Worth Richard: Business Law Reform Bill — Second Reading 
Worth Richard: Business Law Reform Bill — Second Reading 
[Volume:616;Page:12024] 
RICHARD WORTH (National—Epsom) 
: 
 Several days ago I was speaking about this bill and my recollection is that I was talking about the significant contribution that small and medium-sized businesses make to this country and how critical it is that the business environment in which they operate is of such a character that they can flourish within it. Those businesses commonly employ 19 or fewer employees and they represent about 97 percent of all New Zealand companies. They employ 43 percent of all employees and produce 39 percent of all goods and services. 
National supports the Business Law Reform Bill and I note that this bill is an illustration of the use of an omnibus bill which I think should be encouraged. The relevant Standing Orders are Standing Orders 261 and 262 which certainly enable the passage of legislation that is remedial and worthwhile in its purport to be dealt with without the delay associated with the requirement that one bill deal with one subject. 
I was interested yesterday to read a comment in the  
New Zealand Herald  
reporting a poll that had been carried out by the accountancy firm Grant Thornton. That international firm had surveyed 6900 medium-sized businesses including 150 businesses in New Zealand. One of those poll results when the respondents were asked about the biggest constraint on the expansion of their businesses was that 45 percent of the New Zealand respondents answered that it was red tape. I guess I was not surprised at that because in the last few days the Hon Dr Michael Cullen journeyed to the Wairarapa to make a speech at a business breakfast and he was bold enough—or one could say rash enough—to post the speech on his website. In it surprisingly he advocates greater use of red tape and speaks about the advantage of red tape in this short extract: “Turning to the issue of compliance costs here again it is important to set aside the naïve view put about by some of my political opponents that the world would be a better place if there were no regulation of business.” He goes on to espouse the benefits of red tape and says: “The truth is we all benefit from regulation.” 
National welcomes this bill because it is a modest—and I would say only a modest—attempt to strip away some of the red tape that surrounds business activity. Indeed the commentary on the bill under a heading “Introduction” states the amendments are for the purpose of removing unnecessary compliance costs. A raft of statutes is referred to in the bill. I will not deal with them at any length but I note that significant changes are being made to the Distress and Replevin Act 1908—one of the older Acts on our statute book. 
Distress of course is a self-help remedy available to landlords of commercial properties which enables them to enter the property to seize chattels belonging to a tenant for the purpose of recovering rent in arrears. The word “replevin” refers to the ability of a tenant to retake the seized goods. That may happen in circumstances where either the tenant’s rent is not in arrears or the value of the goods seized exceeds the outstanding arrears. The changes made there which basically clarify the interaction between the Distress and Replevin Act and the Personal Property Securities Act are no doubt welcome. Changes are made to the Personal Property Securities Act and to the Securities Act. 
As other members have commented one of the more interesting changes made to the Securities Act is that for the first time it defines what a wealthy investor is in terms of both assets and income. There are also complicated provisions introduced by Supplementary Order Paper 152 relating to the void and voidable allotments of securities issued by foreign issuers. 
That is all very well. Those changes will no doubt be welcomed and to some extent they make policy adjustments in terms of the bargaining power of the various parties to multiple commercial transactions. But I express the wish that this House become more seriously involved in the whole aspect of compliance costs because this type of bill is the ideal vehicle for those issues to be addressed. In December 2000 the Government set up a ministerial panel on business compliance costs. My understanding is that the panel made about 160 recommendations on ways to reduce compliance costs. Limited progress has been made in that regard. It is good to see some progress being made but it would be far better if there were much greater progress. 
More cynically since 2001 Cabinet has required that a business-cost compliance statement be completed for any proposals that have red tape implications for business. One of my tasks is to chair the Regulations Review Committee which looks at all secondary legislation passed by the executive. I would have to say that the work of the executive in the reduction of business compliance costs is to use a simple word pathetic—absolutely pathetic. Just for a start the  
Cabinet Manual 
 which deals— 
Hon Paul Swain 
: Oh! 
RICHARD WORTH 
: I am glad the Minister is here to make that timely interjection because it is important that he hears this. For a start in the  
Cabinet Manual 
 there are so many circumstances in which such cost statements are not required that the scrutiny obligation can be bypassed. 
What I would like to see us consider in a raft of initiatives to deal with aspects of compliance costs is the possibility of picking up what has been done in the Australian House of Representatives with the Australian Main Committee. I commend the House to look at that particular initiative.