Business Payment Practices Act Repeal Bill

I move, That the Business Payment Practices Act Repeal Bill be now read a third time.

We’re closing in on the final bit of this piece of legislation. The reason why we’re putting through the repeal bill is that, simply, the proposals that were put forward by the previous Government will not work, will not derive any tangible benefit. This was borne out by the Australian example where this similar arrangement was put in place in 2020, and the independent review of it late last year concluded that, basically, it wasn’t working. Only 1 percent of small businesses were even aware of the scheme, and, in many cases, they weren’t making use of the information. The issue of this is that even if we were to put this process in place in New Zealand, the information is only up to date if made up to date every six months, and companies have four months to then work out what the response is. So, at any point in time, the information is 10 months old. The alternative, of course, was that many, and virtually anyone, can go to an independent credit agency, get the same information, and, in fact, a lot more financial information on payment arrangements and history, and pay a mere fee of $35 per application. That is the principal issue.

We’ve traversed this a lot this morning in the debates. I’ve got to reiterate that this Government is concerned about late payments. There is no issue or argument across the House—it is important that small businesses get access to payments on a timely basis because cash is the lifeblood of small businesses. But, simply, the proposal put forward by the previous Government would not work, did not work in Australia, and so I’ve put forward, on behalf of the coalition Government, a number of initiatives.

First of all, I’m working with the Minister of Finance to ensure that Government agencies meet their payment time of 10 working days, and we will be proactively publishing the results on the Ministry of Business, Innovation and Employment website.

Secondly, we are expected to ask Crown entities to also enter a similar arrangement, but it is appropriate that we go through a period of consultation. It’s expected to take a couple of months, but, assuming that all works to plan, those entities will also be captured. That should be Government entities numbering more than a hundred. And it should be worthwhile just bearing in mind that the Government accounts for about a third of the economy and spends about $50 billion to $55 billion a year on procurement of goods and services.

The other aspect we’re doing is that we really want to encourage e-invoicing. As I said before in question time, e-invoicing offers one of the greatest productivity gains for small businesses. Xero are quoted every year saying that if small businesses were to adopt one new application, such as e-invoicing, then they estimate a benefit to the economy of $8.5 billion. It wouldn’t quite pay off the interest rate that we’re having to pay everywhere because of the huge amount of debt we’ve assumed over the last six years, but it would go some way towards growing the economy. So we want to make sure that Crown agencies and organisations are e-invoicing capable, which means they can receive and send such data. If they do so, then they would be required to pay within a target of five working days.

I think it’s very important to understand what e-invoicing is—some people misinterpret it. That is not working out an invoice for a Government agency and then putting it on an e-mail and sending it to someone; e-invoicing is the direct transfer of data between both entities. It does not involve any invoicing function at all; that is already automatically calculated as part of the e-invoicing arrangement. To further incentivise small businesses, that is why we’re proposing a target of five working days, because that means they get paid even more rapidly from Government agencies.

The third element is that I’m working with Kirk Hope from BusinessNZ. We’re going to work on an industry-led payment code to make sure that large players, large companies in New Zealand, do have good rules around paying small businesses in a timely basis, and there are, obviously, rules and conditions that should go around that.

The last thing is just making people aware—small-business owners, in particular—of the issues of redress options under the Fair Trading Act 1986.

So those are some of the specific things that we will be doing. We can do all of those, virtually without any legislation—I’m not sure we’re going to need any legislation, in fact. But we will be putting those in place as soon as we can because it is very important that our small businesses do have access to the cash when they render goods and services. That is the intent of this bill, because what we don’t want people doing is spending a lot of money on a useless system that will not derive any substantive, discernible benefit for small businesses. That’s why I commend the bill to the House.

Thank you very much, Mr Speaker. I want to draw this House’s attention to a couple of articles that have been published in the last 24 hours. They’re about the UK and they address this very issue. So one is in The Times, and I’ve got one here that I’m going to quote from. They’re, essentially, based on the same issue. The Xero company that the Minister referred to as in support of e-invoices—and he sees this as very much the solution—is the very group that did the research into the problem in the UK of late payment of unimproved debt. It said that in the UK, small businesses face a $1.6 billion deficit. That’s how much it’s costing them—it’s costing them $1.6 billion. That’s because big companies aren’t paying them, and then it means that those small companies are in the credit system and they’re paying higher interest rates. So it’s a very cumulative effect and it’s hurting small businesses.

What Xero said about that—and it was a man called, by the looks of things, Alex von Schirmeister, who’s Xero’s UK managing director: “His call to action is clear—it’s time to hold larger corporations accountable for their payment practices. By ensuring that small[er] suppliers are paid on time, the economic ecosystem can foster a healthier, more sustainable environment for growth. [His] stance is a rallying cry for change, urging stakeholders to reevaluate their payment ethics in … face of this crisis.” That’s what he calls it; he calls it a crisis. He talks about it being a systemic issue where the very fabric of economic reliability and trust is undermined. And so it is hurting our small businesses, and those big businesses are absolutely doing something reprehensible when they withhold payment in this way.

Now, the Minister tells me that the answers to this are some things that aren’t part of this bill; they’re apparently promised to come. One is the encouragement of e-invoices. I have suggested to the Minister that there is no problem with support for encouraging e-invoices, but it sits alongside this bill; it doesn’t sit as a replacement to it. E-invoices are all very well, but, obviously, the person from Xero, who is involved in e-invoicing, knows that and still thinks there is a problem. So we need more than that tool in the tool box. Again, we are burning the things that have been done that are steps to support small businesses, before replacing them with anything comprehensive.

Now, another thing that has been suggested and was suggested in the questions in the House today is: what’s wrong with something that adds to this situation, gives it teeth? Why aren’t we looking at accounting for the profits that are made by big businesses when they withhold payments like this for, often, months on end? Why aren’t they paying the cost? Why are we shoving that on to our small businesses? That’s a shame. That is a shame that we’re doing that. These are the small businesses in New Zealand that make up 97 percent of our workforce—97 percent of our businesses are small and they’re struggling. Our productivity is a problem in New Zealand because those small businesses are undercapitalised. They need this money much more than the big businesses that are withholding, and yet we are taking away that tool.

The Minister’s also told me that his alternative to this is a voluntary code. Well, the secret’s in the name: “a voluntary code”. It’s going to be a voluntary code where people may or may not hold this part of a bargain. I hope that, in my speech today, I have pointed out that what is going on here is not OK. It’s never OK. It’s not a case of volunteering; this is someone else’s hard work. The small business has invoiced the big business, it has done the work, and to suggest that it’s OK for a big business to profit off that and to shove all the costs, have free credit, treat the small businesses as a bank—that is a reprehensible action. That is very much what Government should be doing: they should be getting involved in this.

Now, this is exactly a difference between the Labour Party and the current Government. The Labour Party actually believes in small business. They don’t just pipe it up, wrap it up, see it all as one thing; it is an actual belief in small business. I know that the small businesses in this country are often on the bones—they’re working on the bones of the situation; they are not well-heeled, they do not have enough money for that kind of carry on. I know that because they have walked in my door; as a lawyer, I have seen what has happened to them. I know all about those sole traders. It is of concern to me that we are having a law go through where these kinds of real crises, paid by small businesses, are not at the forefront of the priority of our Minister for small business, or his colleagues in the Government, because there is an underlying ideology and there is an ideological difference.

The belief seems to be that if big businesses do well, if profits boom, even at the price of these small businesses, that’s good for the economy because it will all trickle down. Well, that has never worked. It’s a beautiful dream. It doesn’t work. We have not seen it trickle down. If we look at our productivity stats, we will see that there is a real problem in this country. If I run a small business, when I don’t get paid for three or four months, it’s a pretty big deal. If I’m a sole trader and I am just working for that one entity, which is true of so many people in this country now, it is absolutely back-breaking when that happens. It means that people lose their houses. It means they can’t feed their kids.

This commitment that I have to a dignified work situation isn’t a game. I believe that people in this country should be able to run small businesses and they should be able to make some money in this country, and big business should not be allowed off the hook when, in fact, the work has been done.

The committee heard my friend Reuben Davidson read from a constituent today, and it’s a very good letter from a constituent. It is a letter that talks about the real harm done when someone just refuses to pay. Now, small businesses do that to each other—I appreciate that people do that to each other. But why wouldn’t we have the standard set when we are dealing with our biggest businesses? We are talking the top 3 percent of businesses. We are talking about businesses where they are contracting for services for over $10 million a year. They are businesses worth $33 million per annum. Those are our big businesses. Why wouldn’t we set the standard for those people? Why wouldn’t we expect them to report that information—to collect it, to be mindful of it, and to report it? Why wouldn’t we do that? Is that such a burden?

We hear about red tape. We’ve heard about it today. This is the cover for this stuff: “It’s going to cause red tape.” This doesn’t cause red tape for small businesses; what actually ignoring the situation is is actually ignoring the harm and the red tape caused for small businesses as they seek credit somewhere else, as they try and deal with a situation. I think the woman in the story from Reuben Davidson today had written to the default payer 16 times and had received excuses and hadn’t been paid. That’s red tape. That is our concern.

We need standards in this country and we need to recognise that big businesses are very powerful. They’re more powerful than they’ve been for a long time, for more than one generation. They are more powerful now. Our job in this House is to hold steady and to advocate for the people in this country who are not big businesses. That is the wonderful thing about democracy. We have to hold them to account. Our job as Government is to step in when necessary, not step in lightly. But that isn’t stepping in lightly now, is it? This is something that we should have done. I cannot commend this bill to the House.

I should have said earlier that the question is that the motion be agreed to.

Thank you, Mr Speaker. I was talking with my nephew earlier today, who’s a partner in a small business called SpicyBoys. They make some fantastic chilli sauce in Christchurch, and I recommend that to the other members of the House; it really gets you going. And I would like the members opposite to get going on something that will save small business, on something that will help small business thrive, something that will help our small to medium sized enterprises to function well and continue to be productive and ensure that they get paid on time, because the repeal of this bill does not improve productivity.

The Government has no plan to help small business thrive in challenging economic times. We’ve heard that there’s seven or maybe nine points coming, but, as usual, the Government is ignoring those who are doing it hard now—and those who take risks, those who are the innovators, those who are really trying hard—and it is rewarding the slackers, the big businesses who simply want to screw their customers. I can’t comprehend why you would want to do that. Why, as my colleague Helen White mentioned, you would want to favour the corporates, the very, very wealthy, the big businesses who can afford so easily to do right by their customers. Some of them do, but many of them don’t and that makes it extremely hard for small to medium sized enterprises to function.

So we’ve heard that e-invoicing is going to be one of the solutions. E-invoicing is not an innovation; it’s been around for 20 years. And what’s more, it’s not a solution. Why has it not been implemented? Independent research by Kordia, today, gives us some reasons as to why: more than two-thirds of people using e-invoicing experienced an impact from a cyber incident, with nearly half, 46 percent, finding it took more than a month to resolve the incident, including 9 percent saying it took more than five months. E-invoicing is not a solution. Moreover, 70 percent of business leaders say they would consider paying a ransom to a cyber-criminal. But the Government’s telling us that they could not deal with a business payments programme. I mean, what’s wrong here?

We have heard so many good ideas. We’ve heard a willingness to discuss, to ensure that we can have something better, and all we’ve heard is a tribal retrenchment into an urgent debate over something that is not that consequential but is going to make such a big difference to small business. And this, to me, just seems ridiculous. Why would you want to hold the line on this through urgency, when you could reach across the aisle and start to talk, put it into select committee, let us hear from those small businesses, document at least who you’ve spoken to, and let us engage on this rather than simply being tribal about it? There’s so much more you could do, and yet you seem unwilling.

Isn’t the Government tired of simply rejecting things? Isn’t it time to invest in some solutions? Don’t you get tired of saying no? Don’t you get tired of breaking stuff? It is so hard to make things. It’s so hard, but much more valuable and much more rewarding to create, to bring joy to people, to give security to small businesses and small to medium sized enterprises. You could do this if are willing, if you had the political will.

ASSISTANT SPEAKER (Greg O’Connor): Mr Willis, when you say “you”, you’re addressing the Chair. You probably mean “members across the other side” or terms to that effect.

SCOTT WILLIS: Indeed I do, Mr Speaker, and thank you for that reminder. I’m still getting used to the process in the House and, every so often, I get carried away. However, we do have an opportunity, and I do hope that this is not the end, that there is something better that comes out of the process. But given the quality of the argument that I’ve heard from the Government, I think, as an optimist, I will yet again be disappointed.

I do think that we have heard a lot in a short time, but we haven’t heard a lot of common sense from the opposite side and that is really disappointing. I simply would like the Government to consider what the Government and the party opposite has heard from this side of the House: the willingness to engage, the desire to find a solution for our small to medium sized enterprises, for those people who are doing it hard, those people who are the backbone of business in New Zealand, those people we care about, but clearly you don’t. But we would like you to care—we would like you to care. We would like you to care about business.

Hon Marama Davidson: We would like “them” to care.

SCOTT WILLIS: We would like the members opposite to care. And thank you for the reminder from my colleagues over there; we’re getting used to it. And if they do care, we can work together through a select committee process. We can work together, and we can hear from small business who would love to contribute to something better than this dog’s breakfast of a repeal. Kia ora.

Thank you, Mr Speaker. I’m absolutely honoured to stand here in support of this, and, actually, as a small-business owner, I think we might have a bit of consultation, actually, on this side of the House. Actually, represented across—there are a quite a few members that have owned a small business or worked as a small business.

Now, the reason that this is under urgency—there are a couple of reasons, but the main one is that 3,000-plus businesses would have to upgrade their technology, and then the Ministry of Business, Innovation and Employment would have to spend an enormous amount of money to get the system up and ready to go. So I understand that need for urgency, and we need to move quickly on this.

There are better ways that we can encourage big business to pay than this. I 100 percent acknowledge, as a small-business owner, it’s really hard when you’re not getting paid by the bigger clients, and you need that incoming cash flow, but the previous Government’s bill would not have actually achieved that. We only have to look to Australia to see the results of their inquiry after the 2020 bill that went in there to see that it’s actually not the right way about this.

There are already, actually, protections under the Fair Trading Act, the Construction Contracts Act, and the Contract and Commercial Law Act to protect small businesses. So there actually are some provisions in place already, and I do believe that this Government has some good solutions going forward so that we can actually get some real progress for small businesses. I commend this bill to the House.

I stand on behalf of New Zealand First to commend this bill to the House. We are a party of common sense, and we see that supporting this bill is common sense. As the financial year comes to a close, businesses need some certainty, and these businesses who are now feeling a little bit concerned about the additional compliance costs will now have certainty that that will not happen. Also, we will be saving money with the Ministry of Business, Innovation and Employment, and that is just a fact of what this Government has to do. We have to look at how we can save money. There is no easy way to say that. So that is why I commend this bill to the House.

Thank you, Mr Speaker. I rise for the third reading of this bill. Like I said in the other readings, this Government continues to prioritise corporations, who actually have a different tax rate to many others. These big corporations have a different tax rate; again, benefiting off the backs of small-business owners.

Ignoring small-business owners is at this Government’s peril. They make up a quarter of the country’s GDP. We’ve got 21,000 Māori business owners out there. And I heard the Minister say that he had a dinner with them—I doubt very much that he actually talked to them about this specific bill—and say that he’s got another dinner with them this weekend. By then, it will be too late; it would have passed in the next hour. So, again, the consultation with Māori businesses around this particular issue and the impact that it has on them to be able to pay their staff, to be able to keep the business going—it is going to have huge impact on those small businesses and on the whānau that work in those businesses.

We’ve all been small-business owners ourselves—grew up on a dairy farm. We’ve also been into horticulture, agriculture, and also consultancy. If I don’t have the ability to be able to pay my bills on time, that could mean huge impacts on the particular company that I have. I understand this intimately. So this bill, once again, diminishes the mana of small-business owners, who play a huge part in this country’s GDP.

Whānau who own businesses, and whānau who employ people in those businesses have now got to tell them that there is no security that the people they’re providing services and goods to are going to be paying on time. There’s no security for that. This is the impact. And this is not about having e-invoices, because e-invoices have been around for a long time. A lot of people already have e-invoices. I was doing e-invoices before I came to Parliament. This is not about e-invoices; this is about tying up the ability for small businesses and taking the power away from them to ensure that they can pay their employees and the bills on time.

I can’t see how this House and this Government can support this type of bill, because it makes absolutely no sense to me. And then to insult small-business owners to say that they cannot navigate their way through the current system I think is an insult to those small-business owners. You wouldn’t have a small business if you couldn’t run a small business, if you didn’t know how to navigate those particular processes to ensure that you had your bills paid on time.

Let’s just take the supermarkets, for example, and the duopoly. Those farmers—and I know; I’ve been a provider of those. I come from a farm. If we cannot get our bills paid on time when we provide—whether it’s avocados, whether it’s sweet corn, whether it’s watermelons, whether it’s courgettes, whether it’s beans, whether it’s maize, any of those things. If I can’t ensure that the goods and services I provide to those big companies, those companies that have a hold on the duopoly here in Aotearoa, especially the supermarkets who made over $400 million in one year, there’s an issue there—there’s an issue there. They get a four-month reprieve from paying that particular bill. For many small-business owners, that is unaffordable. We cannot afford that and it would mean many of those small businesses will fold—they will fold.

You imagine if the dairy farmers—I grew up on a dairy farm, so I know this intimately—weren’t paid over a four-month period by Fonterra. That would mean huge impacts. It would have huge impacts on their particular farm and especially small dairy platforms like we have on the coast. These are the issues that our people are facing. These are the issues that I put to the Minister during the committee of the whole House stage to answer: who are the Māori organisations, the small-business owners, you have consulted?

And there’s been no alignment to ensure that the Te Tiriti o Waitangi principles have been upheld here—because te Iwi Māori haven’t been consulted on this particular issue—to ensure that if we’re going to enter into contributing to a quarter of this country’s GDP, what is the security for starting that up. What we’re going to do is put other small-business owners or even those who have the initiative, the innovation, the creativity to create those—I look at them all online, our people selling kākahu, our people selling art, our people selling taonga and things like that. It’s going to have huge issues, and we will not be supporting this bill to the House. Kia ora tātou.

Thank you, Mr Speaker. I have to say this is just absolutely classic from a National - ACT - New Zealand First right-wing Government. This is a classic playbook. They go out and position themselves as the champions of small business, but when they get into power, we see whose interests they really represent. What is happening under urgency right now is that the Government is repealing a bit of legislation that was correcting the power imbalance between large corporates and small business. It wasn’t even really penalising those large corporates; it was just asking them to be transparent and allowing them to be accountable for late payments, which is seriously affecting many small-business owners. Of course, in the case of those small businesses, late payments have a much more consequential impact on their functioning, because they’re running on the smell of an oily rag, usually, right? They are working as hard as they can to deliver goods and services to the people of New Zealand. The fact that this is being repealed under urgency shows that the Government is more interested in protecting the power of big corporates.

Now, I understand there’s a huge conflation on that side of the House between what is genuine economic productivity, what genuinely is good for people and planet, and what makes a lot of money for a small group of people. Those two things are different. Generating genuinely productive goods and services, circulating money through the economy—like, you know, you can see that is different than extracting profit and becoming rich. So, like, those are two different things, actually generating the value and then skimming off the surplus.

That’s why, like, in the 20th century, there was always a real big focus on maintaining a check on the growth of corporate power, the growth of monopolies, duopolies, and oligopolies, because those are actually not good for the economy. It’s not good for the people of our country. What it is good for is the small group of people who are invested in those big corporates or the people who are on the really exorbitant salaries of those large corporates. So when organisations get really, really large and profitable, they have more power than other people in the economy and they tend to grow more and more and more, and that is actually not good for the economy. If you actually study the economics, people on the other side of the House, and not just, like, Econ 101 in the 1990s or, you know, as part of their commerce degree or their MBA, they might understand what actually makes an economy work, and it’s not letting huge amounts of money get hoarded by small groups of people or organisations.

So that is the interest represented by this Government, and, under urgency, they’re getting rid of a perfectly reasonable tool that actually would’ve helped. I have to say, this is really important, because in the Cabinet paper they say, “Oh, small businesses don’t really need this because they can obtain information on which companies have payments in arrears through a credit agency.” Oh, a private, for-profit credit agency such as Centrix, which charges $35 to provide this information—$35. Well, it so happens that one of my colleagues has been—in fact, several of them have been small-business owners, and they’re able to let us know that if you go get a Centrix report, it doesn’t actually cost $35; it costs $49 plus GST per company. So the Government and the people providing the advice are out of touch, and while they say they’re reducing cost and red tape, what they’re really doing is shifting the burden of it on to small businesses who don’t have the power to go chase up their late payments from the big corporates.

So, very, very transparent, through their actions, who National, ACT, New Zealand First represent: it is the 1 percent, who keep getting richer through making the economy fundamentally imbalanced and not functioning. Like, the purpose of an economy is simply to facilitate people to trade goods and services and get what they need to have a good life and live a good life. What is happening right now is the extremely rich people and large corporates are extracting profit out of the economy while ordinary people, hard-working people, are seeing their cost of living rise, and, at the same time, we’re seeing the planet face an existential crisis. This bill will not be supported by the Green Party.

Well, can I bring us back to reality. We heard from the excellent Minister—clearly the others weren’t listening—that he is going to address all of these issues through regulation. I thought it was going to be in the “Bayly Bill”, but it’s not; it’s going to be via regulation. And what’s more, it’ll be a much more efficient and cost-effective way. He is actually doing this to save businesses who had ahead of them, if this Act wasn’t repealed, quite a significant cost to upgrade their own systems to meet the requirements of that Act, and also $2 million to $3 million at least of cost to the Ministry of Business, Innovation and Employment to develop and put in place a computer system to actually deal with it. So we’re about making things easier for business—small business, in particular. This repeal bill is the start of that and I commend it, with great pride, to the House.

One of the lasting images of this debate for me is the image of Minister Andrew Bayly sitting down to dinner with a bunch of small-business owners a couple of weeks ago. I would love to have been a fly on the wall and heard the dinner-table conversation, which I think would have gone something like this: “Here, have some more dessert, because I’m just about to completely shaft you by repealing the law that gives you a break and prevents and discourages big business from late paying and having interest-free loans at your expense.” I’d really love to have heard that, and I hope that Andrew Bayly paid for that dinner, because he’s really making small businesses pay with this legislation.

The Minister claimed in his third reading speech—and, actually, throughout the bill’s progress through the House—that we all agree: we all agree on the problem, we all agree that something should be done about it; it’s just that we have a different way of going about it. But he’s asking for a very big leap of faith. He’s repealing a mechanism that was put in place that requires transparency and public disclosure from large firms in order to make it clear and transparent to the public and to small businesses their record on payment times. He’s true in that I think we all agree, at least in principle, on the problem definition, but the trouble is that this Minister and this Government are pretending to be concerned about this. They are gaslighting the New Zealand public and the small-business sector: half a million small and medium sized enterprises around this country, who employ vast numbers of New Zealanders and generate a very large share of this country’s wealth.

The Minister has itemised for us what he is intending to do about this problem in lieu of having this legislation on the books. He’s going to be having Cabinet require that Government agencies must pay their bills within 10 working days—OK. He’s going to be consulting with Crown entities about them doing the same thing.

He’s going to encourage e-invoicing, something that—I don’t know—a dozen times in this debate, members of this House have pointed out is already happening. E-invoicing is not a new thing, it’s not an innovation, and it actually doesn’t address the problem that the legislation that’s being repealed today was designed to fix. It’s a red herring. It’s a distraction. It’s irrelevant to this debate, which is about: how do we fix the problem of large companies taking advantage, abusing their market position, not paying on time, and getting free money at the expense of small businesses?

The Minister has offered up a voluntary code of conduct. Why would he think that large companies with a significant financial benefit from not paying their bills on time would voluntarily change their practice when there’s no transparency? There’s no public disclosure. Well, why would they change? Because it feels good? Because the Government is asking them to, through having a voluntary code of conduct? It’s completely implausible. It lacks credibility.

Then, the fifth thing that the Minister offered up was making small-business owners aware of the redress that they have under the Fair Trading Act and other legislation. Well, the case has been made very persuasively through this debate that that is not a real solution—that is, the remedies are not clear, they’re not accessible, it takes time, and it takes money. It’s simply not a realistic option for small businesses.

So this agenda—so-called agenda—has been cobbled together by the Minister as a kind of fig leaf for what he is doing here, which is repealing a mechanism that was put in place. It may not be perfect, but at least it offered a genuine prospect of changing the behaviour of large companies, who are the culprits here. We know that they are rorting the system and ripping off small businesses by not paying on time. The Minister is repealing that, he’s getting rid of it, and he’s not putting anything credible in its place.

We’ve had to listen to hours of infantile rhetoric from the Government benches about red tape as if all regulation was somehow bad, when the law that is being repealed here would have imposed an obligation for public disclosure on New Zealand’s largest companies, and, no doubt, there would have been some cost associated with that. But it offered the benefit for small businesses that they would be able to know who of their suppliers had a decent record of paying their bills on time. So, as Julie Anne Genter rightly pointed out, the Government is simply shifting the burden and shifting the cost from big business to small business. This is the party that styles itself as the party of small business and as the great champions of free enterprise. National’s lack of interest in actually doing anything that would create a more competitive market gives the lie to their claim to be the party of small business.

One of the things that actually distinguishes or characterises the New Zealand economy is its tendency towards the concentration of market power. We’re a small economy, and, in almost every industry in every sector, there is a tendency for the concentration of market power in two, three, or four different companies, and you see it everywhere you look. One of the achievements of the last Labour Government was its giving teeth to the Commerce Commission to allow it to do market studies where it could, basically, require companies to open their books. It gave to the Commerce Commission the legal power to do in-depth studies to get the facts, and then to set out what a pro-competition reform agenda would look like. We’ve seen that in the building supplies industry, we’ve seen it in the fuel industry, and we’ve seen it in relation to the supermarket duopoly, and those reports, indeed, laid out a pro-competition reform agenda that our Government went some way towards implementing. But what we’ve seen today from the Government, with the repeal of this legislation, doesn’t give me any optimism that the Government has the political will to actually make changes and make reforms to make our economy more competitive.

There are two reasons why you would want to have the kind of legislation that’s being repealed today. One of them is just basic fairness. Half a million New Zealand small businesses experience insecurity and precariousness because they are completely dependent on their customers paying their bills on time to ensure that they have decent cash flow. We know how hard small businesses work; the risks they take, often investing the family the home, to get businesses started; and the long days and long nights trying to get businesses off the ground. They work incredibly hard, and they deserve a Government that will go in to bat for them. It’s a basic question of fairness.

The second reason is what’s good for the whole economy and what’s good for this country. We need good competition policy. We need competitive markets that make our firms more successful, tougher, more innovative, and more fleet of foot, but we also need competitive markets that allow small firms to grow into medium-sized firms and into large firms. The larger firms generally have higher levels of productivity. They’re able to invest more in technology and they’re able to specialise, and if we don’t make it easier for that upward mobility of small firms, then we are dragging down the New Zealand economy and making it less productive, and making us less wealthy as a country. This seems to have completely escaped this Government.

This issue, I would have thought, was an opportunity for the current Government to demonstrate its commitment to small business and to competitive markets and productivity. Instead, they have sided with big firms with vested interests against the interests of hard-working small-business owners. At the very least, they would have had the courage to send this bill to select committee and invite small-business owners to come along and have a say and express their view on this issue. But, instead, we get a mixture of reckons and political ideology.

Well, I’d just like to support the third reading of this bill, and I’d like to just pick up on a word that a member on the other side of the House used—optimism—because optimism is what we are going to be pumping back into our economy and into small business, because we believe in less regulation, less red tape, and less compliance. I think, in this debate today, we’ve all noted that we all want businesses to pay on time, but we don’t achieve it through more regulation and more red tape. There’s no point creating rules for the sake of creating rules. It’s about making it easier for business to do business so we can create more jobs and opportunity and get this economy back on track. So I commend this bill to the House.

This is a split call. Five minutes—Reuben Davidson.

Thank you, Mr Speaker. I’d like to start with a couple of statements. The first is that this Act addresses a real problem, and the second is a little bit longer. When large organisations take a long time to pay their bills, small businesses with limited working capital are the ones who suffer. Sometimes it is because large players unfairly use their market power. And I’m expecting a breeze to drift across the House from all the nodding heads from the other side, because those words come from the Minister’s own document and paper with the rationale and the reasons for what this bill, now being repealed, addresses.

Now, I think it’s also good for us to get a little bit of context here, because we had two debates about this earlier today, and we’ve all gone out and had some lunch and left the House and had some question time, and it would be good to bring the focus back to who this bill serves, and that’s small businesses. Small businesses are about real people. I’m going to share, as I did earlier, some notes from a local business in my electorate of Christchurch East, because what we don’t want to do is lose sight of the people who are affected by repeals like this. So the first passage I’m going to share is from Sachiko from Kai Connoisseurs, and she says, “Running a business is hard. Being an employer is hard. Paying for kai, staff, rent, and the rest is hard; and spending my time asking to be paid, over and over for mahi we’ve already done well that’s hard.” Her Facebook post is a letter to organisations and corporates using small, local business to provide services that support your kaupapa then forget to support them back. The message is really simple: “Please prioritise paying your bills.” And it’s signed by “A tired, hard working solo Māmā, business owner, employer and hoha human who’s had about enough of asking politely for what we are owed.” And this a polite debate about what we all owe to small business.

Now, I think it’s also worth making a distinction here, because the dynamic in a business relationship is a different power dynamic to the one in a political relationship. In a political relationship, sometimes the smaller parties in the relationship can have a lot of sway over the terms of the negotiation and over the things that are included in the transaction. Sometimes, the smaller parties can have unreasonable bottom lines that the larger party bows to. That doesn’t happen in business. Small business can’t make claims for all sorts of strange, unusual, unexplainable, unreasonable demands and have them included into the business arrangement or a business relationship. That is a power dynamic that I would suggest is exclusive to recent politics.

So what I thought I would also do is close with some language that members on the other side will probably find very familiar. So I’ll speak to you in your language. What I’m saying really clearly is—I think that’s a phrase you’re quite accustomed to—we need to aerate the issues; we need to zoom out. This repeal does what I’m doing to you to small business—it condescends. This is a condescending repeal. I hear the Minister’s priorities—seven of them—to support small business. My challenge is: do eight. Walk and chew gum. It can be done. Small businesses do all they can. The least they deserve is for us to do the same for them. I cannot commend repealing this bill.

I’d like to address the member on the Opposition Reuben Davidson that we speak one language in this country, which is for the betterment of New Zealand. So if I can bring everyone in this House back to the intention of this bill, which is to improve payment times, ramping up the use of e-invoicing; incentivising small and medium enterprises to adopt e-invoicing; expanding payment targets to Crown entities—all of these will contribute to business efficiency. So faster payment between and across businesses in New Zealand is the intention that we have for this bill, and with great intention, it comes with great delivery, and the speed of delivery for this National-led Government. So with this, I commend this bill to the House.

ASSISTANT SPEAKER (Greg O’Connor): Now, I understand this is a split call between two Labour members. Ingrid Leary—five minutes.

Thank you. I’d like to start my contribution by just acknowledging the small businesses that are out there, the 97 percent of businesses in New Zealand operated mainly by families, by small groups of people who are doing the hard yards for our economy—and many of them come from migrant families—I really want to acknowledge them. I also want to acknowledge those in my electorate, people like the hot yoga studio run by the fabulous Donna. People like Abdal’s Gourmet Foods, an amazing small business that is growing and was started by a former Syrian refugee who is really making a difference in our community, both in terms of the business he provides but also just the rich and interesting new palate that he is bringing to the electorate. And many of those small businesses, of course, took the wage subsidy which helped keep them afloat, because, as I’ve maintained through this debate, cash and cash flow is king for small business. I know that as a small-business owner; I know what it was like to have sleepless nights thinking how am I going to pay people when some of my suppliers were late in their payments, and that’s what this is all about.

But, having listened to the debate, I cannot help but think that the Act, the current system is being repealed as a vanity project by the new Minister. The reason for that is there is no need for the repeal and there has been no use of process and, by the looks of it, not much process going forward. So although the Minister was generous in the committee of the whole House stage with his contributions, my sense is that he is a Minister who’s very hands on, he thinks he knows better than the officials, he thinks he knows better than the public consultation. He’s got some good ideas, it’s great that he realises that e-invoicing is around—something that has been around for 20 years. But there’s been very little process, and unsatisfactory answers to the questions that we put to him in the committee stage about that.

The Minister could have just left the current system intact. He has tried to say that there’s no point in doing that because the Australians don’t like their system. But the very report that he quoted from, he cherry-picked out the things that he wanted to say and left out the most important point, which is that the report recommended that Australia maintain its payment practice system and hinge it more firmly around reputational risk. And it had a number of ways that it said that could be done. That was through making the register more accessible for small-business owners, streamlining the data, and improving the power of the regulator, which I would be surprised if the Minister, knowing how he loves competition law, would have had an issue with.

Instead, though, what we have is this repeal bill that has a really patronising general policy statement that assumes that small-business owners do not know how to access data, that they do not know how to interpret the data, and that even if they did, “Oh well, they’re not going to have much choice anyway because they’re only small-business owners. They don’t really have a way to strategise, to choose their own suppliers in the market.” Now, I do not know where that general policy statement came from. We asked questions in the committee stage about the underlying assumptions and the advice from officials. There was no regard to that and certainly it hasn’t come from any select committee process, because I would remind this House that, once again, we are doing this under urgency.

So that takes me to my second point: just the lack of process around this; the use of urgency, the lack of a select committee process, and then what appears to be quite a lack of process going forward, if I’m hearing the Minister correctly, because he’s talking about a voluntary code that has suddenly come out of the middle of nowhere, suddenly big business wants to introduce this, even though bad payment practices have been going on for decades. He wants us to believe that this code is going to work for small business. Well, where is the process? I asked these questions in the committee stage. I asked where the consultation would be. I asked what the sanctions would be and how this would be linked to reputational risk, because, as was pointed out by one of the previous speakers, if there’s no link to reputational risk then the system simply won’t work. He did not answer any of those questions. Instead, he insisted on talking about his e-invoicing and the fact that the Fair Trading Act could be used. Now, he also said that it would be difficult for small business to access information under the current system that the Labour Government introduced. Well, he can’t have it both ways; either we know how to use data, or we don’t. This is a terrible repeal bill and I do not commend it.

Mr Speaker, thank you very much, and I acknowledge my colleague who’s provided me with some time. Like every member of Parliament here, we represent an economy based on half a million small businesses. This is an important piece of legislation and I’ve been asking myself: why are we doing this? Because last year, once again, since 2003, the World Bank has been conducting a survey across 190 economies: which country is the easiest to do business in? New Zealand. Consistent. I have been proud to say that around the world, as I’ve promoted our country to exporters, to importers, to investors. We are the easiest country in the world in which to do business, and that is something we should be proud of. After the Labour Government—last year, this judgment, and once again.

So all the rhetoric, all the ranting we hear over there about the Labour Government imposing costs and difficulties on small businesses, it’s simply not true. We are the easiest country in the world. The reality is there are greater expectations, in part because of lawyers, because of international trade, because of food safety, because of a whole lot of other expectations from discerning customers around the world. There are more requests.

This is the easiest country in the world in which to run a business. But over that side of the House, you’ve got some naive people—very, very naive. They, on the one hand, say, “Oh, the market will determine how things roll through.” Well, listen to market signals. Well, the reality is that an emerging and evolving market ends up with some dominant players. It might be in road contracting, it could be in dairy industry or meat industry, it could be in areas of health, it could be in banking. In fact, you know, four big players. There have been many people who’ve come to the House. If they’d had the chance to come to the select committee and say, “It’s pretty unfair. We’re a small business and we get beaten up by the big business”—because that’s human nature and that’s normal commercial evolution.

If you’re a small business, you want to be a big business and you do your best. In fact, there’s a good member over the other side of the House—he’s a new member: David MacLeod—who was part of an organisation that actually moved forward in exactly the normal way of commercial evolution. If you’re big, you exert your dominance. Fonterra said, “We’re going to pay 90 days, not 30 days. We’re going to pay in 90 days.” Outrageous—outrageous. Why did they do it? Because they could. To be fair to him—and I think he is a good member and I know he looks very uncomfortable with the passage of some of the Government’s legislation and changes, so I know he’s a good member. I’m not sure whether he’s on the board—I think he was. Fonterra did a U-turn. They realised that in spite of their ability to pay in 90 days, they said there was backlash, there was outrage, and, in fact, they changed it—and good on them and I acknowledge that.

But there are other big, dominant players across this economy that won’t do a U-turn, because they don’t have to. Fonterra’s a cooperative and they had many farmer members who had friends who were small-business people and they said, “This is unfair. You pay the farmers on the 20th of the month, but you don’t pay us until the 20th of the third month.” So we brought in legislation to ensure that small businesses had a fair go, and this coalition Government—ACT, National, and New Zealand First—is removing the protection for half a million small businesses across this country. Not all of them will be affected because they may have a good relationship with a supplier or customer or whatever, but there will be some who will be unfairly affected.

We are in this Parliament to protect those who can’t stand up for themselves. The Minister says, “Oh, you know, you can go for the fair trade Act. There’s other pieces of legislation.” A small business at a time of global inflation, when the economy’s being squeezed by the Reserve Bank, doesn’t have the spare cash to get the data and to go to court.

So this is a ridiculous piece of legislation being passed through urgency that will undermine the rights of half a million small businesses across our economy. It is outrageous, and how any one of those members over there can stand up and say that they are here for enterprise, when, under a Labour Government, this economy was the best for doing business across the globe—across the globe; across the globe—by the World Bank standings. This will reverse that position.

Mr Speaker, thank you very much. I thank the member the Hon Damien O’Connor for bringing up a part of my career, as a director of Fonterra. Indeed, he is correct that that organisation did bring in what I consider were some very challenging times for suppliers to that entity. You know, I may enlighten people—without trying to sort of explain my whole CV—I was one of the contractors myself, with an electrical contracting business, that was in that spot. I, as a director of Fonterra, was part of the drive to get the change that we saw to correct that behaviour, which stopped the hurt of so many different entities that were serving that very, very big company which is called Fonterra. My point being that there are many businesses that are hurt by the fact that their working capital is stressed, by the fact that other entities use them as banks.

I’d like to say that there are—was it 3,500 entities that were identified as part of this particular Act that’s being repealed, the Business Payment Practices Act? But it’s actually more than those 3,500 entities as well, there are other businesses that actually cause a huge amount of stress on other companies as well. So this wasn’t the silver bullet to solve the whole problem. But the fact is that the problem is agreed upon. Every member of the House—I haven’t heard anybody talk cross-purposes of what the issue is; we agree with what the issue is. Dare I say it, we’ve just got a different method of actually delivering a solution for this, on this side of the House. So, with that, I commend the bill to the House.