Clark David: New Zealand Business Number Bill — First ReadingText is incorporated into the Bound VolumeClark David: New Zealand Business Number Bill — First Reading[Sitting date: 05 May 2015. Volume:705;Page:3189. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): The aims of this bill are indeed laudable. As they are outlined in the bill itself they involve an attempt to achieve the Government’s objectives as recorded in its objective No. 9 which is to reduce by 25 percent the cost of dealing with the Government. A lot of businesses do have a significant cost involved in dealing with the Government particularly those businesses that have only one or two employees. Some spend up to 20 percent of their turnover on tax compliance. Red tape is of course the No. 1 complaint that a member of Parliament comes across when asking what it is like for businesses on a day-to-day basis dealing with the Government.I think it is a sad indictment on this Government’s progress that Steven Joyce could give that speech describing a siloed Government environment and the handbrake on economic growth that that represents. He gave it unashamedly without blinking. He tried to say that this is something that needs addressing. Well it is but somewhere along the line this Government needs to stand up and own the fact that 7 years have passed and the situation has not improved.Our problem with this bill is that it is at risk of adding just another number. This number risks adding an additional burden of compliance to the systems already in place for business and the compliance costs are already quantified in the regulatory impact statement that we have sitting here on the Table. For those who are watching at home—and I have met a few people over the course of the last week who do watch Parliament TV; I am reliably informed they are out there—we have been presented with a 38-page regulatory impact statement. It is common for these to be about four or five pages long. When you get a 38-page one alarm bells start going off. The department concerned is worried that this idea has a number of fish-hooks in it that have not properly been considered by the Government. Then it has a follow-up regulatory impact statement of nine pages just in case it did not get them all in the first one. This department the Ministry of Business Innovation and Employment is concerned that we have a ministry here that is being forced to take up an idea of the Minister’s that is a little bit half-baked and that comes out in the regulatory impact statement we have in front of us.So what kinds of concerns do the officials have? Primarily they are concerned that there is really no evidence that this kind of approach has worked overseas so they do not have a basis upon which to make a solid judgment about whether it would be good or whether it would not be good. The second set of concerns revolves around the uptake of the number the speed of uptake and the wait-and-see approach that seems to be put in place by the Government which says: “Well maybe agencies will take it up. Maybe businesses will take it up. Let’s see what happens.” So that is the crux of the concerns of business around it. We have seen that this is a Government slow to really act to reduce red tape for business and in fact has increased red tape in many many many of the bills that it has put through the House.A couple of examples spring to mind one being the child support tax changes that now require employers to collect overdue tax arrears through their payment to their employees giving them information about their employees they may not otherwise have had potentially opening them up to disputes with their employees and so on. That kind of red tape has not been thought about when the Government has rushed through the law. Likewise the paper boy and girl tax—the compliance system there and taxation requirements that the Government pushed through. These kinds of thoughtless changes that have gone through have a very real cost for the people who risk their shirt every day in small business throughout New Zealand.The Labour Party is concerned that we should have an innovative small business sector—one that is growing and one that has the opportunity to generate wealth for New Zealand—because our future prosperity depends upon emerging industries that are not bogged down in compliance that has been put in place by the Government unnecessarily. So Labour recognises the need to support businesses by cutting red tape where possible and reducing the cost of business transactions for small businesses sole traders partnerships and trusts. If this is what the bill actually achieves we will support it right the way through the House.At this stage however we are prepared to support it only to the select committee because there is so much lack of clarity around the bill and how it will be implemented and so many fish-hooks that we want to receive the submissions at the select committee to see how business interprets the lie of the land and whether businesses when they have a good look at the law as it is proposed think that it really will make a difference for businesses.The biggest initiative of course that the Government could undertake would be tax simplification. It has been done overseas. It has been done in Australia it has been done in the UK and where you do have businesses spending up to 20 percent of their turnover on tax compliance it would be a big win if the Government undertook tax simplification. Again where small business is concerned it does not seem to have been very quick off the mark there—it seemed quicker to meet the needs and concerns of big business.Well Labour is on the side and always has been of the person who is struggling to get ahead who is trying to make their way in the world and the small-business people of this world are the ones we have in mind. That is why we are worried about the additional compliance that is proposed here and the additional compliance I have already mentioned that this Government has placed on small business throughout its time in Government.The concern about the siloed Government approach that Steven Joyce raised is raised in the paper by officials—the 38-page list of concerns that they have put in front of the House—as are the privacy concerns that the bill presents. Identity theft in the US has been a problem with similar systems and we see that this is something that concerns also the officials who are advising on the bill. I have no doubt—no doubt at all in my mind—that my colleague Clare Curran will have a little more to say about the Government’s track record on privacy issues and the risks that are presented by identity theft. That is her specialist area and I am sure she will tell us a little more about that in her contribution.The repeated registration processes at the moment in dealing with the Government cost New Zealand businesses up to $34 million in lost productivity every year says the Ministry of Business Innovation and Employment estimate in the papers we have been supplied with. The ministry’s concern is that this unique identifier will not become a unique identifier because of the way it is implemented but that instead it will join the list of other business numbers produced by the Government that are part of this constant churn of reregistration of working out which number to deal with when you are dealing with the Government rather than being the simple system that ought to be in place. Again it says: “Maintaining core business data with government agencies costs businesses up to $26 million each year; between 50 and 60 percent of business details are replicated on over 250 government forms.” These are shocking numbers. This is the shocking reality of a Government that seems to be out of ideas. It has been very slow to move on these issues and here again is moving with a half-baked solution.I think that perhaps one of the most telling paragraphs in this regulatory impact statement is paragraph 16 in here. It states: “The NZBN has already been allocated to companies in New Zealand. Ministers would like to extend the NZBN to all businesses to enable a digitally-based economic infrastructure.” That is all well and good but then it says: “Our options are therefore constrained to consideration of the best way to extend the NZBN to all businesses.” Therein lies the rub. The officials have recognised that despite their 38 pages and further nine pages of concerns Ministers are determined to press ahead with this regardless of the consequences. They want to be seen to be doing something about making business easier and business compliance easier but the real test will be when the rubber hits the road and I am sure we will hear from businesses when they present to the select committee on whether this will really work for them.This is a Government of course that came in strong on promises but seems to be becoming stronger and stronger on excuses. It is a Government that seems to be tired and out of ideas. Now we have some half-baked ones being thrown up. We hope they can be knocked into shape in the select committee so that they really do make a difference for business in New Zealand because we do need our small business sector to prosper for the good of all New Zealand. We will support this bill to the select committee and we will see what comes of it there. Labour will be concerned to see that it really does make life simpler for those people who risk their shirt every day in order to better their own lot and to better the lot of the families around them and the people they care about—the New Zealand business people. Thank you very much.