Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Madam Deputy Speaker. I've got to say it's an absolute pleasure to be speaking on this bill the Companies (Clarification of Dividend Rules in Companies) Amendment Bill introduced by my good friend and colleague the good member from the Bay of Plenty who of course has spent 20 years in the agricultural sector in many parts of it. Not only in the dairy industry but in the kiwifruit—in a whole raft of other areas and I think it's only right and just that he bring such a good bill to the House. I'd also just like to acknowledge the speaker just standing before Kris Faafoi who has noted that the Labour coalition Government is going to support this bill which I commend as well.It's actually a very simple bill and it's effectively about changing section 53 of the principal Act the Companies Act which states that To avoid doubt nothing in subsection (2) prevents the constitution of a company providing that shares in a class do not confer a right to receive dividends in the circumstances specified in the constitution." So some people will be wondering what that means. I know you all have a firm steely grasp on these issues as you do on many things but for those people who are not quite so financially literate what this means is that there are many many businesses that are established under the Companies Act and are in effect companies but operate as cooperatives. That's where the issue lies and this is what Mr Muller's bill is trying to address.When you say "Well there's not that many cooperatives." well in fact there are raft of them and if you think of the main one—most people can think of Fonterra as a cooperative—but even in the dairy sector you've got Tātua Cooperative Dairy you've got Westland Cooperative Dairy down in the South Island. If you think about the food type of thing Foodstuffs NZ is the classic. My good colleague over here Mr Dan Bidois the good new member from Northcote of course worked at Foodstuffs until very recently—until he got elected. Then in the meat industry we've got Silver Fern Farms Alliance: these are all companies but are operating as cooperatives. Then we've got other farming industries such as Farmlands Cooperative Society which is supplying. Then we've got the medical insurance industry—Southern Cross medical insurance. Then every Saturday most of you at some stage will be going down—when I say that Madam Deputy Speaker I mean all members—to places like Mitre 10. And the last one which is an interesting one is the Livestock Improvement Corporation. Many people won't realise that it is a company it is a cooperative but is also listed on the New Zealand stock exchange. It has a market cap of about 85 million. It's got 11000 dairy farmers that are members of it.So what this bill is doing is it creates the opportunity to be able to structure the cooperative's affairs that meet the practicality of what really goes on. So many people whether it's in a medical insurance arrangement or whatever might become a member of the cooperative and therefore be entitled to a share and a right to a dividend and a voting right—those three aspects that normally make up a corporate-type arrangement. The thing about the Act at the moment the Companies Act is that it's very unclear—well it's a technical bill but it is unclear to the extent that to differentiate the different types of rights of the shareholder is not actually that clear particularly under section 36 which people have noted before.So this bill which I think is a great bill creates the opportunity for people to structure their affairs and in many cases we're talking about dry and wet shares; where dry shares are people who previously supplied to the cooperative but no longer supply those goods or services but still want to remain with that cooperative. This provides the mechanism to allow those people to remain to have full rights as a shareholder full voting rights but just what they might do with the dividend flows and things like that.So it's creative it's much more permissive and it's much more appropriate because it does reflect reality. Of course there's strong overwhelming support for this particularly from the cooperative sector and I think Zespri which is probably one of the most well-known of all of these is one of the strong proponents and I fully endorse this good bill."