Connell Brian: Business Law Reform Bill — First Reading 
Connell Brian: Business Law Reform Bill — First Reading 
[Volume:632;Page:4241] 
BRIAN CONNELL (National—Rakaia) 
: 
 Thank you Mr Assistant Speaker for the call on the Business Law Reform Bill 2006. I have to say that giving a speech after my esteemed colleague Pansy Wong has spoken is always a difficult experience but I will do my humble best to bring some further clarity to what is otherwise fairly light legislation. 
As we have heard this is an omnibus bill that makes a number of changes to commercial legislation suggested we are told by Government officials lawyers and business people. An omnibus bill is the preferred modus operandi by the current Minister of Commerce but of all the changes that have been suggested by the Quality Regulation Taskforce that this Minister has put in play not one of those recommendations has been captured by this legislation. 
I make it clear that National does support this bill and we do so for a number of reasons. The bill purports to reduce compliance costs and within reason any bill that purports to do that will get serious consideration from the National Party which is why we have said we will support it as far as select committee. It will boost law enforcement efforts we are told so we can tick that. It will protect New Zealand’s international commercial reputation—well that is a big claim so let me amend that by saying we believe that it might help. More important it provides the National Party with the opportunity to discuss the broader issues of compliance costs. 
Chris Auchinvole 
: The box tickers! 
BRIAN CONNELL 
: The box tickers as my colleague Mr Auchinvole tells the House. 
The explanatory note states: “The Bill addresses business community concerns with business law legislation as identified by consultation.” But wait there is more. We are told: “These are the cumulative costs of complying with legislation and the difficulties in reconciling different legislation requirements.” Well we can all rest much easier now knowing that we have a definition around compliance costs that tells us the costs are born from having too much legislation introduced into the House. I will come back to that point in a few minutes. 
 The bill actually tackles a very limited range of compliance costs despite the claims by the Government. We are told that the Companies Act 1993 will be amended to create filing exemptions—and one can think the Minister must have had one of her colleagues in mind when she wrote that exemption. 
Pansy Wong 
: Who? 
BRIAN CONNELL 
: Well I can leave it the House’s imagination I am sure. We are also told that filing exemptions to some classes of companies also provides the option of electronic accounts for shareholders. Well that is OK but is that really a big deal when huge numbers of businesses in this country are being choked by compliance costs? 
Let me pick up the issue that my colleague Pansy Wong was going to raise. In the past 2 years this Government has passed a whopping 312 new Acts and 875 new regulations. Labour proclaims that it is the party that is serious about reducing compliance costs. Yeah right! We are told by Business New Zealand that in the last 7 long years 2000 new Acts have been introduced by this Government yet the Minister has the temerity to stand up in this House and say: “Trust us we are reducing compliance costs.” Please forgive me for not being able to get the laughter out of my voice. 
In 2005 the average firm in New Zealand shouldered compliance costs of $53000. When my colleague Katherine Rich asked the Minister at question time today to explain the 17 percent increase from 2003 the Minister said the member had forgotten about 2004. The Minister did not attempt to answer the question because she simply could not explain away a 17 percent increase in compliance costs over 2 years and still argue cogently that Labour is all about reducing compliance costs. For small firms—and that is five employees or fewer—compliance costs have rounded out roughly at $3604 per employee. Those businesses simply cannot comply. It is not that they do not want to comply; they simply cannot afford to. 
The compliance costs targeted by this bill are merely the tip of the iceberg. The bill does nothing to address the underlying problem of the amount of legislation this Government passes every day in an insidious way. Government members get up and talk about compliance reduction but then they actually pass legislation that heaps more costs on to unsuspecting taxpayers. The problem is that the members of the Government have no business experience so they cannot intellectualise the problem of compliance costs. 
Chris Auchinvole 
: They don’t understand it. 
BRIAN CONNELL 
: No they do not. They can talk about it but they simply do not understand it. If they want to reduce compliance costs they simply have to stop doing things. 
Chris Auchinvole 
: They’ve got to reduce compliance. 
BRIAN CONNELL 
: As my colleague says they actually have to reduce compliance. 
Let me give the House an example; let me tell the story about my pieman. I went into a bakery in Ashburton about 2 weeks ago. I went up to the counter; I was buying a pie—quite unashamedly buying a pie because there are great pies in the Ashburton bakery. The owner of the business served me and I asked an innocuous question about how he was. Using language I cannot repeat here because it is not particularly parliamentary he said he was not happy. I asked why as a concerned constituent MP would. He told me to come into his office and he would show me. So I went into his office and it actually looked quite pristine. He asked what I thought and I said it looked clean. He said yes that was because he had just had the walls painted and that just before I came in the health inspector had walked in and threatened to close down his business which includes the 42 employees who work there because he did not have the 47 certificates on his wall because he was painting it. The owner asked me a very good question which was what difference it made to the quality of my pie that he did not have the certificates on his wall. He asked whether it was not enough that he had them. But no it was not because they were not on display. 
Bob Clarkson 
: He should have painted over them. 
BRIAN CONNELL 
: The suggestion is that he should have painted over them then they would still have been on the wall. I thank Mr Clarkson for that very good idea and I shall take that back to the bakery owner. 
Let us have a look at the Quality Regulation Task force that the Minister is the champion of. None of the recommendations in the bill actually come from the latest Quality Regulation Taskforce review so one has to ask what the purpose of the review was. I am struggling for an answer—I am not sure there was a purpose. But let us ask the question of what was wrong with all the other reviews that took place prior to the latest one—the first and second Small Business Advisory Group reports the McLeod Tax Review and the report on the Ministerial Panel on Business Compliance Costs which I want to come back to. Why were some of those recommendations not included in this bill? What was wrong with all the countless other reviews and reports that have been done in the last 7 years? The problem with what the Minister of Commerce is suggesting is that the issues of tax accident compensation the Resource Management Act and labour law are not included in this legislation. The Dunne report which was the report on the Ministerial Panel on Business Compliance Costs that was commissioned by this Government in 2000 stated that it recognised 162 compliance issues that needed urgent attention. Of those 142 came under tax accident compensation the Resource Management Act and labour law yet the Minister of Commerce has not addressed any of those issues at all. I have to ask why the Government is asking the same questions but expecting different answers. Members should think about that. Why keep asking the same questions but expecting different answers? It simply is not going to happen. 
I conclude by saying that National will support this bill going to a select committee but while compliance costs are being fiddled with like this I doubt that it will get our support to go past the select committee stage.