Auckland Regional Amenities Funding Amendment Bill

I move, That the Auckland Regional Amenities Funding Amendment Bill be now read a second time.

It’s a real privilege to take this call to highly commend this bill that I am the sponsor of, the Auckland Regional Amenities Funding Amendment Bill. I would like to start by thanking the Government and Administration Committee for their input. I want to especially acknowledge the chair, Dr Jian Yang, and the deputy chair, Ginny Andersen, and, of course, I want to thank all of the members on the committee as well for working in such a collaborative manner on this legislation.

I also want to thank all the advisers and I want to thank all submitters. We received 14 submissions during the select committee process, and we had the opportunity to hear from one submitter here in Wellington. I would say that that one submitter covered the whole bill really well—the background and the need for this bill.

We did make some changes to this legislation in the select committee process, and those changes can be grouped under two main headings. I will talk about them, but before that, I want to say that I had the opportunity to sub on to the select committee as and when this bill was on the select committee’s agenda. So I’ve been through this whole process, even on the select committee, and I have been in touch with one of the Auckland regional amenities to ensure that we were able to deliver what the objective of this legislation has been.

This bill is to see that the financial reporting standard in the Auckland Regional Amenities Funding Act 2008—the principal Act—aligns with the financial reporting standard that is there in the Charities Act 2005. So, according to the Auckland Regional Amenities Funding Act 2008, the specified amenities are required to prepare financial statements in accordance with New Zealand’s equivalent to International Financial Reporting Standards. According to the Charities Act 2005, they are required to prepare their financial statements as per generally accepted accounting practice.

Now, the important point to note here is that the New Zealand equivalent to International Financial Reporting Standards are part of generally accepted accounting practice, but that is mainly for entities that are for profit, not for entities that are not-for-profit, and these Auckland regional amenities are registered as charities under the Charities Act 2005. These entities are not-for-profit, and so the standard which is required as per the Auckland Regional Amenities Funding Act 2008 should not apply to them, but at the moment they have to in order to comply and prepare their financial statements as per this New Zealand equivalent to International Financial Reporting Standards as well.

So it is, basically, just doubling up their work, and I would say that this should have been fixed when section 42A of the Charities Act 2005 commenced in 2015. But, at that time, that got overlooked, and that’s why these amenities have this issue of non-compliance because they are complying with the Charities Act 2005, because if they don’t comply with the Charities Act 2005 reporting standards, they will lose their charitable status.

We have these amenities. They are really active and are really important to our Auckland community. These amenities are the Auckland Philharmonia, New Zealand Opera Ltd, Auckland Theatre Co., the Auckland Festival Trust, Auckland Observatory and Planetarium Trust—which is based in Mount Roskill at the moment—Coast Guard Northern Region, Surf Life Saving Northern Region, Auckland Regional Rescue Helicopter Trust, and WaterSafe Auckland.

I said that the Auckland Observatory and Planetarium Trust is based in Mount Roskill at the moment, where I’m based. That is because, as we know, we are undergoing boundary changes, and it is quite possible that this amenity may not remain in Mount Roskill. It is not that the amenity is moving out, but the boundary might change, and so this might mean that this amenity will go into another electorate. But that doesn’t matter to me, because this is about helping these amenities that are there in Auckland, and it’s a real privilege to have the opportunity to support this amenity and other amenities—

ASSISTANT SPEAKER (Hon Ruth Dyson): I’m sorry to interrupt the member, but the time has come for the House to adjourn for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

Before the dinner break, I was saying that one of the Auckland regional amenities that is currently located in Mount Roskill may actually become part of another electorate as we are undergoing boundary changes. But that doesn’t matter, as I was saying, because this is about supporting these amenities, not just one amenity but all Auckland regional amenities.

I also explained why this bill was needed, why the alignment of financial reporting standards in the Auckland Regional Amenities Funding Act 2008 was important to be aligned with the Charities Act 2005.

So now I would like to focus on changes that are proposed by the select committee. In the select committee, as I said before the dinner break, the changes that were made can be grouped under two headings. The first one is around the clarity of the commencement date, because as the bill was proposed there was no clarity around transitional provisions. In the select committee process we thought it was important for us to provide that clarity. So we propose adding a clause, clause 4A, which provides the clarity around the commencement of this change that is proposed through this legislation. This would apply for a financial year that was in progress or recently completed, and that makes full sense.

The second change that was made in the select committee process is actually a very important one, a change that is really important to all these Auckland regional amenities, and that change is about retrospective validation. I’m mindful, and all members on the select committee were mindful, that it’s not a common practice for us in Parliament to make any changes that have a retrospective validation, especially where there is some non-compliance. But in this case, it’s a very different case because this is a minor, a technical, change that we are making to benefit all these Auckland regional amenities. This non-compliance is not harming any other entity or third party. I have already talked about this before the dinner break—that the standard that is required as per the Auckland Regional Amenities Funding Act 2008 doesn’t apply anyway to these Auckland regional amenities because they are registered as charities under the Charities Act 2005. So this is actually something that we should have fixed when section 42A of the Charities Act 2005 commenced, but it got overlooked. That’s why the Auckland regional amenities are required to prepare their financial statements as per these two different standards that are prescribed in these two different pieces of legislation. But they have been complying with the Charities Act 2005, and they have been preparing their financial statements in accordance with public benefit entity standards. So this is something that we must note: that they have been complying with one of these two standards, and they have been complying with the Charities Act 2005.

So the retrospective validation that we have allowed in this legislation, in this bill, in the select committee process, is only for amenities that are non-compliant with the Auckland Regional Amenities Funding Act 2008 as long as they are complying with the Charities Act 2005. So if they are complying with the Charities Act 2005 then we say that retrospective validation will apply. This makes full sense, again, because these amenities don’t want to have any non-compliance in their record. We want to help them because this is actually something that Parliament overlooked when that change was made in the Charities Act 2005. This retrospective validation will apply from that time; that was 2015, so the 2014-15 financial year we are talking about. As I said before, if they are complying with the Charities Act 2005 then only this retrospective validation will apply to these Auckland regional amenities.

So, going forward, I really hope that all sides in the House will support this legislation because this will save a lot of work for these Auckland regional amenities that is not adding value to anyone and, actually, is just duplicating the work that they have to do to prepare financial statements as per these two different standards under these two different pieces of legislation. So I highly commend this bill. Thank you, Mr Speaker.

Thank you, Mr Speaker. I’m very pleased to be able to speak on the Auckland Regional Amenities Funding Amendment Bill. It is an important bill. As someone who’s a constituency MP in Auckland, and he’s had a little bit to do with the local government scene in Auckland over a number of years, I have an awareness of just how important these institutions are and the governance and legislative arrangements within which they work as well.

I’m very pleased as well to be able to speak on the bill because one of the amenities that is covered by the provisions of the bill that is what we colloquially call the Stardome, but officially is the Auckland Observatory and Planetarium Trust Board, sits within my electorate. It is within Cornwall Park, on the eastern edge of my electorate. It’s an extremely popular and well-used amenity, and it’s covered by this piece of legislation.

I’ve got to say, one of the best experiences of my life ever, was going along to the Stardome with my wife, having a couple of glasses of red wine, and they put on this marvellous show where they play the two best rock albums of all time, which are by Pink Floyd, of course: The Dark Side of the Moon and Wish You Were Here. Then you sit back and the ceiling of the Stardome is just sort of a psychedelic array of lights, colours, and all sorts of things. It’s a legal buzz, I’d have to say. I’d encourage anyone who’s in Auckland looking for a good night out to go and do that. So I’ve got a strong connection to at least one of the amenities that’s covered by this piece of legislation.

I do want to talk a little bit about some of the background to this, because it is important, I think, to actually understand why it is that we have this piece of legislation that sort of coagulates this big range of cultural and other institutions in Auckland, and, therefore, why we need to ensure that we’ve got the accounting treatment right, as per this private bill, which is amending a principal Act from 2008. That piece of legislation that it’s amending is the Auckland Regional Amenities Funding Act 2008. It was brought through this House by the Hon Judith Tizard at that time, who was the Minister for Auckland Issues as well as a range of other portfolios.

I remember from my time in local government during that period of the 2000s, there was an absolute mishmash of funding arrangements for all of these different institutions, and they include—I’ve got the list here—the Stardome; the Auckland Observatory and Planetarium Trust Board; the Auckland Philharmonia orchestra; Auckland Regional Rescue Helicopter Trust, which is extremely important; the Auckland Theatre Co.; Coast Guard Northern Region; the National Maritime Museum Trust Board—the maritime museum down at the Viaduct Basin; New Zealand Opera Ltd; Surf Life Saving Northern Region Inc.; the Auckland Festival Trust; and WaterSafe Auckland Inc., which does extremely important work in terms of water safety, especially with our kids.

Now, all of these different institutions had different funding arrangements. As it transpired, most of them were based in the old Auckland City Council area, which is in the middle of Auckland. Now we have one local government authority for all of Auckland; back then we had seven. The issue that arose was that, effectively, the whole region benefited from the services provided by all of these institutions, but because they were physically based in Auckland City, the other six territorial local authorities generally didn’t contribute to them at all. This created an unfairness but also funding problems for these institutions. So the solution was to develop a piece of legislation which set up a clear, transparent, and equitable funding stream for them all. Initially, it had a formula-based funding system where each of the territorial local authorities from that region basically paid into a common pool, which then funded these institutions. Then, with the Auckland Council amalgamation in 2010, the arrangement has become somewhat simpler. The Auckland Regional Amenities Funding Board, which is the subject of this piece of legislation, now levies Auckland Council on an annual basis, brings in that money, and then distributes it out across these different organisations.

The problem that has arisen, which this bill rightly attempts to correct, is that when the Charities Act was passed in 2005, it provided that charitable institutions should be reporting in accordance with the generally accepted accounting practice, otherwise known as GAAP, rather than the International Financial Reporting Standards.

I’ll talk in a bit more detail about these; it’ll really light up your night a bit later on. But that was the provision that was set down by the Charities Act 2005, so we’re talking about 15 years ago now. All of these institutions, by their nature, have that charitable purpose. They’re not-for-profit, private organisations. They’re not actually publicly owned council institutions either, even though their funding, effectively, comes from a public source—the Auckland councillors levy—they’re, effectively, all charitable institutions and often also have additional funding coming in from the various ways that charities raise money to support themselves as well: public appeals and the like. So those institutions, under the Charities Act, are supposed to be reporting along the GAAP lines, and that’s well accepted.

The problem is that the legislation has pointed them in a different direction, and that puts them in a very difficult position in that the way in which they’re reporting probably isn’t in alignment with the core piece of legislation that they’re required to adhere to. In fact, what we’ve learnt through the course of this issue is that, in fact, for about the last five years these institutions have not been reporting in the correct way. I don’t think the purpose—I know, in fact, the purpose of the member or anyone involved is not to criticise those institutions for that or put them in the gun or anything at all; it’s actually to try and deal with that problem.

But it does, I think, bring to light a bit of an issue that the House needs to think about with this piece of legislation, but also in the future: how do we make sure that when we bring legislation to this House that has an impact on organisations out there in the community, we’re not having significant oversights like this creep into our legislation again? Because here we have some extremely important institutions in Auckland, our largest city—very, very venerable and important organisations—who have actually been filing their accounts in a way that isn’t in accordance with the legislation that oversees them. That really was through a set of oversights through the legislative process. So I think there’s a bit of reflection there for the House and our processes, to make sure that that is something that doesn’t arise again.

It’s worthwhile talking a little bit about the two key changes that the Governance and Administration Committee has identified in its report back. The first—and I’m not sure whether this was an oversight in the original bill or whether it was just something that needed to be worked out with a bit more information—was setting in place a commencement date for this piece of legislation, which, as I understand it, will be the day after it receives Royal assent. That seems to be perfectly sensible.

The second point is a more interesting one, and that is the issue of retrospective validation. It was raised by the member Parmjeet Parmar in her speech. This is a very unusual procedure in that we’re, effectively, saying that these organisations which for the previous five years were not acting in accordance with the Charities Act and the reporting requirements there, for that period their actions will be validated. Now, that’s not something that I think we should ever do in the House lightly or without questioning or looking into; I think there is a well-established principle that pretty much every member in this House would adhere to that we reserve retrospective legislation only for situations that are highly justifiable—there should be quite a high bar for that.

Parliaments have a lot of power. They have the power to force people to do things. We have the power to force people to give money to the Government. If you start establishing a precedent that Parliaments can go back in time and make rules up that people didn’t know about at the time, that’s not generally a good thing.

So I think one of the things that will be really useful to do in the committee of the whole House stage of this debate, assuming that the bill passes through the second reading, is just to make sure through that process that the House is really comfortable and that we’re doing the right thing there. I’m not necessarily casting doubt on that. It seems to me that in the select committee’s report back, they’ve identified that, effectively, what has been validated is something that does no harm, something that wasn’t done with any malice or intent or ability to gain anything that these institutions would have otherwise not had, and that it’s justifiable because there was also, effectively, an oversight in legislation. None the less, I think it is the duty of the House to look into that very closely as this bill progresses, to make sure that we are satisfied that this relatively extraordinary step of going back and validating in a retrospective way is something that we are properly comfortable with.

This is a bill which, I think, has pretty wide support across the House. As an Aucklander, and someone who knows that these institutions are really important, I want to make sure that this legislation does go through in the appropriate way and supports them in the activities that they do on behalf of the people of Auckland. I do look forward to examining some of those issues in the committee of the whole House stage of the debate. But for now, I very happily commend the bill to the House. Thank you.

I rise to speak reasonably briefly on the Auckland Regional Amenities Funding Amendment Bill. First of all, I thank the sponsor of the bill, that’s Parmjeet Parmar, and she has been working very hard and I’m very pleased for you to introduce the bill to the committee. The Governance and Administration Committee welcomed the bill and we worked collaboratively on this particular bill to make the bill even better.

Now, basically, the bill would replace a requirement for specific amenities—we have a list of amenities there—to prepare financial statements in accordance with New Zealand equivalents to International Financial Reporting Standards, we call it NZ IFRS, with a requirement to prepare in accordance with generally accepted accounting practice—that’s GAAP. Now, this means that the bill corrects an anomaly in the financial reporting requirements that apply to specific amenities. I emphasise that this is for specific amenities because we are limiting the bill to a certain list, a list of amenities in Auckland—and that is very important to note. So this bill would allow the specified amenities to prepare a single set of financial statements instead of two; now we have two because of the problem of what we call the legislative overlook from 2015.

So let me come to the particular development of this anomaly. What happened, really, is, actually, in 2015, the Charities Act 2005 was amended; it was amended to require that certain—certain—charitable entities prepare financial statements in accordance with GAAP. So to be consistent, some other legislation work was done so some other Acts were amended. However, the principal Act was not amended. So that caused a problem. That means the requirement under the Charities Act to prepare financial statements in accordance with GAAP is in addition to any other reporting requirements under any other enactment. So this is the problem. For that reason, we believe that now we should correct that particular issue.

These specific amenities were required because of an overlook—basically, they had to do double financial statements. But, in reality, they didn’t. So, technically, they have breached the particular Act because they didn’t do two financial statements. So this particular bill will address that particular issue. For that reason, when the select committee was considering the bill, we made an amendment. Basically, this amendment relates to retrospective validation—previous speakers mentioned all these amendments. So this is very important because otherwise these amenities technically broke the law, so we need to make sure that we address what happened in the past. It’s unusual, but we believe it is necessary. We believe that this breach is minor, so we should be able to address that.

Another amendment, of course, Parmjeet Parmar also mentioned is the commencement date. We believe that we need to somehow specify the particular commencement date.

I believe this bill is a minor bill but very useful. It is useful because—we are supporting this particular bill because we support communities. In Auckland these amenities play a quite important role in our life. So, for example, the Auckland Philharmonia orchestra—each year more than 250,000 hear the orchestra live. So it’s a large number of people. And then many people would, of course, listen to CDs and watch TV—all these. So it’s very important we support amenities like this. And then you have New Zealand Opera and you have some others like the Auckland Arts Festival, that’s very important for ethnic minorities. And you have the Auckland Stardome observatory. I remember that I took my kids to the observatory. So all these amenities play a very important role in your life and therefore the bill is minor but is very useful. Thank you.

I rise to speak on this interesting bill. It is a technical bill, a tiny bill, a teensy bill. However, is not a trifling bill or a trivial bill and even though it deals with accounting standards, it’s not even a tedious bill. It’s a trimming bill, a tidying bill, a bill that sets matters to rights. And, as has been said across the House, it is a bill that we should all support and, indeed, I think we are all supporting this evening. As this bill has gone through an absolutely standard process of going to a select committee and of hearing submissions from entities that are concerned with the particular bill, I just want to report back on some of those particular submissions that came in from the entities that are concerned.

The Auckland Theatre Co. said that they support the intent of the Auckland Regional Amenities Funding Amendment (ARAFA) Bill and that they’ve reviewed the submission of the Amenities Board and they support that particular submission. The coastguard said that they have reviewed the ARAFA Bill and that they support the bill and that they support the submission put in by the Amenities Board. Drowning Prevention Auckland says that they support the bill, the ARAFA Bill, the Auckland Regional Amenities Funding Amendment Bill. They support the intent of the bill. They have reviewed the submission of the Amenities Board and they support the Amenities Board submission. There is a theme here. New Zealand Opera likewise says that they have reviewed the bill, that they have reviewed the submission from the Amenities Board, and they support that submission. This will get to a point in a moment. Surf Life Saving Northern Region—exactly the same submission: they support the intent of the ARAFA Bill and they support and adopt the submission of the Amenities Board.

Mr Assistant Speaker, as I am sure has been your experience and the experience of many of our colleagues across the House, often when there are identical submissions coming in to a select committee, we become a little wary of them. We wonder who is running a campaign; if there is a particular purpose. Sometimes because the submissions are all identical, we count them up but we place perhaps less weight on them individually just because they are clearly all identical. But I submit that this is, in fact, an exception to this particular case and that even though all these submissions are virtually identical, they are pointing to something very important: that there is, in fact, solid agreement from the entities that are affected by this bill that the bill is a good bill and it should be passed.

So carrying on from there, the arts festival—the same submission supporting the intent of the bill, supporting the Amenities Board submission. The same from Mr Michael Woods’ favourite psychedelic place to go: the Auckland Observatory and Planetarium Trust Board supporting the bill, supporting the intent.

There were, however, two exceptions, two submissions that were exceptions to this virtually—and this why I have to say the word “virtually”—unanimous support for the Amenities Board submission. One, which I do want to read out, but I won’t read out the submitter’s name because perhaps it’s a point and we should listen to it, says, “Personally, I think the government spends way too much money. Too much money on Auckland, too much money on tourism, too much money on traveling and too much money on trying to fix things that weren’t broken! … Stop increasing taxes and give money back to the people you stole it from; kiwis. And if you want to spend millions on something unnecessary, then take it out of your personal bank accounts!” Well, what an interesting submission. We do from time to time get submissions where it’s clear that people have sat down with their mates late at night, had a bit of a yarn, and found something to do and put in a submission. Perhaps that was one of those.

Rather more seriously, Julia Durkin submitted on this particular bill, and she is a professional senior cultural producer and the longest-serving female festival director of an Auckland regional arts, cultural, and community organisation. She says that actually there needs to be a “broader investigation of the overall purpose of the [2008] Act itself.” In fact, she doesn’t really submit on the bill itself but she does point to a need for some kind of review needed for that Amenities Board, so perhaps that is something that could be considered at some stage in the future by people in Auckland.

So coming to the Amenities Board submission—and that, of course, is the point of all of this—the Amenities Board clearly supports the intent of the bill, and it explains very carefully why it is important. It is straightforwardly because the Act as it was written, and along with the development of accounting standards alongside it, has imposed an extra compliance burden on the entities that are affected by the bill. Now, these entities are all charitable organisations; like many charitable organisations they are comparatively small in scale. And so it is important to try to reduce the compliance burden where possible with respect to that. So that is a good reason to support the bill. So as I’ve said, a lot of unanimous support for the bill.

I do want to speak, as a former accountant, just a little bit about the difference between generally accepted accounting practice (GAAP) and IFRS for us. So that’s G-A-A-P—GAAP, as it’s normally referred to—and IFRS, the International Financial Reporting Standards. Perhaps this will be the tedious bit of the evening, but I promise you that to accountants it’s very, very exciting. GAAP are the common set of accepted accounting principles, standards, and procedures that companies and accountants must follow when they compile their financial statements.

One of the interesting things about having been trained in accountancy is having developed that understanding as a set of shared ideas as to how transactions ought to be reported, how accounts ought to be prepared, so much so that for me, when I’m trying to understand a particular way or the particular economic impact of a transaction, one of the easiest ways for me to do it is to write out a journal entry, because I understand it through that accounting framework. Having done that, I can grasp the substance of what is going on, and, of course, that’s what generally accepted accounting principles are trying to do. They’re trying to develop a set of rules that enable people who read financial statements to get a grasp of what is going on, whereas IFRS, the International Financial Reporting Standards, they’re an international set of standards and they talk about how particular types of transactions should be recorded.

The problem that is fixed by this bill is that many of these boards, the charitable entities that were affected by the particular Act, ended up having to prepare two sets of financial statements. They were supposed to prepare two sets of financial statements. Now, it’s not that difficult. It doesn’t take a lot to translate from one to the other but it was unnecessary. More to the point, it turned out that many of these entities weren’t actually even doing the two sets of financial statements. Now they were prudent. They were managing their money well. They were accounting for it properly. There is no suggestion anywhere of any impropriety or anything like that. Nevertheless, just because of the way things had fallen out, they weren’t actually complying with the law and they weren’t actually preparing those two sets of financial statements.

Perhaps, ordinarily, you might think that was possibly something that should be sanctioned and there should be a sanction associated with it, but that would be a sledgehammer to crack a walnut—not worth the effort. So this bill actually turns it around and says, no, rather than imposing that unreasonable compliance burden, let’s fix the problem. And that is, of course, the job of the Parliament: to fix the problem, to make it the best we can for our constituents and the entities that are affected. That is our job as parliamentarians: where we see a problem, to do our best to make sure that we, if can, put it right—that we make things better and easier for the people we work for.

So, as I said, a small bill—a small bill—but it has some interesting aspects to it, and it’s a bill that I think will make a difference to the Auckland Philharmonia, the Rescue Helicopter Trust, the coastguard, the theatre company, Drowning Prevention Auckland, New Zealand Opera—all good organisations, all worthy organisations, all organisations that, of course, add to the cultural and social and sporting life of Auckland. I support this bill.

Tēnā koe, Mr Speaker. An absolute pleasure to stand on behalf of New Zealand First to speak to this, the second reading now of the Auckland Regional Amenities Funding Amendment Bill. Absolutely a pleasure indeed to take my call because New Zealand First will support this private bill.

I’d like to start my contribution by noting that I’m not a bean counter; so I’m not able to give you the detail and the background relating to the accounting practices, as my good colleague Dr Deborah Russell has been able to do with her extensive background in taxation and accounting matters. And I also, too, would like to make note of my other colleague, Michael Wood, and his contribution giving us the historical background to the formation of these amenities coming together in the Auckland region. I’d note also, too, the member who has this bill in her name, Parmjeet Parmar, also too noting that she said that this doubling up was overlooked and therefore this is a small but technical bill that needs fixing, and therefore we are very supportive of ensuring this bill goes through all of its stages. As I mentioned, it is a small and technical bill, and making changes that require these specific amenities to prepare financial statements in accordance with generally accepted accounting practices.

So I would like to talk to what I know of some of these amenities, having spent 20-odd years in the Auckland region. My colleague Michael Wood talked about his relationship with the Stardome and, as a part-time stay-at-home mum, I was very much always there as a parent help whenever the school went on their trips, And, of course, coming from the Warkworth region it was always great to come into Auckland to visit some of the facilities there, and Stardome was of particular interest for all the parents. You had to get in line really quickly to put up your hand to be parent help on that particular trip. So, although we didn’t get the whole The Dark Side of the Moon, Pink Floyd experience that we heard in the House from Michael Wood, I think that for the children that went, and all those schoolchildren who have been to the Stardome, what an amazing experience that large 360-degree planetarium theatre is. What they learn about science, what they learn about their place in the world, and what they learn about space sets their minds to creative and wondrous things. So I think, really, if there was an opportunity for me to go back as a grown-up without being parent help, I’d really be excited to have one of the other amenities which are in this bill—maybe the Auckland Philharmonia, if they could play at Stardome, perhaps giving a grand rendition of Gustav Holst’s The Planets - Mars, the Bringer of War. That would be my cup of tea indeed.

I won’t go into the historical background; that has been covered. The bill has been well outlined by the member Parmjeet Parmar, who has brought this bill to the House, and the accounting practices certainly have been well traversed as well. I would just like to say a couple of other points, though: that New Zealand First absolutely supports this bill. They are common-sense measures to bring into alignment the practices of the specified Auckland regional amenities and the legislation that governs their financial reporting. And, just a quick wee note, as I finish off my short contribution: it was under National, specifically Paul Goldsmith, that the change in the Charities Act in 2015 was passed without spotting the impact that this would have on the amenities in this bill. So today we’re here as part of the process to fix that up. I’d like to commend this bill to the House.

Thank you, Mr Speaker. Of course I rise in support of this private bill in the name of Dr Parmjeet Parmar—absolutely fabulous colleague and a hard-working list MP that has brought this bill to the Parliament to fix up on behalf of these amenities that need this to save them time and save them cost.

But may I begin by saying that it’s an absolute pleasure to be back on the Governance and Administration Committee after announcing that I won’t be seeking re-election. I started my political career in 2014 as the deputy chair of the Government Administration Committee—I think, too, with you, Mr Chair, on that select committee. It’s a great select committee—such a breadth of information, and what Dr Jian Yang doesn’t understand is that there’s probably going to be a bit of a coup d’état because I’ve never been chair of that committee, and so he’d better watch himself, because it’s quite a powerhouse select committee. And, of course, no wonder this bill was referred to that select committee.

We’ve heard the bill and what it does traversed quite significantly, and I think my colleague Dr Parmjeet Parmar set it out very, very well. She set out the background. She set out the need for why the bill was so necessary and then talked about the ramifications, and while bills are not always exciting, they are of course necessary, and this is to save time and cost to these organisations that are out there providing benefit to the Auckland community.

So, look, the purpose of this bill, quite succinctly, is that it removes from the Auckland Regional Amenities Funding Act 2008 the requirement that specified amenities prepare financial statements according to the New Zealand International Financial Reporting Standards and to allow for specified amenities to prepare a single set of financial statements that comply with generally accepted accounting practices. And that, as I said before, is going to save time and cost and angst to the people that are involved in these organisations. So let them get on with the job, let them get on with providing benefit to the Auckland community, and let’s make it easier for them. And with that I support this bill.

Thank you, Mr Speaker. I rise to take a short call on behalf of the Green Party in support of the National Party member Parmjeet Parmar’s private bill, the Auckland Regional Amenities Funding Amendment Bill, and to congratulate her on the successful progress of the legislation as well as the introduction of it.

The House is in unanimous support, it seems, of this—as I think was described by the member herself—quite technical bill. It’s addressing an identified problem in Auckland for the Auckland regional amenities—and there’s a range of those from, as we’ve heard, the observatory to the Auckland Festival Trust and the Auckland Regional Rescue Helicopter Trust—where the way the legislation is currently being set up they’re being required to comply with the Charities Act, which uses and requires them to put in financial reports at a particular time of year, according to a non-profit—I think the shorthand is GAAP—generally accepted accounting practice, but the legislation also requires them to put in accounts at a separate time of year according to International Financial Reporting Standards. Primarily, those reporting standards are for for-profit agencies and don’t fit neatly for not-for-profit organisations, and all of the amenities are not-for-profit organisations.

So this legislation means they can just put in the one set of accounts that reflect the nature of their organisations, and the select committee’s consideration of this—and the member Deborah Russell well traversed the submissions in her contribution—is that there is very clear support for this legislation from everyone. The committee, I guess, found out through that process that, while this was the legal requirement, quite a few of the organisations were not—and they were just complying in terms of the Charities Act and putting in their accounts, which was very sensible but we don’t want that uncertainty for people and we want people to be able to comply with the law and for that to make sense. And this piece of legislation enables that. So we support it.

Tēnā koe e Te Mana Whakawā. I rise with great delight as an Auckland MP to take a call on the Auckland Regional Amenities Funding Amendment Bill, which is quite a mouthful but is actually, as members previously have said, a technical bill that makes a tweak. Now, many of us come to this House to pass, or to see the passing of, sort of bold, ambitious, progressive legislation—sometimes quite controversial. But also, equally, the other role that this House plays is to make sure that legislation, as and when is required, is tidied up so that legislation is accessible to members of the public, and also so that legislation actually makes life a little bit easier for people and doesn’t complicate things for them. And this bill falls into that latter category, but that doesn’t make it any less important to the people whose lives it does affect.

So what this piece of legislation, once passed, would actually do is remove the requirement that specified amenities prepare financial statements in accordance with what’s actually two different sets of rules, as it were—so not in accordance with the New Zealand International Financial Reporting Standards—and to allow specified amenities to prepare just a single set of financial statements that comply with generally accepted accounting practice.

Now, at this point, I just want to go into a little bit of detail because it hasn’t been traversed tonight previously. Often when we launch into our viewpoints on a piece of legislation, we do get questions from those who do watch us speak to these bills, asking us questions about some of the more detailed aspects of it. For example, in this bill, not a lot of people realise what specified amenities are. So, now, what this bill does is amend the Auckland Regional Amenities Funding Act 2008. Under that piece of legislation, there was, basically, a particular board that was established as a result of that principal Act, and that was the Auckland Regional Amenities Funding Board, which incidentally was also a submitter to this bill, which makes sense because they’re significantly affected by this. Anyway, that board—in accordance with the Act, Auckland Council pays a levy that the board then disburses to nine specified amenities, and those are, essentially, the organisations that are at the heart of what we’re discussing here today.

They are the Auckland Philharmonia Orchestra, New Zealand Opera, Auckland Theatre Co., Auckland Arts Festival, and, as my colleague Michael Wood mentioned previously, Stardome Observatory and Planetarium, that I like to think lies between his electorate of Mt Roskill and the Maungakiekie electorate that I’m based in, and is a beautiful place, as he mentioned as well—and of course, Coast Guard Northern Region, Surf Lifesaving Northern Region, Auckland Rescue Helicopter Trust, and WaterSafe Auckland. So if you were to look at this, this is basically a range of organisations that deliver some really important services to what is, essentially, the largest city in New Zealand and an incredibly diverse one. These are organisations that deliver arts, culture, recreational, heritage, rescue, and other safety-focused facilities and services to the entire Auckland region.

Now, I looked at some of the submissions that came through on the bill—and, actually, before I go there, I might just traverse some of the recommendations of the proposed amendments that came through the select committee. This, of course, is a second reading. And so, also at this point, I just want to acknowledge all those who submitted on this bill, took the trouble to do so—some of them were very substantive submissions as well and made some really interesting points. Two proposed amendments, substantive amendments—one, of course, was around the clarity of the commencement date, and that came through from one of the submitters as well.

Basically, there was a call to make some of the transitional provisions in this bill clearer, because the bill as introduced doesn’t actually state when the proposed changes would come into effect. And that would be important to the organisations that are affected by this because they would want to know, if there are transitional provisions, how those come into effect. And so the recommendation by the select committee that considered this bill was to set out transitional provisions in Schedule 1AA.

Now, the second point is one that I will come back to in a little bit more detail, but, basically, this is a retrospective bill. It fixes an anomaly that came into effect in 2015 because, really, the Government of the day didn’t have the foresight then to see that what they were doing then was going to cause this problem for a number of organisations—and I will come back to that, because it’s actually laid out very well by one of the submitters as well.

So the External Reporting Board’s submission was one that I found really interesting. It was quite substantive, and it lays out very clearly what the crux of the problem is. They have said, “We understand that the specified amenities in the Auckland region within the scope of the Auckland Regional Amenities Funding Board are all registered charities and therefore already subject to the financial reporting requirements in section 42A of the Charities Act 2005. The Charities Act establishes requirements for charities to report in accordance with [generally accepted accounting practice] (GAAP)”, which is a different financial standard, as I understand, and one that is actually being used a lot more than the older standard that previously these organisations were required to report to.” Going back to the quote, “or in the case of smaller charities to report in accordance with a non GAAP standard issued by” from this particular board that was submitting. And they go on to then basically say that a registered charity that determines it’s a tier 1, a tier 2 public benefit entity. That’s actually the crux of the matter here, because the two different reporting standards, one was actually more for profitable entities, and these organisations—the nine that I outlined previously—aren’t. They’re not-for-profit entities and therefore shouldn’t be subject to that same reporting standard as well. So anyway, I thought that particular submission laid out the issues really well.

Now, going on to the submission and to the points that I wanted to go into in a little bit more detail. That was the board, the Auckland Regional Amenities Funding Board, which of course is the one that disperses the levy from the council. Now, they said, “Amendments made to the Charities Act that came into force in 2015 resulted in the specified amenities having to produce financial statements, according to both the New Zealand International Financial Reporting Standards and GAAP.” So that was a little bit unfair because these organisations—already not-for-profit, generally already struggling with compliance—had to then comply with these two completely different and often conflicting standards as well. And this, as they’ve said, places unnecessary burden and cost on those specified amenities.

I spent a number of years working in the community and voluntary sector, running an organisation that wasn’t quite within, I guess, the ambit of what these nine organisations provide, but similar in the sense that, you know, you’re struggling, you’ve got to—one, not you—one has to apply for funding, one has to comply with often a number of different reporting requirements, auditing requirements. And any requirement or any burden that we can lessen for these organisations is a really good thing. It then also takes away the burden from the people who work for these organisations as well. And essentially, that’s what this bill does.

But the final point that I wanted to make is that, at the end of the day, this is a bill that fixes a mess that the previous National Government created. And that seems to be a little bit of a trend, because that’s what this Government is doing as well. We’ve inherited a mess across a number of sectors, and that’s what, for example, our infrastructure funding spending is aiming to fix. So a little bit of a change here—a bit of a mess, not a lot of foresight, and now we’re going to go about having to fix that. And in the interim, it was unfortunately those non-profit organisations that had to bear the brunt of what was a lack of thought, a lack of foresight by the previous National Government. But this bill, all said and done, fixes an anomaly. It’s a good thing for a number of organisations and a number of people, and I’d like to commend it to the House.

I call Chris Penk—five minutes.

Thank you very much, Mr Speaker. It’s not every day of the week that one gets to speak to a private bill—but it does give me an opportunity as a pedant to point out that the phrase “private member’s bill” is an incorrect one. So we’ve got members’ bills, we’ve got private bills, but a private member’s bill—there is no such thing. [Interruption] That’s right, Mr Scott. The equivalent in radio transmission terms is that irritating phrase “over and out”. One finishes one’s transmission and says “over”, meaning that it’s the turn for the next person, or one says “out”, and that means one’s finishing. Anyhoo, moving on.

This is a private bill, as I say, the Auckland Regional Amenities Funding Amendment Bill, and I was interested to read the Governance and Administration Committee report, noting the breadth of submitters. One particularly caught my eye, the Surf Life Saving Northern Region. They’re in my patch in force and I would like to recognise their contribution rescuing, actually, a couple of different bits of legislation this week, as well as many souls off the West Coast and elsewhere.

They also submitted to a different select committee earlier in this week on a different piece of legislation, so kudos to them. Others have mentioned submitters, including the New Zealand Opera. They seem to have been singing off the same song sheet and the Stardome, meaning that we could say that the support is almost universal.

So we come to the main purpose of the bill, which is really to align in the area of accounting standards. I must admit that until tonight that represented a bit of a gap in my knowledge, and the Hansard folk can decide how they wish to spell that—perhaps as the acronym GAAP, for generally accepted accounting practice. It seems to be pretty clear across the House that that’s—well, it’s generally accepted that’s a worthwhile thing to do for these various amenities to prepare their books in that way.

It’s not every day you get to do a good accounting joke or even a bad one, but I say it’s been recognised. It’s worth throwing in every now and then for the sake of balance. It’s also been marked down in the ledger by a couple of colleagues, and I’m indebted to them. I’ll conclude by just—

💬 Hon Members: Argh!

💬 Alastair Scott: He’ll be finished soon. Don’t worry.

Yes, I’m about to be struck off, I think. Anyway, on a more serious note, and in an area in which I’m at least a little less inexpert: retrospective validation. Well, this doesn’t seem to disadvantage anyone who had been relying on the rules, so that’s not a bad thing in itself, and, in fact, the overall effect of the bill is very positive, as others have noted. I also support this bill.

Tēnā koe, Mr Speaker. I rise to take a reasonably short call to support this bill—[Interruption]—that will be full and comprehensive, because it’s such a wonderful and comprehensive bill. On that note, I’d like to start by acknowledging Dr Parmjeet Parmar for sponsoring this very important bill. Also, I would like to follow my colleague the member for Mt Roskill, Michael Wood, in acknowledging the former member the Hon Judith Tizard, the Minister for Auckland Issues, who introduced the principal legislation in the first place, and, of course, I’d like to acknowledge all those members, former and current, who worked tirelessly to make Auckland a better city and a better place.

This is a small, technical but very important bill. Currently, the combination of requirements under the principal Act and the Charities Act of 2005 means that specified amenities under the principal Act would have to meet two different accounting requirements. My learned colleague Dr Deborah Russell, in her earlier contribution, explained the difference with, in particular, generally accepted accounting practice. So this bill is designed to fix that part of the problem. Again, this is a small, technical but very important bill.

In terms of technical issues in this space, we have spent a considerable amount of time talking about similar technical issues—for instance, the big three: Moody’s, Standard and Poor’s, and the Fitch group. The big three credit rating agencies and their credit ratings and their impact on central government’s and local government’s ability to raise funds.

As a member of this very busy coalition Government, I’m very glad to report that before Christmas, this busy Government introduced and passed the first reading of another technically driven bill which enabled an SPV, or special purpose vehicle, which enabled long-term, private debt financing. That particular bill was important if you look at the infrastructure package—the $12 billion infrastructure package—to build and upgrade our roads, rail, schools, and hospitals.

Now, back to this bill—

💬 Hon Members: Yes.

—ha, ha!—I’d like to echo my learned colleague Mr Chris Penk. We spent a good time when we were both members of the busy Justice Committee. We have since moved on to another select committee, as some members have acknowledged and noticed, and, pretty much, the work’s just followed us. So, whichever committee we have got involved in, that committee has become very busy, which is a good sign, because for the Justice Committee, for instance, we got 22 bills and it sent 22 bills back to the House for their second reading.

Back to this bill, again. The select committee—

ASSISTANT SPEAKER (Adrian Rurawhe): I don’t think we’ve hardly got there.

—recommended two important amendments—[Interruption] I don’t know why this particular bill is that interesting to all the members across the board. But, anyway, the second-most important recommendation recommended by the select committee is with regard to retrospectivity, because, as Michael Wood explained in detail, why it is very important for us to introduce that particular amendment is simply because that went to the very nature of this bill. On that note, probably I should say I commend this bill to the House.

It’s with pleasure I rise as a member of the hard-working, highly organised professional Opposition. Unlike Raymond Huo, the previous speaker, I’ve never been on the Justice Committee, and therefore I won’t be talking about anything that is on the Justice Committee. I’m going to talk about this bill, which is the Auckland Regional Amenities Funding Amendment Bill.

This side of the House is supporting it, obviously, because it’s come from one of our fine members, Parmjeet Parmar. She’s brought it up. She’s worked with her local community and understood over time that there’s something wrong in the way the accounting standards are being used. Effectively, tonight we are seeking to make right something that has been wrong. And really what this is about is entities that provide wonderful services and facilities in Auckland that are not run for a profit—so the International Financial Reporting Standards (IFRS) do require people to prepare reports in accordance with the generally accepted accounting practice (GAAP).

But the point of this is that IFRS really was set up for profit-making entities, and, therefore, the entities that we’re talking about—the Auckland Rescue Helicopter Trust, Surf Life Saving Northern Region, and others—are really in the wrong place. Effectively, those entities have been charged with preparing two sets of accounts, or, if not, they are in breach with either IFRS or GAAP.

So this bill, basically, says that you can, effectively, replace the requirement to use IFRS and you can prepare accounts according to the generally accepted accounting practice. This will remove cost and effort and hassle, and, importantly, mean that these entities are compliant with the law. It does require some validation, some retrospective validation, and the Governance and Administration Committee looked at that. We sought advice on whether that was appropriate. The advice from the officials was that it was an appropriate thing to be done. No harm had been done by what had happened up until now. It might have been a technical breach, but no financial material change had occurred. So, for that reason, the committee accepted it.

The other thing that is important here is many of these are run as charities, and, as charities, they are required to prepare financial statements according to the generally accepted accounting practice. So once we’ve done this, they will be compliant with the generally accepted accounting practice for charities. There’ll be no requirement to do two sets of accounts, and this will save time, money, and effort for the charities involved to get on with the work with which they’re charged with doing. We support this bill.

It is an absolute privilege to stand here tonight to make a call on the Auckland Regional Amenities Funding Amendment Bill, also known as the “ARAFA” bill. Was it “ARAFA”? “ARFA”—a-r-f-a—“Bill”?

I want to acknowledge the member Dr Parmjeet Parmar for this bill. Thank you, Dr Parmar. I acknowledge her chairwomanship. Every time I visit the Education and Workforce Committee, I’m always respectful of the chair.

Before I get on to the bill, I want to talk about my visit to Papakura High School on Monday. The principal, John Rohs—I need to say this because, every time I get up, I’m always talking about how privileged I am to be under the leadership of the Rt Hon Jacinda Ardern. I’m always saying that, and I think it’s important that we hear the voices of the community leaders, of what they say about the Prime Minister. I want to quote now Principal John Rohs. He was a principal in Christchurch, in Aranui High School.

💬 Hon Poto Williams: Aranui High School!

And he’d set out to say—kia orana to you, Minister Poto Williams. What he said to me was about his description of the Prime Minister. And I quote: “She’s made it so worthwhile to be in New Zealand.”

ASSISTANT SPEAKER (Adrian Rurawhe): Order! You need to relate that to the bill.

And I’m bringing it to the bill.

ASSISTANT SPEAKER (Adrian Rurawhe): Otherwise I’m going to have to terminate your speech.

OK. Kia ora, e Te Mana Whakawā. So I’m bringing it to the bill because Papakura is in Auckland, and we are the biggest city in New Zealand. The Rt Hon Jacinda Ardern lives there, and, of course, Anahila Kanongata’a-Suisuiki—I live there as well.

So this bill was—I’ll just give you a brief history, in case they have forgotten. The bill was introduced on 12 September, and it had its first reading on 25 September and was referred to the Governance and Administration Committee. I might say I have not been with the Governance and Administration Committee. I have not been a visitor to that committee, and I look forward to it. Today, from that awesome committee, they recommend that they have examined this, the Auckland Regional Amenities Funding Amendment Bill. They have examined it and they report that we should support it. I’d like to take this opportunity to acknowledge the select committee: the chair, Mr Jian Yang; Ginny Andersen, a member in the Hutt south; Kanwaljit Singh Bakshi; Sarah Dowie, who spoke earlier before; Paul Eagle, the awesome member for Rongotai; the Hon Peeni Henare, the current member for Tāmaki Makaurau; Willow-Jean Prime; Lawrence Yule; and, of course, contributions by Dr Parmjeet Parmar.

I want to continue my acknowledgment of the 12 organisations that had provided submissions—

💬 Hon Member: Who were they?

—and out of the 12, nine had actually supported it. So the question was, who are they? I will oblige by naming all 12. They were the Auckland Philharmonia Trust; the Auckland Rescue Helicopter Trust; the Amenities Board; the Coast Guard Northern Region; the Auckland Theatre Co.; the Auckland Regional Amenities Funding Board, again; Drowning Prevention Auckland; the External Reporting Board; the New Zealand Opera; Surf Life Saving Northern Region; the Auckland Festival Trust; and, of course, the Auckland Observatory and Planetarium Trust Board.

When I read this bill—I’m not a member of the board—it reminded me, as a 15-year-old, of when I was filling out the tax returns for my friends and families, and charging them a donation of 20 bucks, and it also reminded me—and I want to acknowledge all the non-Government agencies out there—of when I was the treasurer for Pacific islands women’s group PASIFIKA, when I was completing the end-of-year accounts. It reminded me of that, because my brain, like the observatory in Onehunga, it almost exploded into the universe. So when I read the bill, that’s what it actually reminded me of.

It is a very important bill, because what the bill, in simple terms, is saying is it’s for the organisations whose livelihoods depend on this—the Auckland Regional Amenities Funding Amendment Bill is about completing one set of accounts. And I want to get to that. I want to say—yeah, it’s one set of accounts.

💬 Hon Meka Whaitiri: Shared services.

That’s right. So the bill seeks to amend, and what it would correct, like our previous speakers have spoken about, is an anomaly in financial reporting requirements that apply to special amenities such as the Auckland Festival Trust. Tonight, in Auckland, in every March, for the last I think four years—12 years, actually—we’ve got the Auckland Festival. And tonight, I know that you’d rather be listening to me than be in Auckland listening to Hollie Smith—she kicks off the Auckland Arts Festival—where she’s going to be singing the Māori version of “Bathe in the River”, or the “Bohemian Rhapsody”, in waiata, in Te Reo Māori. I don’t think everybody would like me to sing it; they would prefer that Hollie Smith does it. That’s one of the charities, which is the Auckland Festival Trust.

I want to make special mention that it has been 50 years since the Auckland Rescue Helicopter Trust have been in operation, saving lives in Auckland for 50 years. I want to say thank you for what you do. The Surf Life Saving Northern Region, at a glance: they have, in the last year, 427 rescues, 1,000 youth aide teachers, and 43,000 prevention actions involving over 128,000 people, all of those in 88,500 volunteer hours. I just want to say thank you to the Surf Life Saving Northern Region. Thank you for what you do.

Last, but not least, in terms of the organisations that I’m going to acknowledge, is the Auckland Philharmonia Trust, which also provides a programme at the Vodafone Events Centre in Manukau, which is in Auckland south, or South Auckland, as everybody knows. I really like their programme. They especially have a one-off programme called—well, the special concert of “Pese! Fasi! Pūoru!” And it’s about music for everybody, making orchestra something for everybody.

So, like I’ve said before, the member Dr Deborah Russell referred to International Financial Reporting Standards (IFRS) and she referred to generally accepted accounting practice (GAAP), but the bill would replace a requirement for specified amenities to prepare financial statements in accordance with the New Zealand equivalent to international financial reporting standards with a requirement to prepare in accordance with generally accepted accounting practice. So when I heard “GAAP”, I was thinking “What’s GAAP?” Anyway, I realise now that it is the “generally accepted accounting practice”.

Again, I just want to remind the House what the purpose of this bill is. The purpose of this bill is to remove from the Auckland Regional Amenities Funding Act the requirement that specified amenities prepare financial statements according to the New Zealand International Financial Reporting Standards—which is, like the member Dr Deborah Russell referred to, IFRS. It is to allow specific amenities to prepare one single set of financial statements that comply with generally accepted accounting practice—that comply with GAAP.

So like I said before, my head when I was listening to the member for Mt Roskill, Michael Wood, talking about the Stardome at One Tree Hill, when I studied this bill—yeah, my head almost exploded into the atmosphere, because I think for most people it says “tiny anomaly”, but actually, as a ratepayer in Tāmaki-makau-rau, in Auckland, this is important so that we enable these nine groups that are receiving funding from the Auckland Regional Amenities Funding Board to complete their financial obligations.

Again, I want to acknowledge all 12 organisations that submitted. I don’t think I will oblige by repeating who they are. But I want to also acknowledge the select committee, who have actually recommended that we support this bill, and, of course, last but not least, the sponsor of the bill—and it is a member’s bill, not a private member’s bill. That’s an obsolete word, “private member’s”. It’s a member’s bill from Dr Parmjeet Parmar. Thank you very much for this bill, and congratulations. On this member’s day, I would like to commend this bill that has been recommended by the committee. I would like to commend it to the House. Mālō ‘aupito.

What can you say to that, eh? Ten minutes of fluffing around, but well done to you—well done to you! Great. You’ve done the best speech tonight—you’ve done the best speech tonight. Mine is going to be so very short, because every aspect of this bill has been traversed tonight, and a lot of other areas that had nothing to do with this bill. But I just want to congratulate my colleague Dr Parmjeet Parmar for this wonderful bill, and I commend it to the House. Thank you.

Bill read a second time.