Curran Clare: Accounting Infrastructure Reform Bill — First ReadingText is incorporated into the Bound VolumeCurran Clare: Accounting Infrastructure Reform Bill — First Reading[Sitting date: 28 January 2014. Volume:696;Page:15595. Text is incorporated into the Bound Volume.]CLARE CURRAN (Labour—Dunedin South): Happy New Year to you Mr Assistant Speaker Tisch and happy New Year to all my colleagues on the Commerce Committee looking forward to another year of robust discussion and debate on legislation coming before us. I think it is important to say that despite the robustness of the debate that happens in this House in select committees the work of devising new and important laws that upgrade existing laws goes on.This bill the Accounting Infrastructure Reform Bill appears to be one of those pieces of legislation that as my colleague across the House Jonathan Young has noted fits within a suite of particular legislation that is looking at financial reform. It also fits within the legislation around harmonisation of law particularly between New Zealand and Australia. Certainly in principle those things are important. The upgrading of law in this area the importance of trying to raise awareness of financial literacy out there in the community how these sorts of laws operate and ensuring that our laws make sense between us and our closest neighbour Australia—all of those things are important. We certainly do support the referral of this piece of legislation to the Commerce Committee and in principle we support its intent.I do have on looking closer at this bill some questions in my mind that I am keen to see played out during the discussion in the select committee. I want to just touch on a couple of those tonight. We know that there is certainly broad agreement between New Zealand and Australia and to get to the guts of this legislation it is enabling that harmonisation to take place. That seems to me to be one of the core things that underpins it. It is one of the core reasons for it. I suspect that it is something that will hasten the bill’s process through the second reading and further readings in this House because it seems that there is quite a lot of support for that.However it is not universal support. There were some important issues raised in the discussion that preceded and happened during the merger discussions between the Institute of Chartered Accountants of New Zealand and its Australian counterpart that I think are worthy of some further scrutiny in the select committee. I am sure that we will be hearing the voices of New Zealand’s smaller accountancy firms in particular and what I personally would particularly like to hear are the voices of smaller firms and also firms in rural and regional New Zealand so that we can actually hear what their views are on the impact of a merger between the New Zealand and Australian chartered accountancy groups. Although big firms and urban firms may see direct benefits those benefits do not always naturally accrue throughout the whole of New Zealand and I have got a little warning bell in the back of my mind. We must be certain if we are looking at any potential changes to this bill that there is no disadvantage happening in rural and regional New Zealand.There are three concerns that I have seen being raised around such a murder—merger. That was a Freudian slip which may come back to haunt me. However the perception was that this could be seen as a potential takeover of the Institute of Chartered Accountants of New Zealand by the Australians. Personally I do not think that is the case. It seems to me that there has been a fairly robust discussion between the two organisations. I have read a number of things that have been written by the Chief Executive of the Institute of Chartered Accountants of New Zealand Craig Norgate who is very much in favour of the merger and sees some practical benefits accruing toNew Zealand. However as I have pointed out there is the representation of those smaller accountancy firms.Another issue that has been raised is the potential if there is a merger of the two bodies and they become one for us to see—I do not know whether “exodus” is the right word—some accountants moving across the Tasman. We must ask whether that would impact on New Zealand. So those things are things that I think we must be asking questions about. We must be looking at them and thinking about them while we are considering this bill.There is another issue that I am interested in teasing out. This bill has four main aims. There is the amalgamation which is one. There is also the allowing of competent auditors with appropriate qualifications to offer audit services to New Zealand firms allowing audit firms to incorporate as companies if they decide that that is the most efficient business form for them and replacing references to “chartered accountant” in various Acts etc.One of the changes that will be occurring is the requirements on charities which my colleague David Parker touched on. There will be a requirement within this legislation for registered charities of a certain size to have their financial statements audited or reviewed by a qualified statutory auditor. The bill makes a differentiation between large charities and smaller charities. Large charities which are those that have operating expenses of more than $1 million are to have their financial statements audited. Medium-sized charities which are those with operating expenses of between $500000 and $1 million must have their financial statements audited or reviewed. Smaller charities will have some requirements on them and I think this is another thing that we must look at carefully.As I understand it there are around 26000 entities on the Charities Register. Most of them are small or very small so the impact of this on all of them as I understand it is quite minor but I think that is something that we have to look at carefully. If there is an onerous impact on particularly those smaller charities then we have to weigh up the effect that that might have but around 2800 of those registered charities as I understand it are put into the “large” or “medium-sized” categories. About 80 percent of those large or medium-sized charities already have an assurance engagement completed.So I suppose that I am a little bit confused as to what import this actual change is going to have. I do also hope that charities are aware that this legislation is going through the House and is going to a select committee. I hope that charities do take the time to consider this legislation carefully to come before us and tell us what they think the impact will be or to ask us to consider certain matters. So those are the major issues that leap out at me on first looking at this piece of legislation which is about to hit the select committee.As I said we support this bill. We agree with its intent. We think that it does fit within the broader scheme of changes to financial management in all of those pieces of legislation. We will be looking carefully we will be listening carefully and we will be listening for the voices of those who are raising concerns and issues with this bill so that we can be assured that we are not rushing into an amalgamation in a way that may come back to bite us later on.