Tanczos Nandor: Insolvency Law Reform Bill — First Reading 
Tanczos Nandor: Insolvency Law Reform Bill — First Reading 
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NANDOR TANCZOS (Green) 
:  
I also intend to make a fairly short contribution to this debate and rise really to indicate like other parties before us that the Green Party will be supporting this bill to select committee. We want to draw particular attention to a number of things. 
First of all there are clauses in the bill to allow for the voluntary administration of insolvency proceedings for companies which will increase the survival chances of viable businesses or at least maximise the return to creditors and we support the provisions to do that. Currently insolvent companies are closed and sold off and there are obviously consequent job losses and creditors often lose out significantly. So we think this provision will benefit a large number of people. It allows creditors to collectively vote on a rehabilitation plan for a company. There has been some contention around whether it provides the potential for failed directors to deflect scrutiny of their own business conduct and we think that that is something that the select committee should have a look at but in general we think the provision is worth supporting. In that regard I was a bit surprised to hear the comments by Pansy Wong. Perhaps I am mistaken but she seemed to be suggesting that business failure is only observable in hindsight. 
Pansy Wong 
: Yes. 
NANDOR TANCZOS 
: I find that a surprising idea. I do not know how it has been for the member but certainly when I ran a business—in fact in all of the businesses I have ever run—I was intensely aware of the prospects of success or failure at any particular moment. When things got tight as they inevitably did and I think they probably do in all small businesses I knew exactly how tight they had become. 
Pansy Wong 
: How many businesses? 
NANDOR TANCZOS 
: Quite a few actually; the member would be surprised. So I was a bit surprised by the comment that those things were only observable in hindsight because I think that people who run businesses are acutely aware of the financial position of their companies. I think it is perhaps short-changing the business owners of New Zealand to suggest that they are not aware of those things. 
We also support the establishment of criminal penalties for phoenix companies and directors who intentionally cause creditors material loss. We think that that is a positive step so we support it. We support the idea of harmonising our insolvency law with Australia’s and also the readdressing of the priority of debts allowing for the principles of fairness and equity in determining payouts. I draw attention to clause 272 where those priorities are set out in particular following the comments of Ross Wilson about the need for protection for workers when it comes to insolvency and the very serious situation workers often find themselves in. They have not always had a high priority. 
Of course all creditors are casualties when it comes to insolvency but an employee is likely to be someone whose entire income is derived from that company through his or her job there. Therefore I think there does need to be some particular consideration for employees’ interests and the provisions in clause 272(2) are something that we welcome. Clause 274(1) which increases the maximum amount that can be paid out in those circumstances from $6000 to $15000 is also something that we support. 
So we support the bill to select committee. We think there are some issues that the committee needs to address but essentially we are very welcoming of this long overdue revision of the insolvency laws.