Power Simon: Limited Partnerships Bill — Second Reading 
Power Simon: Limited Partnerships Bill — Second Reading 
[Volume:645;Page:14640] 
SIMON POWER (National—Rangitikei) 
: 
 I follow on from the Minister’s opening remarks. Although he had some colour return to his face by the end of his speech he did not have much colour at the start of it after the vote on that last bill. 
National will be supporting the second reading of the Limited Partnerships Bill. I think this is one of those pieces of legislation that actually shows how the select committee process is so valuable in an MMP Parliament. The Commerce Committee managed to make substantial amendments to this bill. Although the Minister covered a number of those amendments in his opening remarks he undervalued in some respects just how comprehensive those changes made by the select committee were. I am pleased to hear him confirm that those changes added value to the Limited Partnerships Bill and I am also pleased to note that matters around revenue collection and tax streams were clarified to the advantage of those seeking to use this particular format for investment. The Limited Partnerships Bill introduces to New Zealand law a new limited partnership vehicle which is intended to encourage investment in New Zealand as the Minister said. The legislation is an attempt to catch up with overseas practice to ensure that experience and positioning for New Zealand does not leave us behind close competitors such as Australia when trying to attract venture capital. 
Although I would normally sit full time on the Commerce Committee I was required to sit on the Justice and Electoral Committee during much of the time this bill was considered. In the Justice and Electoral Committee at that time we were dealing with a piece of legislation called the Electoral Finance Bill so I was unable to participate in the lengthy discussions that the commentary on the report back from the Commerce Committee on the Limited Partnership Bill indicates must have occurred. When one takes the opportunity to read through the report back one finds it is clear that the amount of deletion and amendment was substantial—not just the odd part or clause on the way through but right down to the insertion of a new clause 2 detailing the commencement date of the Act. The committee believed that partnerships should have some sort of certainty about the commencement date and noted that it was disappointed that the explanatory note to the bill failed to provide any reason for deferring commencement of the bill. 
The deletion of clause 11 and the insertion of an entirely new clause 11 by the select committee made explicit the powers and the capacity of a limited partnership in according full rights and powers—as one would expect. More than that fiduciary duties and obligations of a general partner were inserted by way of a new clause 43—the original clause 43 was deleted—and the insertion of a new clause 43A which provides that a limited partner does not have a fiduciary obligation to the limited partnership or any partner something that again it appears was in need of clarification in the original bill. 
It is interesting that with respect to confidentiality of information clause 99 was removed and a new clause inserted to require the registrar to treat limited partner information as confidential and not make it available to the public—the removal of in fact the ability for the purview or scope of the Official Information Act to apply. This is not without controversy and may well be the sort of thing that is detailed or looked at more carefully during the Committee stage. 
The safe harbour mechanism originally recommended in clause 27 had to be amended and as far as derivative actions were concerned new clauses 74A to 74D had to be inserted to provide a process for a partner to take proceedings against a limited partnership. 
Clause 13 was deleted and further amendments were made. Clause 14 was deleted as well. With respect to the method of contracting contained in the bill new clause 15A was inserted and a further amendment made to allow a limited partnership to amend a partnership agreement either by means of a written document or in accordance with the procedures set out in the limited partnership agreement. 
A new clause 9A was inserted—as stated—and the deletion of subclause 17(2) and insertion of new subclause 17(2) was also recommended. The insertion of new clause 18A which sets out when a person becomes a general partner and a new parallel clause 18B were also included. These amendments tell us two things. The first thing it tells us is that the original bill was not up to scratch. The second thing it tells us is that the select committee process can work on occasion reasonably constructively to fix up legislation that is referred to the committee in the first instance. So far over the last couple of years I have worked with Lianne Dalziel on a number of issues in the commerce area and I have to say she is by and large willing to listen to suggestions for changes and amendment. Although National will be supporting this bill at its second reading for the obvious reasons I have outlined it was quite clear that the Government needed to have its ears well and truly opened given the substantial number of major amendments deletions and insertions that the select committee saw fit to apply in order that this legislation could actually work in a constructive setting. 
I think we will be able to have a more detailed discussion about these clauses at the Committee of the whole House stage. Some of those matters I have mentioned are not without controversy; the confidentiality and non-application of the Official Information Act are matters that will require a little further examination. I know that Paul Swain will be anxious to share with the Committee of the whole House his knowledge of the tax laws that apply once moneys are withdrawn or change hands from different accounts under this new limited partnerships regime. It is known that his knowledge of these revenue stream matters will add substantially to the discussion in the Committee of the whole House. I say to the Hon Paul Swain that National would look closely at any Supplementary Order Paper or amendment that he might like to table in his own name in order to clarify some of those issues. 
National looks forward to discussing further matters relating to this bill in the Committee stage and supports the second reading of this bill.