Wong Pansy: Business Law Reform Bill — First Reading 
Wong Pansy: Business Law Reform Bill — First Reading 
[Volume:632;Page:4238] 
PANSY WONG (National) 
: 
 The National Party has agreed to support the Business Law Reform Bill in its first reading and in going to the select committee on the ground that as the Minister Lianne Dalziel has just reinforced it is about technical amendments. But I am a bit disappointed that the Minister did not take the opportunity to clarify an issue that has just been brought to our attention. 
The members of the New Zealand Captive Insurance Association are engaged in being what we commonly know as self-insurers—that is within a group of companies they pool their premiums and invest as a more cost-effective way to manage their risk. I understood that the Minister was very supportive of that industry which is a growing industry. They were told by a ministry official that the changes in this bill to the Insurance Companies’ Deposits Act 1953 would actually be interpreted as stopping any further non - New Zealand parent organisations from forming captives under the Act and that existing non - New Zealand owned captives would be struck off the Companies Register which seems to be a conflicting undertaking from the Minister and the officials. 
I hope the Minister or officials will take a very early opportunity at the briefing to the Commerce Committee to put those doubts to bed so that the industry does not think that quite a dramatic policy decision has been made. I have no idea whether that was actually what the Minister had in mind in stopping entities from using the words “insurance” or “assurance”; nonetheless it demonstrates that after a few years in Parliament one gets a bit cynical and sceptical about the phrase that a bill is “only an omnibus bill”—that is only for technical amendments—and that it will not cause drastic changes. I hope that very early on at the Commerce Committee consideration period officials can clarify that for members and I am sure the industry will be keen to make a submission on that part. 
The other interesting issue I would like to raise is the changes to the Friendly Societies and Credit Unions Act 1982. National welcomes and supports those changes but I learnt from that sector that the Hon Jim Anderton had promised those changes a few years back. Its members were expecting those changes a few years ago before the establishment of Kiwibank. Friendly societies and credit unions believed they were able to establish themselves ahead of Kiwibank and take advantage of expanding their businesses. So that is not exactly what I would call an omnibus bill being used to fast track the business community’s concerns or needs. 
In talking about the priority of the Government in terms of how it addresses some of the more urgent issues I hope the next speaker from Labour might enlighten us as to why the securities legislation that was reported back to the House last year and that has gone through its second reading which National supported is still sitting on the Order Paper without any urgency being paid to it because within the Securities Legislation Bill there is a provision for disclosure with regard to financial advisers. I want to take up that issue because the Minister of Commerce has assured Commerce Committee members that she will address urgent requests from the business community. We learnt recently that there has been turmoil within the finance sector. Indeed one of the finance companies Prudential Financial has gone into insolvency. It is alarming that after that finance company withdrew its prospectus some financial advisers advised that an additional $9 million be invested in it. It is quite outrageous that financial advisers had no idea that a prospector had been withdrawn and as a consequence $9 million was invested after the company had pulled its prospectus. The Securities Legislation Bill would have provided for additional disclosure of the qualifications and history of those financial advisers. 
So in talking about addressing some urgent issues I tell members that I am surprised the Securities Legislation Bill is still sitting on the Order Paper. I am sure my colleague Brian Connell when he takes a call might give us an explanation as to why that particular bill did not receive urgent attention. I understand that in the bill there is a tightening-up of the definition of an insider trader. Such a definition would have covered the situation when the Hon David Cunliffe when giving an interview to the Bloomberg News agency commented on Telecom’s future dividend policy being on a reduced scale. That would have got him into trouble if the Securities Legislation Bill had been passed. I wonder whether that was part of the reason why the Government is holding back on the passage of that particular bill. 
I also want to comment on the Minister’s statement that the Business Law Reform Bill is about the reduction of compliance costs to the business community. I will share with the public some of the statements made in this bill about the benefits of the changes. We are looking at statements about options to reduce Companies Office administration costs for example but the amount will not be able to be determined until some modelling has been done. The explanatory note of the bill states that option 6 will add to the Accounting Standards Review Board’s range of functions but it is unlikely to be used often. Then there are general statements like: “There will be costs in administering the infringement notice system. However that will be partially offset by the reduction in court enforcement.” There is also the general statement: “The business community is the major beneficiary of the proposed changes. Option 2 will reduce compliance costs …”. 
I remember the Minister of Commerce coming before the Commerce Committee during the estimates session and assuring the committee that we could look forward to some very robust tightening of the compliance cost statement and that members will be presented with a lot of details—that in fact it will be quantified; it will not consist of warm and fuzzy statements like those I have just shared with the public. So I think we are still light in the area of making sure that officials have indeed paid attention to ensuring that a robust cost and benefit analysis is being carried out. I cannot wait for the Minister to set up her so-called independent advisers attached to the select committee to help us scrutinise how robust those changes to the compliance cost statements are. 
National will be supporting this legislation going to the select committee but we had better have some good answers to the issues we have raised during this first reading. 
Sitting suspended from 6 p.m. to 7.30 p.m.