Curran Clare: Accounting Infrastructure Reform Bill — In CommitteeText is incorporated into the Bound VolumeCurran Clare: Accounting Infrastructure Reform Bill — In Committee[Sitting date: 28 October 2014. Volume:701;Page:318. Text is incorporated into the Bound Volume.]CLARE CURRAN (Labour—Dunedin South):First of all I would like to congratulate the new Minister on his role as the Minister of Commerce. I echo my colleague Clayton Cosgrove’s concerns about the place that commerce is now held viewed by the Government as being outside Cabinet. I would also make the comment that I look forward to the new agenda that the Minister of Commerce is going to announce very soon to the country as to what he has in store in terms of ongoing legislation and the particular stamp that he wants to put on his portfolio. There is particular interest around the necessary reform called for by the chair of the Commerce Commission of section 36 of the Commerce Act and the improvement of competition law—leaving aside the cartels bill that is going to be hitting the House at some point soon—and where he wants to take that evolution of competition law next.I am very keen to hear the views of the Minister given that his previous claim to fame has been passing after many many months of discussion in this Chamber the august Electronic Transactions (Contract Formation) Amendment Bill. It was one of the most shall we say meaningless pieces of legislation I have seen come through this House in the 6 years that I have been here which tidied up a small area of uncertainty in contract law around the timing of when a contract is accepted by electronic means. That summary is basically about all that bill deserved.Just in relation to this bill and the debate in the Commerce Committee there is no doubt first of all that there was a very cooperative discussion on this bill across all parties in the House and that some useful outcomes came out of the select committee stage in the changes that were made. As colleagues have mentioned the biggest part of this bill that taxed the discussion in the select committee was the religious exemption. There is no doubt that that created some real challenges for the officials—and I would like to acknowledge their role in the whole of this bill not just on that particular part—because leaving aside all hilarity around the particular issue it actually presented a real moral dilemma for the committee. The officials had to work quite hard to go back and look at precedent around exemption on religious grounds and I think that at one point we heard about a similar provision in the Valuers Act of 1948 which is really going back quite a long way.I just want to put on it record in the Committee tonight that I still have reservations about the position that we came to. I think it was a fair outcome but I still have reservations around the unintended consequences of that religious exemption from belonging to an accredited body and the importance of that—how you can sit outside that body and still perform the functions and how there can be the necessary scrutiny. I would like to hear from the new Minister any views that he would like to share with us around that.I just want to quickly mention another matter that was brought to us as a result of submissions and that did raise some discussion with the officials but never actually made it into the bill and that is around whistleblower provisions. I just want to briefly inform the Committee around that. “BDO New Zealand”—which is the accountants and auditors and advisers—“noted that due to confidentiality rules the auditor cannot share client information unless there is a misstatement resulting from fraud.” and it recommended “a wider ability for auditors to communicate with the relevant regulator for statutory audits.” This is actually quite important and the committee went away and looked and said that “Under the [Financial Markets Conduct Act] auditors must whistle-blow in relation to certain financial products. Auditors of issuers of debt securities and registered schemes … will have an obligation to provide information to supervisors or in certain cases to FMA if there are reasonable grounds to believe that there is a serious problem with the issuer or scheme. Auditors will also need to provide relevant information about issuers to supervisors on request.” So that Act does protect auditors “against civil criminal and disciplinary proceedings in relation to the disclosures made.”There are also similar provisions for auditors for banks and insurers to report to the Reserve Bank and obligations for “auditors of other companies or corporate entities to provide requested information to the Registrar of Companies …”. Although the officials told us that they could “see the value of extending whistle-blowing protection provisions (and protections from liability) these are obligations that need to be considered in relation to particular regimes and regulators.” They said that these obligations have got “significant consequences for auditors and their imposition has given rise to concern from auditors in the past.” They said that “The International Ethical Standards Board for Accountants’ initial proposals on the appropriate extent of auditor responsibility for whistle-blowing under audit and assurance standards have not been well received … because ‘one size does not fit all’.” However they did say to us that “any extension of whistle-blowing obligations would be best considered once the outcome of that analysis is known.”I would just like the Minister to take note of that. Whistleblowing protections in this country are not that great. They are quite weak generally. In this particular area of financial markets and the collapse of financial companies and in all of the areas dealt with by the Commerce Committee—which with respect the current Minister has not been party to in the last 6 years—the ability to blow the whistle so to speak and the ability to reveal information and to bring stuff to the public attention and get it dealt with has been paramount and has underpinned a lot of the legislative changes that have taken place right across the board.In this particular piece of legislation this should not go unnoticed and it should be considered as an ongoing issue to be watched. Whistleblowing around practices whether it is through auditors or accountants whether it is lawyers whether it is financial advisers or whether it is anybody else operating in the financial environment where corporate crime white-collar crime is rife is an issue that I think we are only scratching the surface of in this country. It is something that I would hope that the new Minister in the chair will in this position be taking serious account of.There will be further discussion around this bill with the various provisions. I certainly think that there has been a lot of hard work done by the Commerce Committee. I do want to acknowledge the role played by the chair Jonathan Young and other members of the select committee and right across the Chamber. I think this is a good piece of legislation. I think there are some issues that still need to be paid attention to and I do again register some unease around the exemption on the basis of religious affiliation for belonging to and for having to belong to an accredited body.