New Zealand Business Number Bill — Second ReadingText is incorporated into the Bound VolumeNew Zealand Business Number Bill — Second Reading[Sitting date: 16 February 2016. Volume:711;Page:9053. Text is incorporated into the Bound Volume.]New Zealand Business Number BillSecond ReadingDebate resumed from 9 February.JACINDA ARDERN (Labour): It has been an absolute education to sit in on the tail end of that last debate and learn what causes on that side of the House a mild cardiac infarction from its various members. It is one of two things—either mention of Labour’s positive economic record or mention of the dire state of the Crown books by virtue of that Government being in power. The fact that we have $78 billion worth of debt—as my colleague rightly pointed out debt that would make Muldoon blush—is obviously the cause of great embarrassment for members like Chris Bishop who seemed to be very animated at any mention of the fact that Labour has a proud record of getting net Crown debt down to almost zero when we were in Government.I might add on that given that we are now talking about the positive record of working alongside small businesses that Labour has an excellent record of starting progress towards making sure that Government was more aligned to the needs of small businesses in New Zealand.But one thing that we as a Government at that time would acknowledge was that there was always more that could be done—there was always more that could be done. In this case if the best job of the Government on that bench in identifying what more could be done for small businesses is the small business number then we are in a pretty poor space.As I talked about in an earlier speech getting the right people having access to capital and making sure that businesses have time to build business plans and work on their own business are some of the three biggest challenges that small businesses face.Yet this business number which we are supporting with heavy concerns does very little to address some of those key concerns. As I want to point out—it has been pointed out by some of my members already—the New Zealand Business Number Bill itself has a number of exclusions in it. One of those important exclusions one of those areas of Government that will not be covered by the number is local government. If you ask any small business which department or interface with government they struggle with the most local government will be raised and yet there is an exclusion for local government here.There are also concerns around the level of uptake. If we do not get a good level of uptake among small businesses to this number early on then there is the chance that we will just have an extra identifier that is not properly integrated into existing Government systems. And finally the view from the Chartered Accountants Australia and New Zealand that the benefits for business may be overstated is not something that is lost on this side of the House. The Better Public Services target that the Government has set for itself around small business is what? It is reducing the cost of compliance and by compliance it simply means form-filling when it comes to small businesses’ interface with Government. If you look for instance at the cost of a business registering in New Zealand that is a pretty nominal cost—it is pretty small. The Government has not set itself an ambitious target when it comes to genuinely helping small business. It could start by improving provisional tax it could follow the New Zealand Institute of Chartered Accountants’ policy—there is so much more that it could have done.SIMON O’CONNOR (National—Tāmaki): I think we have to begin simply by reminding the member who has just sat down Jacinda Ardern that this is actually the New Zealand Business Number Bill; this is not actually the “Small Business Number Bill”. This is something that actually those on the select committee who processed this would understand from the outset. I have to say though that it is particularly good. It is particularly good and unfortunately I do not have the exact number of questions that have been asked in the House around small business but it is actually really good to—I believe Jacinda Ardern may be the member from the Opposition who speaks on small business. We are not sure. She has not stood up and answered or responded to any questions but I just remind her as a member of the Labour Party that this is the New Zealand Business Number Bill. It does obviously apply to small businesses. It also applies to the larger ones and I think having sat on the Commerce Committee throughout the discussions on this it has been welcomed and well received. Naturally in any process there are points of feedback and I think if you read the select committee report it is clear that there are some elements that we discussed and as a committee came to a conclusion around.This bill has been welcomed. I was out just tonight talking with people from within the airline industry—so obviously not small businesses but significant. They can see the benefits of this. I am also very conscious within my own electorate that small businesses are welcoming this. In fact when I think of the fine electorate of Tāmaki the likes of a new superette within the Stonefields community has been set up. There are some local businesses around—well actually there are far too many to name so I had better be careful here of making sure I do not miss anyone out. The long and the short is that small businesses within my own electorate—and it goes across the country I am sure—welcome any initiative that enables them and us as a community to engage more easily and readily with Government. It makes perfect sense.We hear remonstrations from the other side that it is just noise—a little bit in fact like the points earlier around taxation and so forth from the other side that it is just noise. This is one of the Business Growth Agenda initiatives. It is one of the targets that Minister Joyce and others have set out. Like so many things this Government has done we have achieved that. I think the committee has worked incredibly hard to bring it to this position.I am not going to go through all the detail. I think those who are interested and who are following this know that the initiative itself is positive it is good. How can there be any complaints about making business engagement easier right across the sector between businesses themselves—small or large—or between Government and its agencies? So I commend this bill to the House. I look forward to it progressing swiftly. What more can be said?JAMES SHAW (Co-Leader—Green): It is a pleasure to rise and take a call on behalf of the Green Party in relation to the New Zealand Business Number Bill. It is quite a pleasure to come back to this bill after some time; when I was on the Commerce Committee about a year ago is when this first got introduced to the House. We have supported this bill the whole way through its process. I think it is really important.There are a number of concerns about the implementation of how business numbers will be rolled out. There are a number of concerns: for example the previous speaker from the Labour Party Jacinda Ardern raised concerns about the exemptions. There are some concerns about the costs that will be imposed in the short term and whether we have created a structure so that we can soak up those costs to make sure that they are not onerous. There are obviously some outstanding privacy concerns which you have to balance against the ability to hunt down fraud and so on. But none of those concerns would deter us from supporting this as an initiative. I think it is really important to support the intention of the bill which is to make things simpler for businesses and trading enterprises.The last few speakers have spoken in particular about small businesses and the advantages that they may gain from having essentially lower transaction costs with Government through use of a business number. But I want to also pick up on some of the other forms of trading enterprise. This kind of system already exists for limited liability companies in New Zealand—a particular type of company—and of course what we are doing here is essentially extending out an existing programme or a similar programme to other forms of trading enterprise.Of course in New Zealand there are tens of thousands if not hundreds of thousands of trading enterprises that you would not normally think of as businesses as trading enterprises: non-profit organisations some of which trade; a lot of charity shops; people with online presences; social enterprises; organisations that are subsidising non-profit work using commercial models; and so on. All of those will now have access to business numbers through this kind of system. We think that that is really good to start treating different types of trading enterprise in the same way that we have been already treating your standard meat-and-potatoes limited liability company.We do note that there are some concerns about privacy and we have been seeking reassurances during the course of the bill that those go through. I want to acknowledge that there is still some discomfort that having this kind of system in place may enable Government agencies to essentially go into places and get information that they should not normally be getting.Again we do not feel that the level of risk there is so high that it would deter us from supporting this bill but I think it is important that as this gets implemented we keep an eye on that that we make sure any complaints or concerns are addressed and that if there are those sorts of complaints we do take notice of them. And of course if there are mistakes we then learn from those mistakes and we improve the implementation as we go forward.One of the concerns that we want to keep an eye on of course is whom this is for. Sometimes Government will launch an initiative and say that this is to make things easier for business or for the public sector or for the community sector or whomever and then what happens in actuality is it ends up being for the convenience of Government rather than the group that is actually using it.Again I think that in its early days as we start implementation here it is really important for us to be very highly tuned to not just the rate of pick-up but the quality of pick-up amongst the organisations that are supposed to be using this and to get a sense of whether this is actually delivering the value to small business and to other trading enterprises that we say it is—or is the value actually being delivered primarily to Government in the form of making it easier for Government?One of the specific concerns that I am really interested in is that in New Zealand there has been a rise in recent years of ghost companies—particularly small traders who set up shop run up accounts and bills with clients and with suppliers and then declare bankruptcy. They then close up shop open up again a few weeks later using a sort of vague nom de plume and essentially go back into the same type of activity without honouring their bills. One of the things that the New Zealand Business Number Bill may enable—and I think one of the opportunities that we have got—is an ability to start to keep track of what is essentially low-level business fraud.It has a huge economic cost. We know that there are hundreds of thousands of sole traders and tiny tiny little organisations in this country. The cost to them of trading with someone who is essentially fraudulent and who does not have an intention to honour their bills is huge.I get complaints about it all the time. As I am travelling the country and talking to businesses about what their concerns are one of the chief things that keeps coming up over and over again is the sense that people are being ripped off by dishonest traders who because they are able to get away with it are essentially just closing up shop when they want to. One of the things that this does is it gives us an opportunity to just start tracking dishonest traders a bit more. That is one of the reasons why I personally am quite keen on supporting this bill.This has not been set up here but one of the opportunities here is that—what this does is it gives Government a one-to-one relationship with pretty much every single trading organisation in the country. While it is not in the same way that you should have an Inland Revenue Department number and you should have a one-to-one relationship with the Government via inland revenue what this may enable is an opportunity for businesses to start offering aggregate services to huge swathes of tiny organisations. One of the bizarre outcomes of the economy that we have created of course is that if you work for a large corporate you probably have health insurance you probably have a company car you are able to access discounts—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.Debate interrupted.