Cunliffe David: Business Law Reform Bill — In Committee 
Cunliffe David: Business Law Reform Bill — In Committee 
[Volume:616;Page:12421] 
Hon DAVID CUNLIFFE (Minister of State) 
: 
 It is always a pleasure to have the opportunity to respond to questions raised on matters such as the Business Law Reform Bill. This is one of the exercises that Parliament undertakes that is typically relatively bipartisan which allows members to discuss technical matters that are embedded within the bill. They are typically preconsulted between the parties and discussed quite fully at select committee so this discussion on the floor of the Chamber in Committee allows us to draw together some of the threads of that discussion. 
I want to turn briefly to two related amendments that have been proposed by Stephen Franks from the ACT party. The first is the amendment to clause 90(2). He has expressed the view that the Government is unlikely to support it and I can confirm that the Government will not be supporting the amendment. The reason is pretty clear. The proposed amendment would be a profound departure from the scheme of the Securities Act which draws an appropriate balance between investor protection and promoting a vital securities market. The amendment would in our view tip the balance too far away from providing uniform and reliable information to investors. 
I now turn to the second amendment to clause 90. Again I am afraid the Government cannot support that amendment. The bill sets up objective tests for when an investor may not need full disclosure. The amendment proposed would enable an investor essentially to opt out of Securities Act disclosure meaning that the investor could be subject to undue pressure to do so or could sign away his or her rights on a pro forma basis without realising the full implications of doing so. It is the Government’s desire to reasonably protect investors by ensuring that they have a range of information available to them. 
In closing I take the opportunity afforded by Mr Connell to comment on section 5(2CD) in clause 90(2) which is the definition of “wealthy”. He has raised the perfectly valid question of whether that definition is an arbitrary one and what basis lies behind it. I can confirm for the member that the test matches the test that is applied in Australia. As the member knows we are attempting to harmonise our business and commercial law and regulation where prudent so as to allow businesses to operate relatively freely and with minimum compliance costs on both sides of the Tasman so it is in keeping with that objective. It follows from his question that while the bill has implanted a specific figure—$2 million of assets or $200000 in income for each of the last 2 years—one might ask whether that figure is frozen for all time and what happens if inflation erodes the real value of that figure. I can confirm for the member that the bill provides for the Governor-General to be able to increase by Order in Council those amounts in keeping with inflation so that problem is dealt with. 
I invite the member in closing to take a common-sense view of it. The counterfactual must surely be the question of whether someone with $2 million worth of assets or an annual income of above $200000 for each of the last 2 years is not wealthy. I can assure him that my constituents in New Lynn my colleague Ms Mahuta’s constituents in the Waikato and probably his constituents in Ashburton—perhaps with the exception of one or two of the landed gentry out there on the plains—would probably be of one mind that the $2 million threshold would meet that test. 
In closing I commend the bill to the Committee. It is part of a regular update process to ensure that our commercial law does keep up with the times that any remedial matters are taken care of expeditiously and that business has an environment to work in that is as smooth and as low-compliance-cost as possible. I commend the bill to the Committee. 
The question was put that the following amendment in the name of Stephen Franks to clause 90 be agreed to: 
to amend section 5(2CA) by omitting paragraph (c) and substituting the following paragraph: 
(c)contains no information which is misleading or deceptive so far as any promoter or issuer knows or ought to know; and