Bennett David: Insolvency Law Reform Bill — In Committee 
Bennett David: Insolvency Law Reform Bill — In Committee 
[Volume:634;Page:6058] 
DAVID BENNETT (National—Hamilton East) 
: 
 As we have heard in a number of great speeches from the National side the voluntary administration regime has not exactly been a real problem. It is just part of the implications of it that we find quite difficult to contest. I think Nicky Wagner summed it up very well when she said it was good enough for creditors but not good enough for the Inland Revenue Department. That makes us think: “Well why is there a different rule for the IRD?”. The reason must be that this Government feels that the Government is in a higher position than the ordinary New Zealander. The Government sees that it has a greater role than New Zealanders do on the street. It has always been a historical fact that Governments can tax and they can willingly impose taxes and people have to pay them. We cannot get out of paying our taxes and Governments have the ability to implicate people and make them pay a tax. 
It does the same with local government. It pushes services on to local government which then in turn has to rate ordinary New Zealanders to pay for those services. We do not have a choice in our taxation system. We have to pay the taxes that are imposed upon us. That is something that has occurred throughout history and it is why we have Governments. It is how Governments are funded. But then why does the Government also want to have priority on the other side of the ledger? It is not good enough for the Government just to have the ability to tax; it is also good enough for the Government to have the ability to take money on the other side through the Inland Revenue Department and preferential claims when a business may go under. Why cannot the Government sit there like any other business or creditor when it has the ability to tax over and above an ordinary creditor? 
This is something I think this Government needs to look at very closely in its legislation. I look at the reasons why this was put forward in the office of the Minister of Commerce. It said it was “to ensure that the current business rehabilitation regime will enhance business confidence.” Well it will not enhance business confidence if we are giving a priority to the Government over ordinary creditors. 
Another big thing this legislation was supposed to do was to ensure that overseas investors were not deterred from investing in New Zealand. Well they will certainly be deterred if they know that the Government has a higher priority than their creditor ranking would have. It also said that it is “to ensure that New Zealand adopts an international best practice for business rehabilitation.” Certainly there are aspects of the voluntary administration regime that we do favour. But that regime needs to be one that is consistent with overseas practice and this is not. 
The press release from the Minister says that “the voluntary procedure will bring New Zealand into line with other OECD countries.” It would be great if we could do that with a few other things like employment law and have a probationary period. But it said that it “has been adopted from the Australian voluntary administration regime which has had the advantage of benefiting business rehabilitation involving trans-Tasman organisations.” That is all very good rhetoric but will it be followed up? The reality is that this legislation is different from Australia’s. How can the Minister say in her press release that we are doing what Australia and the other OECD countries want and do when we are doing the opposite? 
For example Australia abolished the priority status of the Australian tax office in the early 1990s while the UK followed suit in 2002. This is not consistent with the Minister’s press releases. The Minister says we will be following OECD best practice in doing what we are doing. The reality is we are not following OECD best practice; we are just feathering the caps of a Government that wants to have the ability not only to tax but also to have priority status when a business goes under. Why would the Government want to do that when it has an $11.5 billion surplus? How much money do Government members actually need to be sitting on to make them happy? How many big buildings in Wellington do they need? How many statues to their Government do they need to erect to be happy? They need to keep on going because they need to build up their war chests for an election campaign to buy off New Zealanders. 
That is the reality of why they want to have preferential status. They are not looking after New Zealand business people; they just want to build up the money so they can go out there and bribe at the next election. Or maybe they want the money to pay off a few debts they have carried over from this election by way of a few payments to certain organisations that will in turn repay them through financial assistance. It is all part of this Government knowing what is best for ordinary New Zealanders. It believes that it knows what to do.