Cosgrove Clayton: Financial Reporting Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Financial Reporting Bill — In Committee[Sitting date: 19 November 2013. Volume:695;Page:14984. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): Mr Chair it is a pleasure to give a speech in the Chamber when you such a venerable individual with such great experience are in the Chair. This is one of those rare moments in this Parliament colleagues where both sides agree on a pretty substantial bill—one that is designed on the one hand to create a high degree of transparency for business where it is needed and where it is in the public interest and on the other hand to not be so burdensome and onerous especially for those smaller enterprises depending on their agreement in terms of compliance costs. I refer to Part 1 of the bill the Financial Reporting Bill in terms of clause 3 “Purpose” where it talks about the various financial reporting standardsauditing standards and assurance standards. We agree with and will be supporting this bill. It is appropriate. The aims are trying to streamline reporting procedures cut compliance costs and bring together a whole series of principles that will aid business but also aid those who are attempting to get information from business.Could I touch just for a moment given the nature of the purpose clause on where it talks repeatedly about standards and where it talks about in this part transparency. We agree that this is a good bill—the Labour Party has contributed admirably to this bill—but we question a couple of things. We agree and we know the Government has acted in good faith in terms of its promotion of standards and transparency within this piece of legislation but I have got to say that it is in stark contrast to a number of other issues around a lack of transparency or standards that this Government has been involved in whether it be the financial deals around Rio Tinto where $30 million was given away to a multibillion-dollar multinational company allegedly to protect jobs—a botched negotiation where no security was asked for or guarantees sought to protect those jobs. We found out of course that the Minister in charge of those negotiations the Hon Bill English Minister of Finance did not have the intelligence to even ask for a guarantee around those jobs—low standards low transparency.In fact there was very little transparency around that deal as the Government firstly left it to the Meridian Energy board and then leapt over the top of the Meridian Energy board without actually telling the board that it was doing a side deal and gave away not only the kitchen sink but the kitchen as well and $30 million was thrown in for zero gain. So when it comes to issues of standards and transparency we are glad that these principles are right up front in this piece of legislation but I would hope that the Minister of Commerce might have a word with his colleagues in other portfolios to bring the same level of standards and transparency to other parts of this Government.If we look at other transactions like Solid Energy the Government was completely asleep at the wheel. There was no transparency around the fact that that company was driven into the ground by this Government because this Government will have no transparency no ministerial inquiry and no select committee inquiry. They were all blocked. The last port of call—thank goodness we live in hope—is the Auditor-General who is still looking at the need for an inquiry. But again there is no transparency and no standard of behaviour around that particular transaction.We look at the Chorus transaction. Again it was done behind closed doors botched completely—a very low standard there—and absolutely stuffed up to the point where the Government rather than—Maggie Barry: Your area of expertise botching and stuffing up. You’re an expert.Hon CLAYTON COSGROVE: That was for the uninitiated the “Venus fly-trap of the New Zealand Parliament” one Maggie Barry who every time she sort of—Maggie Barry: What are you?Hon CLAYTON COSGROVE: That interjection may well have been sponsored by Jim Beam and Johnnie Walker; I do not know. It is late at night.Maggie Barry: Are you a heavy drinker Clayton?Hon CLAYTON COSGROVE: She may be too close to the fertiliser the nitrogen or the compost—who knows? Gardening leave is appropriate. Actually gardening leave is appropriate as we talk about the lack of transparency around Solid Energy because we know that the chief executive officer has seen a lot of gardening leave for a long time on about $300k or $400k which is something I suggest that member on her salary of—what is an MP’s salary $150k-odd—has actually been on. She has actually been on gardening leave since she has been elected to this place.But anyway getting back to the bill because it is appropriate as the budgie chirps away in the background over there—that was a botched negotiation. We moved toChorus of course. There was no transparency or high accounting standards around that deal—none at all zero. There was no transparency around that deal to the point where the Government is in such a bind that even though it is the bastion of the private sector it will not actually look at enforcing the contract as you would in a private sector situation. Last time I checked where you negotiated better than the other bloke and you won the deal and the other bloke or the other person or the other party could not come up with the goods you enforced the contract. You did not wave the white flag of surrender and say you would bail them out or nationalise them or take an equity escape or interfere with the regulatory process in respect of the Commerce Commission. But oh no these guys do anything—these guys do anything.We would like some transparency. We would like some transparency even from old “Venus” at the back. We would like some transparency around those sorts of transactions as well. That is what we would like some transparency and standards on because the difficulty with this legislation even though it is good legislation is that this Parliament can be seen by those in the commercial sector to pontificate to them about the standards they should adhere to and the levels of transparency they should adhere to. But the Government does not practise what it preaches in other areas.Maggie Barry: Go on sit down. Spare us all idiot.Hon CLAYTON COSGROVE: I think you might have to get the Xanax for that member. She may need a wee bit of help. I say this—Maggie Barry: Bring out the Roundup—spread it on your hair.Hon CLAYTON COSGROVE: Keep going it is great. It shows that member for the inept member she is. Even this late at night people will be picking up on that. So this is a good piece of legislation. It actually deals with cutting down many of the compliance costs—Maggie Barry: Down to stump size like yourself.Hon CLAYTON COSGROVE: Sorry?Maggie Barry: Down to stump size like yourself.Hon CLAYTON COSGROVE: Well that is a brilliant interjection. That is an intellectual effort from somebody who has been too close I think to a variety of garden substances—The CHAIRPERSON (H V Ross Robertson): Order!Hon CLAYTON COSGROVE: —over the years. It is all right I do not need protection from her. Good God help me if I did.The interesting thing I want to touch on is in respect of charities. The Commerce Committee spent quite a bit of time looking at the level of compliance that charitable organisations would have to go to. To be fair to both sides we looked at this with a great deal of seriousness because although we wanted a generic set of standards and standards to apply to financial information in accordance with generally accepted accounting practice and currently there are no requirements for the content of this financial information we were—and I know the Minister appreciates this—very careful to look that we were not burdening or requiring an onerous set of arrangements in respect of charities given the nature of the work they do. They are not businesses. They raise money for good causes. Members of Parliament on all sides are involved in many of those charities and we did not want money going in an onerous way from the public good if you like into a myriad of bureaucratic and administrative compliance costs.I think it does strike the right balance. I think we had very good feedback from the submitters in the charitable sector but it is an area that I think many of us on both sides were concerned about. Public money private money and charitable money of course are three different pots there and there is a requirement—a high requirement—on each of those areas in our community to have appropriate financial records and appropriatestandards. My hope is that these financial standards will embolden people to increase their donations to the charitable sector knowing of course that there is belt and braces—Hon Shane Jones: Donations?Hon CLAYTON COSGROVE: —donations indeed—and appropriate financial standards and transparency around the charitable sector as there generally is even prior to this bill. That gives people the confidence to give hopefully in a greater way and to support those entities in a greater way. I would be interested whether the Minister is prepared to make a couple of comments of reassurance perhaps around that charitable sector to get on the record what exactly we are striving for and to give some confidence to that sector.There is very little if any politics in this bill because it does have bipartisan support. I look forward to the Committee stage as we work our way through this legislation—the purpose clauses and the other clauses. I know my colleague Dr Clark will have some interesting comments to make in respect of the Inland Revenue Department and its role in this. I look forward to some of the very interesting comments of members opposite. I am sure they will make a wonderful contribution as they have in the pre-emptive stages of this piece of legislation rather than making the odd inane comment as a few vapours whizz through past the back row over that side. I am sure it is a long night tonight but I think we should give this bill due consideration and we should act in an appropriate way to support this legislation given that it amends around 80 Acts. I look forward to this debate continuing.