduce legislation to allow the New Zealand Business Number to be allocated to all New Zealand businesses operating in New Zealand was brought about, and that included sole traders, partnerships, and also incorporated societies. The legislation that these were contained in was passed in 2016. So the New Zealand Business Number established a register and enabled the allocation of New Zealand Business Numbers to businesses and to individuals operating as businesses, such as sole traders, partnerships, and the trustees of trusts. More than 500,000 enterprises have been allocated a New Zealand Business Number, and the benefits are many. The benefits of a New Zealand Business Number reduce costs to business, and it’s about making doing business faster. It makes doing business easier and simpler.

I was talking to a small-business owner just a couple of evenings ago who was complaining loud and long about the time it takes to do paperwork—GST; wages, of course; compliance; all those activities that businesses must do on a regular basis. Across many Governments over the years, measures have been taken to improve the processes and the support around small businesses. I think the Minister referenced that working on your business is far more important than working through the administrative detail, which, while important, is up to a Government—any Government and every Government—to make as smooth and as accessible as possible. So making business faster, making it easier, and making it simpler, particularly moving on to the online platform, is part of the reason that, when National were in Government, we were ranked number one in the world for ease of doing business.

The New Zealand Business Number simplifies how business works with Government. It greatly reduces the costs and time and hassle of doing business and dealing with Government agencies, because businesses, under the New Zealand Business Number, no longer have to keep updating their data with a number of different Government databases. The New Zealand Business Number will enable all sorts of innovative and time-saving administration solutions between businesses, between their suppliers, and between Government, giving them more time to spend on growing their business. There is a matrix, a diagram, you could cast with the New Zealand Business Number and businesses who operate with their suppliers, their customers, other businesses, Government agencies, regulatory authorities, local Government. It is a complex matrix and the New Zealand Business Number traverses them all. All businesses in New Zealand are eligible for a unique New Zealand Business Number and to be registered on a New Zealand Business Number register.

So, in essence, the New Zealand Business Number does away with the need for businesses, every time they wish to sit down and work with a different Government agency, to update and file their details time after time after time. The New Zealand Business Number cuts through all that. It is calculated that the New Zealand Business Number could save business up to $60 million a year; so the sooner more and most businesses sign up, the sooner those benefits will be seen across the sector, which is experiencing some strong headwinds at the moment with some of the measures that the current Government has brought in—measures such as increasing the minimum wage so very quickly and some of the labour-relations requirements going in.

Some businesses now no longer have the ability for 90-day trials, meaning that it’s harder for larger businesses with over 20 employees to take on—it’s becoming much more risky—employees. The 90-day trial was, in fact, one of those, and I won’t traverse that for too long. We have, over this side of the House, spoken to many, many small-business employers who have said, “It enabled me to take on a youngster and give them a chance, and guess what? Most of the time it’s worked out just fine.” So while we regret—and this is a side bar, Mr Speaker; I will return to the bill with great haste—that small business is certainly under the pump at the moment, the New Zealand Business Number is probably the one measure that this Government have adopted to benefit small business. So it’s by no means evening up the scales.

The Labour - New Zealand First - Green Government are not a business-friendly Government. That is demonstrably true. Businesses—

💬 SPEAKER: Maybe we’ll get back to the bill now. I know the member’s trying to excite the House, but I think we’ll get back to the bill.

Thank you.

💬 Hon Scott Simpson: And it’s working.

Well, I’ve got the Speaker’s attention and that’s wonderful. Another measure where the New Zealand Business Number is good for business is the e-invoicing, which is another programme which has been picked up by this current Government. The New Zealand Business Number has been expanded to include more of the information businesses need at their fingertips. Companies can now update their primary business data—that’s “PBD”—to include their GST number through the company’s register.

E-invoicing, which was also an initiative under the previous National Government, was first considered in 2016. I think the first work began on e-invoicing then and is now progressing under this Government. I do wish they wouldn’t try and take all the credit for it, but here I am today to remind the Government that this very good piece of technology for small business was commenced under National, grateful though we are that this Government—

💬 SPEAKER: Right, back to the numbers.

—for once have seen the sense and have carried it on. So with invoicing, businesses—

💬 SPEAKER: Order! [Speaker holds up copy of the bill]

Yeah, OK—all right. Well, can I just try and weave it in—

💬 SPEAKER: Oh, have a go—have a go.

—because I think I can.

💬 SPEAKER: Go on. I’ll be generous.

I think I can, because with e-invoicing, where businesses no longer need paper-based invoices, that falls in to support the ability to use their New Zealand Business Number capability in invoicing their clients, by using the same data as the unique identifier. So that is why I raised e-invoicing as part of one of the few things that this Government is doing to support small business.

It’s a pleasure to rise on the New Zealand Business Number Funding (Validation and Authorisation) Bill. I think the initial two speakers have spoken a lot in detail, with varying degrees of success, about what the New Zealand Business Number sets out to do. Seeing as the previous speaker, Jacqui Dean, wanted to take credit for some things, I think they should probably take credit for this piece of legislation actually having to go through the House, because, essentially, the New Zealand Business Number, which we have no qualms with, was set up but the previous Government didn’t set up a mechanism in order to pay for its administration.

So we are validating some of the expenses that have been expended to date and making sure that we can pay for those functions going forward in order to make sure that the Business Number is a success—something that the previous Government should have done. We are validating the expense, and we are making sure that there is money to make sure the administration of the number is done. So they can take credit for some of the success, but they should also take some of the responsibility for us having to be here this Saturday morning because they didn’t have a mechanism in order to pay for it. So credit where credit’s due. We are here doing this because the previous Government couldn’t do that, but, you know, that’s what happens.

So I’m glad that the New Zealand Business Number will be funded in the future. If I were the Opposition, I wouldn’t worry too much about the New Zealand Business Number. I would be worried about their polling numbers, which would see some of them disappear very soon at the next election. Thank you very much, Mr Speaker.

Thank you, Mr Speaker. It is actually, for the first time, a pleasure to speak on a bill. We’re going to support the New Zealand Business Number Funding (Validation and Authorisation) Bill.

Before I get on to the substance, I just want to comment on some remarks. Mr Faafoi: a rather gratuitous swipe at officials’ advice to the previous Government, and for once—unlike Minister Sage—a Government actually taking advice from officials and executing it. Mr Faafoi, I think your fixation on the less than relevant might go some way to explaining why the Minister is still outside of Cabinet, but give it a bit of focus and you might yet get there.

It’s only taken till the fourth bill on the Order Paper to finally have a reasonably justified cause to pass a bill under all stages under Budget urgency. The first bill simply put an unnecessary tax on motorists. The second bill put a greater tax burden on people that shouldn’t be required. The third bill is going to hurt businesses by placing a $70 million cost on them, but finally we have a bill—we finally have a bill—where the Minister is able to articulate very good reasons—

💬 Hon Kris Faafoi: Bye, bye, Brett. You’ll be gone—you’re a listee.

—as to why this bill should be passed under urgency in all stages.

💬 SPEAKER: Order! Order! I might be gone but it’s not relevant. If the member’s referring to that member, he should not refer to me. Thank you.

Wonderful. Nice to know I touched a raw nerve there, Mr Faafoi.

💬 Hon Kris Faafoi: Ta, ta, Brett.

You’ll get there! You’ll get there, son, just keep working on it!

So finally we have a bill where the Minister is able to give good justifications as to why this should come under urgency. The potential implications, if this were to go through a full process, could be rather detrimental to the interests of businesses and certainly to New Zealand. We do support that this bill be worked through the stages in the way it is.

Another remarkable point, because we absolutely—we instituted the New Zealand Business Number, so of course we support this. What is remarkable is how being in Government changes people’s views. I sat on the Commerce Committee last term, when the Business Number was enacted, and I can tell the House and tell New Zealand that members who sat opposite to us now were not glowing in their praise of the New Zealand Business Number when the National-led Government was seeking to legislate it.

In fact, it was quite the opposite. The number of times I heard Dr David Clark tell us how it was a complete waste of time, a complete waste of money, and shouldn’t be done is quite remarkable. But here they come with a bill to validate the proper funding for it—which we do support—and all of a sudden they think it’s almost the best thing since sliced bread. Well, we agree with them on that too because, one thing: usage of the New Zealand Business Number as it develops is expected to save New Zealand businesses—how much is it, Mrs Jacqui Dean? Is it $80 million a year?

💬 Andrew Bayly: $60 million.

$60 million a year. Not quite enough, but it’s good—$60 million a year—because that Government has just cost New Zealand businesses $70 million a year through the tourist tax, but we’re most of the way to recovering that gap that they have created, through the New Zealand Business Number that we put in.

We agree that it has been found that the funding mechanism—which was agreed—is a sensible way where businesses could contribute most of the expense towards a thing that they benefit from most of all. Now it’s been discovered that although that was a very sensible idea, it wasn’t in line with what is permitted under the Companies Act. It is appropriate that we take these steps to not only retrospectively permit that and to validate the payments made but to make sure that we will be able to collect levies for the New Zealand Business Number—80 percent of them, at least—from businesses, because it does reflect that they are the principal beneficiaries of the system.

The system has enormous potential. The reason we put it in place was to help speed interactions and efficiency of interactions between businesses and Government. The previous practice—and it will still exist to some degree or another—is that every entity, every business, but also, actually, every individual will have a unique identifier with every Government entity they have to do business with whether it’s a lot or a little, frequent or very infrequent. The New Zealand Business Number gives a unique identity that can be shared across Government entities, which means that certainty of authorisations of identifying the correct parties is so much easier, so much more efficient, and that will streamline interactions between business and Government. Into the future, one hopes, it will be expanded so that it can also be used across the private sector as well, and can do the same thing to streamline and make more efficient interactions between businesses and their customers’ businesses, their suppliers, and all entities.

It is a great idea. I’m very pleased that we instituted it in the first place. While it’s regrettable that the advice we took and acted upon wasn’t as effective as we would have liked, this is a good measure to address that. I commend this bill to the House.

Members, do you realise what we just heard in that contribution from that member opposite? I’d just like to point out to the House that that member had the gall to stand up in front of this House and admit to everyone in here that he was the chair of the committee that oversaw this piece of legislation.

💬 Brett Hudson: I raise a point of order, Madam Speaker. I was the deputy chair of that committee; the member could at least try to be correct.

ASSISTANT SPEAKER (Poto Williams): That’s not a point of order.

💬 Hon Kris Faafoi: Oh, so no authority then.

Ha, ha! So, the deputy chair. If I were the members opposite I would be embarrassed. I would not be standing up talking about how wonderful this legislation is, which New Zealand First voted for and supported. If you go back and look at the notes, we were concerned about the funding, funnily enough, and here we are, quite frankly, on this side of the House, fixing up their mess. We’re happy to do it because we know it’d be good for business. Therefore, we support it. Thank you very much.

Thank you, Madam Assistant Speaker. It’s an absolute delight to be talking on this bill—

💬 Hon Kris Faafoi: He definitely wasn’t the chair!

—and I didn’t even have anything to do with it! But it is the New Zealand Business Number Funding (Validation and Authorisation) Bill, and as my colleagues have rightly pointed out, this is a very important thing for New Zealand businesses. As you know, we have 530,000 of those thriving businesses in New Zealand, creating all those jobs, providing all those services to New Zealand. That’s the backbone of New Zealand that we all refer to. But what people don’t realise is it’s the people behind those 530,000 businesses that make this the great country it is. That’s why this bill is so important, because what we want to do, and what we always wanted to do as a Government, when we were in power, was that we wanted to support small businesses. That’s not about imposing big costs on them, but to make sure that they can get on with as little interference from Government—those dreadful words: “I’m here from the Government to help you”. That’s not what we see as the way to help New Zealand businesses.

So when this was originally introduced under our watch, it was about promoting a way for small businesses to interact much more easily with New Zealand Government agencies. As we’ve heard, there are 60 Government agencies that, if you use your New Zealand business number, you can access all that range of entities and not have to continuously fill out all those mind-blowingly repetitive requirements that are often required. IRD numbers, GST numbers, all those sort of things—that’s the type of information that you would normally see on a New Zealand Business Number, and all the information that goes with it. So it’s not about the number; it’s the data behind it. So the whole purpose of this was to make sure that you only had to enter that data once, and so when you interacted, if you had to, with the 60 Government agencies, you could do it easily. That’s what we set about—and it’s been in place for a number of years.

The whole purpose of this, as I’ve said, is really about reducing the cost on small businesses. I thought it was interesting—my good colleagues have highlighted a $60 million a year saving for small businesses. We know that compliance costs are one of the greatest banes of the lives of the owners of small businesses, but, as the proposer of the bill, the Hon Stuart Nash, highlighted, the benefit is $1.2 billion if 60 percent of those using internet services currently were to actually go on and use this over time. So we’ve heard some of the talk about e-invoicing—the Hon Jacqui Dean talked about it—and it is very important. Recently, we’ve signed the Pan-European Public Procurement Online, which are all fancy words, but it’s Pan-European, and, actually, part of this, the first step, has been to join up with Australia to make sure that we can interact with Australian Government entities as well in a much easier way.

So this bill is about working through and making sure that that system has the right background to it. One of the issues that has been alluded to before—this has traditionally been funded out of levies that companies pay when they’re on the New Zealand Companies Register through the Companies Act. But, of course, this piece of legislation relates not only to companies but partnerships and sole traders. So this bill actually makes sure that the funding that is used to operate this system—and it’s a very small fund, or cost—is actually taken from the right source. This is what this bill is; that’s the validation and authorisation part of this bill.

I think this is very good. I think New Zealand small businesses—I would urge them to take the opportunity to take up their New Zealand Business Number. Everyone has been allocated a number; all they need to do is fill in all the background information once, keep it up to date, and you are in, ready to go, and it makes it so much easier for them. I’m looking forward to hearing the debate as we progress through this bill.

Tēnā koe, Madam Assistant Speaker. Tēnā koutou e Te Whare. The Green Party supported the New Zealand Business Number when it was introduced by National. The reason we’re here today is, unfortunately, they didn’t do all their due diligence, didn’t do the legislation right, so now we have to pass this legislation under urgency to fix a problem around fee collection to ensure we’re not charging fees in an illegal manner.

The bill will also create a framework for future funding of the New Zealand Business Number, which is essential as it has the potential to revolutionise the way in which New Zealand businesses interact with each other and the Government. I think that’s something that we can all agree on. This Government is here to carry on the work, to do it properly, and to fix the mess that we inherited from National, because they’re so often so ideological. They don’t realise that all New Zealanders, whether they’re in business, whether they’re employees, whether they’re carers, whether they’re volunteers, whether they’re young people or old people—they all benefit from infrastructure and services, which are funded by taxes. They should be proud to pay tax, because that’s how we invest in our infrastructure. That’s how we invest in education, healthcare, and the services and infrastructure that New Zealanders actually want and believe in, because they are not selfish and ignorant like the National Party members.

Thank you, Madam Assistant Speaker. I just rise to take a very short call on this bill. It’s a good bill, two parts to it—very simple. I commend it to the House.

Bill read a first time.

Second Reading