Penk ChrisCHRIS PENK (National—Helensville): Thank you Madam Speaker. The Electoral Amendment Bill (No 2)—normally of course at the second reading we are reflecting on what we've heard by way of submissions at the select committee process. We find ourselves in the unfortunate position of not having had the benefit of any such submissions so I'm going to do my very best tonight in my second reading contribution to make an educated guess of the kind of things that we might have heard. I don't suppose my imagination or knowledge of the relevant areas will be as good as having heard from the members of the public themselves on this. Of course the reason we are in this position is that the Government including all parties thereof have put forward this urgency motion such that we are considering this in one fell swoop. The closest that we've got to an explanation from the other side is that with the bill due to come into force—if it passes as an Act—on 1 January or to be effective at least in some provisions then we need to pass it now. Well of course the obvious answer there is that it doesn't need to come into force on 1 January; that's just something that's written in the bill itself. That too could be changed and we could align all of the provisions to come into effect on 1 April in the way that's already been allowed I think in clauses 15 and 16 from memory. So the rush is entirely unnecessary even from that rather silly sort of procedural basis. So not having had the opportunity to hear from submitters at the select committee process I suspect that the kinds of things that they would sensibly raise would be points such as were at least raised on Twitter today by several characters well-known to the #nzpol community with particular interest in electoral law matters. Sadly I am not one of them at the moment. No doubt the honourable—excuse me you know what? I'll move on from there. In any case Graeme Edgeler had made a very good point—and I'm going to paraphrase it by use of the phrase shell companies". So his point was—and I'm making this I remind the House in lieu of him being able to do so in the select committee—"Foreign-owned New Zealand - based companies are still allowed to make unlimited donations." Well that's a bit unfortunate in relation to the stated aim of the bill as we've heard repeatedly from the Minister and other members opposite and the aim is worthy in itself. Chlöe Swarbrick: Put forward an SOP Penk. CHRIS PENK: I hear a suggestion from Chlöe Swarbrick to put forward a Supplementary Order Paper (SOP) and she knows very well that I will do exactly that in relation at least to some of the aspects. I'll do what I can Ms Swarbrick having only received a copy of the bill for the first time at 11 o'clock today. So that's something for you to look forward to no doubt. So it is that in relation to shell companies which is my phrase not his I would note that it's entirely possible to have ownership of a company—let's start with a company—that's 100 percent foreign and yet can still be incorporated in New Zealand—yes with a New Zealand - resident director—and that would not actually be caught by this bill that purports to limit foreign donations. So that's absolutely extraordinary to me. We're sort of using a sledgehammer to crack a nut procedurally and you're actually missing the nut entirely with this very obvious loophole that you can have a foreign-owned company and therefore a foreign-controlled company. Any company worth its salt—and in fact any company complying with the law of the land—has to do what's in the best interests of the shareholders thereof. So while it's attractive in one sense to have a pretty brightline test that something according to the New Zealand Companies Register is either incorporated in New Zealand or not the fact of the matter is that the intent of the bill is entirely able to be circumvented in this way and that's something that we should actually be very concerned about. So too an incorporated society. I actually don't know so I'm on risky territory but no doubt I'll be corrected if I'm wrong but I think that it may be possible for all members of an incorporated society to be foreigners—excuse the shorthand. But as far I'm aware there are not any requirements in New Zealand law that the members of an incorporated society need to be New Zealand - based in any way and yet the incorporated society could be incorporated in New Zealand. That being so such an entity would not be caught by the definition of overseas person—Dr Duncan Webb: Read the Incorporated Societies Act 1908—older than you are. Read the Act. CHRIS PENK: Read the Act? Dr Duncan Webb: Yes. The Incorporated Societies Act—where do members have to come from. CHRIS PENK: Well I think this is a really interesting point because Dr Duncan Webb may well be right on this and I wouldn't be surprised if he is but these are the kinds of questions that the select committee process should actually thrash out. This is exactly the kind of thing that should be thrashed out. As I say in relation to companies it's 100 percent ownership. If I don't know it then I don't know what hope—a lot of New Zealanders who would be standing for election or who otherwise concern themselves in relation to electoral law will not have the opportunity. That's before we even start looking at trusts which might be somehow considered to be—what's the test? Here we go: have a "principal place of business outside New Zealand"—a head office. Well that's not necessarily something that a trust would have let alone a foundation. I'm sort of in two minds about whether I go there so to speak in terms of foundations. Certainly I won't talk about one particular foundation because I think you know we probably don't need to refer to that. Hon Clare Curran: What about the National Party foundation? CHRIS PENK: Oh here we go. Well I'm now going to respond because the Hon Clare Curran is asking about the New Zealand National Party Foundation. The good news about the New Zealand National Party Foundation Ms Curran is that it records and receives donations in a transparent way in accordance with the current law and then—Hon Dr Nick Smith: They're all declared. CHRIS PENK: —they're all declared; exactly—they are made as appropriate. But the distinction with the New Zealand First Foundation as I understand it—but I would welcome being corrected by the Hon Tracey Martin in a call—is that it does not record the donations that come in to the foundation. That is exactly the point on which it is so relevant that the legislation is deficient and on which Ms Swarbrick will be very pleased to know there may well be an SOP in the pipeline for that. I'm sure that I will enjoy her support and that of her Green colleagues if not New Zealand First in relation to that. Another thing that the select committee may well have looked at if it had been afforded the opportunity and again been the subject of fair submissions is the notion of a ban. Well we've heard already from the Minister that this is a ban which is totally different in nature from what the current electoral law says and yet we've already explained on this side of the House that we're merely shifting the threshold—admittedly from $1500 to $50—but it's either a ban now and then a ban later or it's not a ban at all. So that's the kind of thing again that I'd expect submitters to be raising and to be interested to know. As for reasonable steps well this is the key phrase really in terms of what party secretaries or candidates are expected to be able to take. We don't have any sense of what that is based on other than obviously the meaning of those words themselves as we might expect. So again it would be helpful to have a select committee process to thrash that out by way of submissions and so forth. Another thing that select committee submitters again if they'd been given the opportunity to have a say might reasonably have questioned is the proportionality doctrine that Minister Andrew Little has put forward tonight. I actually think that the idea's got a certain amount of merit. I think it's probably reasonable at least as a starting point of discussion to say the smaller a donation the less attention needs to be paid and maybe the less rigour and the less scrutiny but it's not something that the law actually says. So it's something that's in the Minister's mind and if he thinks it's reasonable and a matter of good lawmaking then for goodness' sake let's see it in the actual law. I'd certainly welcome the opinions of New Zealanders who would be subject to the law to actually be able to say whether they think it's a good idea or not and if they do and if the select committee were to agree and so forth then we could put that law in the law so to speak. We could put the rule in the law which is exactly where it belongs and not merely to be referred to if stumbled upon in Hansard in future years perhaps when we've got the difficult position that the Electoral Commission might be placed in to simply have to second-guess what the legislative intent was in discharging something of a judicial function. That's constitutionally inappropriate in a way that should be obvious to everyone in this House. The other thing I think that within my remaining minute Madam Speaker—I could go on and I will at the committee stage which is something for you to look forward to. My final point for now is to understand what the law is actually looking to do. So that is to understand the nature of the threat or the problem that has to be solved. It's all very well to say that the current select committee process which is engaged in an election inquiry says one thing here and this bill which has been introduced under urgency does another thing here and that somehow the two should be connected. But we should actually be looking very carefully to try and understand and check that what the bill is actually doing is a reasonable and proportionate and direct response to the problem that is out there. So looking at the document—which I hasten to add is publicly available—Impact Summary: Mitigating foreign interference through party and candidate donations this is advice to the Minister available today. So it says "concern about foreign interference is growing" and it mentions a few international examples. I can't go into them now for reasons of time and I won't breach the privilege of the process but suffice to say there's a lot of good stuff in there that deserves an airing and should be heard."