Companies (Levies) Amendment Bill

I present a legislative statement on the Companies (Levies) Amendment Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Companies (Levies) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 10 November 2022.

The Government’s intention in introducing this bill is very simple: it’s to give the New Zealand Companies Office the ability to charge users of those registry services levies as well as fees as it does now. It needs the ability to be able to charge for the services that it provides. The new levies, which will be set by regulations after public consultation, will help the Companies Office run its registry services in a modern, efficient, and transparent way. As members of this House will recall, two weeks ago on Budget night, the Companies Office Registers Funding Validation Bill 2022 was passed under urgency. During the passage of that legislation, I explained to the House the difficulties that our Companies Office has run into with its funding. In a nutshell, it’s been moving funding between registers in a way that is not in line with the legislation or with the expectations of the Parliament or, indeed, as intended by Parliament when the process was originally set up.

As I explained to the House on Budget night, since we discovered the issue last year, the Government’s been working on short-, medium-, and longer-term solutions to the issue. Essentially, that boils down to two statutes. The first of those was passed on Budget night, and I want to thank members across the House for their support with that retrospective validating legislation that validated the collection and use of fees by the Companies Office. The second piece of legislation is this levies bill we’re looking at now, which looks forward, provides a long-term funding solution to help the Companies Office to efficiently administer its registers.

I’m pleased, in a way, that we’re able to turn a problem here into an opportunity—an opportunity to move the Companies Office forward. Originally, it was there with a few paper-based registers that it was designed to oversee. Of course, the world moved on. Today, it administers 16 different online registers, and they include registers of entities such as companies, incorporated societies, and retirement villages, professional services registers for licensed auditors and insolvency practitioners, and registers for disclosure of financial products and security interests over personal property.

So by effectively managing those registers, what the Companies Office does is not only make that information available to the public as it’s needed or required but also helps to build trust and confidence in the transparent, fair, and easy domain. We pride ourselves in New Zealand as a place that’s easy to do business, but it’s important to be also recognised for transparency and fairness. So the Companies Office thereby provides wider benefits as well by also registering not-for-profits and providing the public with access to important information.

The Companies Office has, of course, over all that time, taken on more and important responsibilities, as I’ve outlined. But it’s also had to, with that, make the most of the advances that have come about through modern information technologies. So its evolutions have been of significant value, making it easier and quicker for people to interact with the Companies Office and search online for information they need from the registers. And although the Companies Office has been growing and evolving, we’ve still got the original legislation which speaks to how it’s funded, and it is time to update that.

As it stands, the Companies Office is still required by legislation to charge and use money collected as fees separately for each of its 16 different registers. Money collected from users can’t be used to fund the administration of another register—that’s the way the legislation is currently drafted. It can’t pool any of those funds to use for the good of the registry systems as a whole, nor to make things fairer for the smaller users of registry systems; for example, the incorporated societies, trusts, and others that also use registry systems. So once regulations are set using the levy-making power in the bill, the Companies Office will be able to collect and use money more flexibly across the registry system as a whole, and that will lead to more appropriate and efficient use of the money by the Companies Office.

Due to the need to move quickly towards a new funding model for the Companies Office, we’ve introduced this bill without public pre-consultation on the underlying policy. And I have to say, as Minister, I’m very conscious of that. The users of the registry will want to have a say in how the registry operates and how the levy-making power is used, and how much they, of course, each will need to pay when they use the register in future. So I’m pleased therefore that they’ll be able to participate in the select committee process of this bill in the coming months. That will provide the opportunity for the public, for users of the various registries to have their say, and perhaps more importantly again, the bill provides for a requirement that before any levies are set by regulations themselves, there needs to be a full consultation with those who are affected. The consultation will cover who is charged and how much, what the money is intended to be used for and why, and how the levies will be paid.

As well as consultation, the bill provides other safeguards to make sure that the levies are set at a fair and appropriate level. These include principles that have to be adhered to and an express stipulation that the Companies Office cannot collect more money from users than it needs to recover its overall costs. So you can see that the framework as it’s set out in the legislation is aiming to achieve a fair and efficient system—one that will support the registers to operate efficiently, provide transparently the information that people would seek from them, and to do it in a way that does not collect more money than is required to fund the use of the system.

So I’m looking forward to the committee’s consideration and report back to the House of this bill, and I commend this bill to the House.

Thank you, Madam Speaker. It’s a pleasure to be talking on the Companies (Levies) Amendment Bill, first reading. Well, here’s a Minister who tonight has had a very busy role, actually. We’ve had three bills—one we agree with. The last one, the Financial Markets (Conduct of Institutions) Amendment Bill, was an absolute waste of time, and I’ve got to say this is a waste of time as well, because this bill should not be coming before Parliament. This bill goes contrary to all the good principles of Government. This bill goes against the principles that were set out in the original legislation that created all these registers.

This bill is simply wrong, and I’ll tell you why. We did correct the mistake that the Companies Office had inadvertently done, and we did it with the blessing of the Minister and with the blessing of the House. That was the Companies Office Registers Funding Validation Act 2022. We did that because there was a wrong. We did that because the funding that had built up and had been inappropriately applied by the Companies Office was wrong. We did it because the legislation that set up the 16 registers required that funding levies should be done on a cost basis. That’s why we agreed to amend and support the bill that was put through under urgency on Budget night.

But it is absolutely wrong to perpetuate a wrong, and this is what this bill does. It says, “Look, we corrected what was going on incorrectly for the last few years.”, but then to put up another bill to say, “We’ll just keep doing the same thing.” is absolutely wrong, and I don’t know why a Minister is actually in the chair trying to promote this as a good reason. I haven’t heard, in the speech that he gave before, what is absolutely driving this bill that cuts across the core of how Government departments should charge—namely, on a cost recovery basis.

I used to sit on the Regulations Review Committee for three years. A number of members in this House sit on the Regulations Review Committee. It is going to the Finance and Expenditure Committee, and I would be absolutely surprised if the Regulations Review Committee don’t write a nasty letter to the chair of the Finance and Expenditure Committee and say, “This is wrong.” So why is the Minister so hell-bent on bringing legislation to this House and wasting the House’s time trying to perpetuate these types of bills? It is wrong, Minister. You have a better responsibility than to do this.

I’ll suggest to you why this is wrong: the first thing is that levies are specific in that they are to achieve a revenue to recover the cost—the cost, and no more. When I sat on the Regulations Review Committee, there were a number of Government departments we took before us and made sure that their charging was appropriate. In some cases, it wasn’t and it had to be changed. The second thing is it’s contrary to the original legislation. That is a fundamental change, and why should a new Minister set about amending what was in the original legislation?

The second thing is it’s actually unfair. It is unfair because, if it was to be fair and if it was to be equitable, you would have to have the same users of all 16 registers experiencing the same outcome. That is not the case. Because the registers administered by the Companies Office are so varied, there will be inherent inequities in the arrangements.

I’ll just note that we talked about the Companies Office, but it includes the incorporated societies registers, and we talked about the financial services provider register, limited partnership, disclosure register, auditors register, retirement villages register, friendly societies, credit unions, building societies register. Now, none of those has overlapping requirements or fees that should be charged as part of the 16 registers approved or overseen by the Companies Office.

This is fundamentally inequitable. There will be some users of some of the registers who will be seriously disadvantaged, and we know that under the previous bill that we passed under urgency, over $3.7 million was actually misallocated by the Companies Office. So there is no way this bill could ever result in a fair and equitable outcome for the users of those registers.

The other thing about this is that it is a bad precedent to be setting in this House. There is no way that we should be moving to a system where we allow Government departments by regulation to set fees and levies without being explicit what the basis is and making sure costs lie where they ought to. It is wrong, and the National Party will not be party to any bill that changes that precedent and that principle that has underwritten a lot of legislation to date.

The whole issue about the regulations in the regulation power set out in the bill is it is absolutely wide-ranging, and so even if you accepted the principle, what’s set out under clause 4(5) is tantamount to allowing a free carte blanche to officials, who will lobby their Minister to get an outcome that may be appropriate and easy to achieve but is actually wrong and maybe, in many cases, I suspect, will always be unfair for many users of those registers. I just reiterate that we do not support this, and in fact it’s interesting some of the commentary that has been already written about this pretty uninspiring bill that was passed under urgency. Already, people have written—particularly, for instance, Ian Llewellyn from BusinessDesk: “While the original validation law was passed, officials said it was ‘unusual’ for the Government to be retrospectively correcting a historic mistake, but the harm done was minimal and the Companies Office has been acting in good faith to keep overall costs down.”

That is correct, and that’s why we all supported that bill back in the Budget. It is fundamentally wrong to be supporting this bill tonight, and we will oppose it throughout all stages of its progress, but, unfortunately, we know we’ve got a Government that will be blind to representations from people who, no doubt, will make submissions to the Finance and Expenditure Committee, and they will be blind, ultimately, to the people who will say, “These levies are unfair for us. You should not be doing that. You’re cutting across the principles that were enshrined in the original legislation.”

So that’s why we will end up with a fee structure that is inappropriate, and I’d have to say that I think this is a lazy piece of legislation. The Minister should not be supporting it. He should have beaten this back and said to the officials, “There’s no way I’m going to stand up in the House and promote this type of retrospective and prospective legislation that will create further harm to many ordinary New Zealanders in New Zealand, at a time when we’ve got a cost of living crisis.” This is a particularly bad bill.

The question is that the motion be agreed to.

Kia ora, Madam Speaker. I’m not sure if Mr Bayly was listening to our busy Minister Clark, who has this as his third piece of legislation, as you said, tonight. But I think he made it very clear in his opening remarks about why this is important.

This legislation, since its conception in 1993, has been flawed. There have been issues with it, and even looking back in 2012, when the Ministry of Business, Innovation and Employment was established, there were challenges that our officials have been trying to figure out on this. Now, with our modern IT systems putting things in place, this very much is a process of unders and overs and looking at it. It’s not, as the previous speaker said, about being unfair; I think it’s finding a way that we can actually have a fairer system.

I want us to trust the public on this one and to take it, obviously, to select committee to hear what the public has to say, because I think we can trust them, and, Mr Bayly, I hope you can trust them too. I commend the Companies (Levies) Amendment Bill to the House.

Thank you, Madam Speaker. I’m not sure if I should actually say it’s a pleasure to get up and speak on this bill in its first reading, the Companies (Levies) Amendment Bill. As Andrew Bayly has laid out, the National Party will be opposing this bill, but, no doubt, because of the majority that the Government has, it will go to select committee, and the Finance and Expenditure Committee will look forward to the submissions of the public. I’m sure that there’ll be lots of people who will be complaining about this.

The issue that I have with this is that there are 16 different registers, including entity registers like the companies register and occupational licensing registers, and each of these registers were actually established with separate pieces of legislation guiding their operation. As Andrew Bayly has said, levies are set for the purposes of collecting the cost of doing the business—as in Government administering the register, the cost of doing that. So for example, if the Minister was collecting a levy for his work in terms of his portfolio, and his colleague sitting next to him was collecting a separate levy for doing his piece of work, imagine if his colleague, who has a much smaller portfolio which requires less money, dipped into the pool of the Minister’s levy collection. This effectively means that it’s an uneven playing field for different registers, and yet it is pooled into one.

That is cross-subsidisation, and if this bill supposedly, as the Minister said, evens out and makes things fair, does that mean that every single person who is on a different register will be paying exactly the same levy? Because paying exactly the same levy when it is actually pooled and everybody is dipping into that one pool is what I call fair. But if they are all paying different levies because they belong to different registers and yet the administration of it is being done by one entity and one pool of money where anybody or any entity out of the 16 registers can dip into, that is what I’d call a slush fund for the Government. Effectively, that should be called a tax, not a levy, because a levy is only about recovering the cost. The only way that it can cross-subsidise an unprofitable register is because another register is making a profit. The intention of the original pieces of legislation would have never, and the Parliament that actually made that law would not have made it, because the Government wanted to make a profit by giving a levy or charging a levy to people who were registering for the purposes or registering a company with the companies register, for example. It was purely for the collection of money.

The change that we instituted during the urgency during the Budget process is because it was discovered that this was actually happening for decades. What was meant to be 16 different registers supposedly charging a different levy were supposed to have been managed individually, not dipping into another register’s funding. But this activity was happening for decades and it was illegal. So, effectively, what Parliament actually did under urgency was making—the Companies Office Registers Funding Validation Act 2022, the validation Act, literally made illegal legal. So I would have thought that the Minister, having done that—making that illegal activity legal—would go back to his office and figure out how to make it fair and actually make the practices legal, and not make illegal legal again.

This is like an extension of the illegal activity that was what we validated. I just don’t understand how he could actually call this a fair system where, as I said, effectively the 16 registers still collect different levies and now charging a fee as well. I’m unsure how the entities are going to be charging every person who registers a fair fee when the money that they collected is not just for the operations of the register, as in cost recovery, but some other register, effectively, has dibs into that pool of money that the Government is creating.

I believe that this is actually a very poor piece of legislation—

💬 Hon Michael Woodhouse: Lazy.

—and very lazy—you’re right, Mr Woodhouse—and I don’t think that members of Parliament who passed the original pieces of legislation, who wanted cost recovery only from taxpayers, would be happy with what the Government is now trying to do, because levies are not meant to be a profit-making activity by the Government or a slush fund for the Government, effectively becoming a tax. I do not support this bill.

Thank you, Madam Speaker. The New Zealand Companies Office, as we’ve heard tonight, administers the corporate registry system of 16 registers—and supports other statutory functions as well, I think it should be noted—and this bill, the Companies (Levies) Amendment Bill, simply amends the Companies Act 1993 to create a new regulation-making power, essentially providing for levies to be paid by users. That makes it fairer.

Our Companies Office has been a critical part of our economy and our society for many years, and I think it’s well known that the office maintains a register, that it’s made public, and that it’s part of something that builds the trust and confidence of people in the economy, because it makes sure that that information is transparent and fair and that people can understand it. And certainly with the passage of the validation bill that passed on Budget night, this levies bill will allow for the introduction of levies that can be used, as has been said, across the 16 registers that the Companies Office operates, which is a good thing. For that purpose, I commend this bill to the House.

Tēnā koe, Madam Speaker. It’s a pleasure to speak on the first reading of the Companies (Levies) Amendment Bill, and just noting that this bill is coming after the Companies Office Registers Funding Validation Bill and this kind of ties everything together by effectively amending the Companies Act of 1993 to create a new regulation-making power that will enable regulations to be made that impose levies on certain users of the register administered by the New Zealand Companies Office. I think what it is important to note here is that these powers will expressly provide that the money collected in levies can only be used to fund the registry system as a whole rather than on a register-by-register basis.

I note that the Minister has had several bills come today. I also wanted to acknowledge his comments around the lack of public consultation prior to this bill coming forward. I do think the select committee stage will provide an opportunity for public scrutiny and for some of the concerns raised by the members of the National Party to be addressed around whether this bill actually creates inequities within the systems and perhaps puts some companies at the disadvantage. I think this is what the select committee is there for. Otherwise, for us, it’s a common-sense bill and a relatively minor technical bill to tie the validation bill together. So we commend this bill to the House.

The Government has introduced this bill, which allows them to consolidate the charging models for the Companies Office register. At the moment, what is happening with the services costs for each register and how it’s being cross-subsidised is actually unlawful and against the law. So ACT’s view is that we will be supporting this bill to select committee to get to the bottom of how this should be done better, and also how this bill, which amends the Companies Act 1993, will help to regulate Companies Office activities. It’s a package that we supported, which will run alongside the Companies Office Registers Funding Validation Act 2022.

So my understanding of this bill is it permanently puts in place charges made under the Companies Office registers, which allows the Companies Office to manage the portfolio in collecting and administering fees. That’s what I’ve interpreted the bill to be. And it makes legal any prevailing practice of using levies from large registries to fund small ones. The bill amends the Companies Act 1993 to create a new regulation-making power that will enable regulations to be made that impose levies on certain users of registers administered by the New Zealand Companies Office.

The regulation-making power would expressly provide that the money collected in levies can be used to fund the registry system as a whole, rather than on a register-by-register basis. The New Zealand Companies Office business unit of the Ministry of Business, Innovation and Employment will administer the companies registry system. And, as my colleagues in the National Party point out, there are 16 different registers, including entity registers, the Companies Register, occupational licences, insolvency practitioners, and other property services.

The Companies Office also supports other statutory functions of the various registrars responsible for these registers, and each register was established under separate legislation. So the legislation requires each register to be independently funded from fees charged to the users of the relevant register. This funding model was predicated on each register being operated separately. Over time, the Companies Office has moved towards providing shared services to the registers. A unified approach to the register allowed the Companies Office to establish an organisational structure, an operating model that produces economies of scale in the delivery of registry services and has the ability to leverage technological developments, enabling registry services to be centralised and shared across registers.

These changes have contributed to reduce costs to users. However, it has also made it increasingly difficult to distinguish between the costs of providing the service for each register. In addition, the fees charged in some smaller registers have not kept up with the costs of upgrading them. This shortfall has been met from surpluses that have been generated from fees collected under legislation governing other registers. This practice is not authorised by the legislation. The Companies Office’s unauthorised funding practices have been addressed by the Companies Office Registers Funding Validation Act 2022—the Validation Act—by retrospectively validating the Companies Office charging and expenditure practices.

This bill, which forms a package with the Validation Act, supports the Companies Office approach to running the corporate registry system by moving away from being entirely funded on a register-by-register basis, as it is now. This bill, we believe, achieves this by amending the Companies Act 1993 to allow for regulations to be made for the Companies Office to charge its users levies as well as fees. The money collected in levies will be able to be used across different registers to fund the shared registry system, and the bill provides that the levies will be set by regulations following consultation. It also sets out the purpose of the levy-making power, which the Minister must have regard to in recommending to the Governor-General that regulations should be made by Order in Council.

So the major area of change in this bill is to allow the register to charge levies as well as fees, which go towards supporting all 16 registers listed in the newly added Schedule 14. The benefits and costs of the standard practice of using fees from all 16 registers is made legal and the main beneficiaries—theoretically, entities on the smaller of the 16 registers are beneficiaries, as this bill enables companies to be charged levies to help fund their registers. However, the reality is that this is not currently the status quo. So in terms of cost, theoretically, entities on the Companies Register are paying the price, as the bill enables companies to be charged levies to help fund the registers. However, the reality is that this status quo—and we’ve already supported the Companies Office Register Funding Validation Act—needs to be brought in line. So we look forward to the Minister’s commitment to allowing for submissions at the select committee, and as part of the Finance and Expenditure Committee, we’ll be going through this thoroughly. ACT supports the bill on its first reading.

I’m not sure I can add much more to the excellent explanation from the previous member, Damien Smith. This bill is about efficiency and about equity. It’s efficient because it brings one less bureaucratic system into play, taking away from the 16 that were previously having to do their bureaucratic churn, and it’s equitable because more fees can’t be collected than what is necessary. So there’s not much more to add. It enables economies of scale. I feel the Opposition is catastrophising what is a very simple thing around efficiency and equity. I commend the bill to the House.

The next call is a split call. I call on Simon Watts for five minutes.

Thank you very much, Madam Speaker. I rise on behalf of the National Party and as a member of Parliament for North Shore on the first reading of the Companies (Levies) Amendment Bill. National will be opposing this bill for a number of reasons, I must say, many of which have been canvassed already. But this is a remarkable bill—I mean, I actually wasn’t sure whether my colleagues down the end there in ACT support it or oppose it. I think they said they support it, but anyway we won’t get caught in the detail. Maybe they’re not reading the same bill I’ve just read.

This bill is absolutely a solution looking for a problem, and the context in which we’ve heard already that, actually, they’re trying to implement—look, let’s get back to basics. Why are they doing this? They, basically, need to collect more revenue to cover more overheads in a system, and this is a great way in which they think they can do it. It’s, basically, another tax system that they’re going to try and implement. The fact that this is being used to cross-subsidise other aspects of expenditure and going across the core principles around cost recovery is, as my colleague Andrew Bayly says, just completely inappropriate, and the role in which these charges should be to just simply cover costs is around the fact that that cost-adequacy model needs to be balanced. But, in effect, what this is going to allow is just simply a charging model that is disproportionate and is going to be used and soaked up in other aspects of the broader system. For that reason, that’s why we’re opposing it.

The other point that was made earlier on from my colleagues was around the challenges around the fee structure actually going to be unfair and unjust in terms of it as a broader system as a result of this legislation. That is a real concern, and I think that fairness element in terms of the way in which this will be implemented is really important. I think, again, in the way in which this bill is drafted—and we’ll see where this goes as part of the select committee process. But if it follows its normal trajectory in terms of how things happen in this House, then I’m not holding out too much hope that we’re going to see significant reform or have the select committee saying, “Actually, let’s just throw this bill out well and truly.”

Probably, that would be the most sensible thing to be doing, but, as I say, while we’ll be hoping that that happens, hope is not a strategy, is it? We know that. The reality is these guys will ram through this legislation, using their majority at any cost, and that is a real shame, because the fee structure of the system in which this legislation will oppose will be unfair and unjust, and the harm that is being done in regards to current state—as has being quoted—is minimal.

So what’s the case for change? I listened to the Minister, and I hear on the other side all the gratitude to their Minister for all the good work, etc., etc. Well, he stood up and gave his opening gambit around the bill and didn’t actually articulate what’s the problem statement that this legislation is actually up to resolve. What is the problem that this is going to fix? He didn’t say it at all, and sort of from a first-principles point of view, surely a piece of legislation like this should be trying to solve, or should be solving, a significant issue that’s going to bring value in terms of the broader system.

This thing fails on all levels, and, as my colleague Michael Woodhouse mentioned as well, the wastage of time of putting through a bill like this, which is not going to achieve outcomes, which is going to reinforce the lack of harm that’s being done in the system, and which implements something that’s going to be unfair and unjust, is just ridiculous. But, as we know, that’s pretty much status quo for this Government, and we’ll continue to see how that progresses as we go through.

I think the other element here—and it was good see it’s going to the Finance and Expenditure Committee (FEC). As a member of the FEC, I’m going to enjoy putting some good, tough questioning around this and seeing what type of responses we get back, because this is just opened up for a whole lot of challenge. So we’ll go through that process and we’ll see where we go. But, as I said, National do not support this legislation. We don’t believe that it’s going to achieve the outcomes that it is intending to do, and for that very basis, National will be opposing this bill.

Thank you, Madam Speaker. It’s a pleasure to take a short call on the Companies (Levies) Amendment Bill. The previous speaker, Simon Watts, just noted he wasn’t sure what the problem was that this bill is seeking to address, so I just thought I might remind him that earlier this year, it was discovered that there had been a mismatch between the fees set and the different registers that are covered already by the legislation. So it was addressed under urgency, but there needs to be a longer-term solution in place, which is what the Minister is bringing forward.

I just want to reassure members on the other side, who seem to be claiming that the sky is going to be falling, that the bill actually inserts new regulation-making powers for the Minister, and one of the recommendations here is that the levy should be set to recover no more than a portion of the cost of operating the registers, the cost of a registrar performing or exercising their functions, duties and powers, and the costs of recovering the levy moneys.

So on that note, this is an excellent bill. It will go through the select committee process so that members of the public can have their say, and I commend it to the House.

Thank you. It’s a pleasure to rise in support of the Companies (Levies) Amendment Bill. I’ve been sitting in this House listening, too. I agree with my friend and colleague Ingrid Leary that there’s been a little bit of catastrophising going on about this. This is a situation where it’s really simple. This matter will be consulted upon with the public, will come to the Finance and Expenditure Committee. It will go through a process where, actually, after public consultation, there will be a Minister’s recommendation. It will then go to the Governor-General. It will be signed off; a levy will be allocated. If people do not pay the levy, they will not get the service. If they do pay the levy, they will be getting quite good value for money out of our Companies Office, because that office has changed enormously since 1993. So it is a situation where I am very happy to hear the matters about this at the Finance and Expenditure Committee shortly. Thank you. I commend this bill to the House.

Well, thank you, Madam Speaker. In summary, this is a lazy piece of legislation from a lazy Minister and a lazy Government who can’t count, can’t tot things up, and takes the easy way out by sticking in a slush fund and picking from that any levy, which is, effectively, against the laws that are already in place.

Now, let’s refresh. There was a problem. It was a plague on both Governments because the Companies Office were acting ultra vires. They were acting outside of the laws, and, frankly, the conventions that go around levy-setting processes. We had to fix that. We fixed that in Budget urgency, and the National Party supported that because there was an element of responsibility for where we’d got to. What we did not contemplate was the fact that not only do we do that retrospectively, we go, “Oh, well, the sky didn’t fall in; let’s just keep doing that.”, and provide ourselves with the legal framework to do bad levy-raising into perpetuity.

💬 Hon Mark Mitchell: Not appropriate.

And it isn’t appropriate, Mr Mitchell; you’re absolutely right, because the difference between a tax and a levy is that levies have to be specific to the costs that are incurred in producing the service. We have a plethora of them right across the Public Service. As Minister of Immigration, I looked after a very large number of immigration fees and levies. [Interruption] Well, thank you for the nostalgic reflection, Mr Watts. I do, too, but it’s only 16 short months away, maybe less, before there is a change and order will be restored to so many public services.

But it’s actually a legal requirement to make sure that the revenue collected in levies matches and is not more than the costs incurred in providing the service. It’s not like a general slush fund. It’s not like a GST or an income tax. There were 16 of them for a reason, because each one of those levies incurred a different set of costs incurred by the Companies Office to manage the various registers that they did. There was nothing wrong with the framework. The framework was sound. It’s the same as what we do in immigration. It’s the same as what we do under the ACC legislation, biosecurity levies, aviation levies, energy resource levies—any number of levies that we could think of are legally required to be set up in exactly the same way as the 16 Companies Office levies were. What’s the difference? Lazy Government, lazy Minister.

Just imagine if the ACC scheme came along and said to the ACC Minister, “Look, we manage four or five funds. They all have different costs and we impose different levies, but that’s all a bit hard. Let’s just chuck it in a single slush fund, divide it by four, and put it out to the various funds. The motor vehicle levy could be the same as the work account levy or the same as the treatment injury levy.” There would be an outrage, and rightly so, because, of course, those costs don’t fall proportionately across those levies. They don’t here either. And the idea that this is somehow minor and inconsequential, giving the Government a reason to be lazy is quite wrong.

These 16 funds should be managed appropriately the way all the other levies are. My colleague Simon Watts, a very good chartered accountant and I’m sure he knows management accounting principles—I also, having been an accountant for 25 years, know actually that this stuff isn’t that hard. It’s not that hard. It’s not a manual process.

The cost allocation methodologies, the systems that underpin them, are actually pretty easy, and it’s important because if I was the levy-payer for an incorporated society, I would want to know I was only paying only the costs of managing that register and not the much larger costs of managing, for example, the Companies Office register. That’s not fair, but under regulation-making powers that’s exactly what could happen.

Now, I will be very, very interested to know not only what the submitters have to say to the select committee but what the very fine chairman of the Regulations Review Committee will say about the legality of the regulation-making power in these circumstances. Now, I’ve read McGee. He’s not that specific about it, but he strongly implies that the levy needs to be matched to the cost, and slush funds of this nature may well fall foul of the Regulations Review Committee. In fact, it’s probably necessary and, I think, appropriate for the Regulations Review Committee themselves to make a submission before the select committee. We could have one select committee making a submission to another select committee. We have select committees that meet jointly. Why not have them across the table and actually duke this out? Because this is very poor regulation-making power and it’s certainly very lazy lawmaking power.

I have every confidence that my colleagues in the Finance and Expenditure Committee, a committee I’m very fond of—I’ve been a member of it twice, and I think Mr Smith is also on the committee. I think ACT are supporting the bill at first reading, but perhaps as they listen to the arguments that we are making against this bill, because it’s lazy, because it’s being led by a lazy Minister, a lazy Government, into lazy legislation—actually part of a track record, I think, of that Minister—then maybe the ACT Party might have a different view of that when they hear the submissions.

The reality is that those 16 funds actually comprise probably hundreds of thousands of levy payers, and those hundreds of thousands of levy payers rely on us elected representatives of this House to make sure that we do right by them, that we understand the law and the legal frameworks and the conventions and the constitutions that go along with raising levies. Goodness knows they’re high enough as it is, even when the costs are appropriately gathered where they fall and those levies do reflect accurately. But the risk of cross-subsidisation that will go on if this law is passed and the Government passes regulations exactly as they have said they will makes this quite the wrong thing to do, and I think even the Labour members of the Finance and Expenditure Committee need to look within themselves. They aspire to ministry. They know that there are Ministers holding seats around the Cabinet table that might be not that long for this world. Maybe they can impress the Prime Minister and the Deputy Prime Minister, who will soon be the Prime Minister, with their acumen, their honesty, their integrity around passing very, very robust legislation, not lazy law, and maybe come up.

I think that could be an awkward conversation in the Labour caucus room when they realise quite how slack this piece of legislation is, and I’d love to be a fly on the wall when that happens, but the reality is this is not good law. It’s bad law. It’s lazy law. It may be unlawful law in the context of the regulation-setting process, and we cannot support it. I look forward to the hard work that the committee will do. I look forward to their findings, and I can’t commend it to the House.

The question is that the motion be agreed to—

💬 Hon Michael Woodhouse: Point of order, Madam Speaker. Standing Order 53(1) enables the House to go past 10 o’clock for the purposes of not interrupting a member’s speech. That time having been come, it wasn’t the time to put the question to the House, under 53(2), as there was one more speech to go. The fact that nobody called for it is not actually a reason to go to the vote.

💬 Tangi Utikere: Speaking to the point of order, Madam Speaker. The Speaker, you, moved to put the vote and the member took the point of order at the time that the vote was being taken.

💬 Hon Michael Woodhouse: Speaking to that point. If Labour had decided not to take the call, call 12, that it was entitled to, there was every possibility that one of my colleagues in either the ACT Party or National Party would have taken that call.

ASSISTANT SPEAKER (Hon Jenny Salesa): The Hon Michael Woodhouse can take his seat. No one else actually took a call.

💬 Hon Michael Woodhouse: They didn’t get the chance, Madam Speaker. You went straight to the vote.

ASSISTANT SPEAKER (Hon Jenny Salesa): Well, no one else actually stood up, and you had finished your call. So no; it is now my turn to go ahead.

💬 Hon Michael Woodhouse: It’s still a breach of Standing Orders, Madam Speaker.

ASSISTANT SPEAKER (Hon Jenny Salesa): It is not a breach of Standing Orders. No one was taking the call. I will now go ahead with: the question is that the motion be agreed to.

The question is, That the Companies (Levies) Amendment Bill be considered by the Finance and Expenditure Committee.

Motion agreed to.

Bill referred to the Finance and Expenditure Committee.

Instruction to Finance and Expenditure Committee