Copeland Gordon: Business Law Reform Bill — First Reading 
Copeland Gordon: Business Law Reform Bill — First Reading 
[Volume:632;Page:4247] 
GORDON COPELAND (United Future) 
: 
 It is really quite a pleasure to follow in the House tonight Dr Pita Sharples of the Maori Party who has just made a very worthwhile contribution to this debate on the Business Law Reform Bill. I want to take this opportunity to compliment Dr Sharples on the tremendous leadership he has recently displayed over the Kahui twins disaster. I have not had a chance to pass these remarks on to him yet so I want to sincerely compliment him on the leadership he has shown in that regard. 
I also think it is quite exciting to think of the statistic of Maori being the third most entrepreneurial people on this planet. That is a tremendous sign of hope not only for Maori themselves but also for New Zealand society because of course Maori will make up an increasing proportion of our society as the years go by and our success as a nation will therefore increasingly depend on Maori themselves being successful. I wish them all the very best in that regard. 
I say to Dr Sharples that one United Future policy may interest his party and I suggest he might join us in promoting it. We have a policy of a tax holiday for new business start-ups. Dr Sharples mentioned the statistic for the number of Maori who start businesses and the number who do not quite make the grade. Analysis shows that one of the reasons for that is that a lot of businesses fall over in their second year. The reason they fall over is that in their first year they pay no tax—they do not have to—and in the second year they have to pay provisional tax for the first year plus tax for the second year. It is that combined— 
Hon Member 
: Terminal. 
GORDON COPELAND 
: That is right—terminal tax plus provisional tax. That combination of two tax bills in the second year means that a lot of small businesses run out of cash and go under. So we have a policy response that says we will give such businesses a conditional tax holiday for the first 2 years of their existence. I think the House should look at that—and indeed the Government should look at that if it wants to give a spurt to new business start-ups. When I say “conditional” I mean that the businesses will still have to file a tax return and— 
Hon Maurice Williamson 
: Which part of the bill is the member speaking to? 
GORDON COPELAND 
: I am speaking to business law reform in general at this point and I think that that is a very important part of it. 
Hon Maurice Williamson 
: That’s in general—which part of the bill? 
GORDON COPELAND 
: I see that the member’s colleague Pansy Wong is making agreeable noises. If there is a bit of cross-party support for such an initiative then maybe we should have a member’s bill and bring it to the House for debate. 
I just wanted to say those things about Maori business start-ups because I think it is important that they succeed. I want to mention also that since I entered Parliament in 2002 I have been something of a champion of friendly societies and credit unions. Representatives of those institutions have been to see me on a number of occasions and I have been very well aware of the fact that they have been working with the Government for some years now to see the changes made that this bill is at last actioning. I believe that friendly societies and credit unions have a very important role to play in relation to New Zealand business activity. Most of the time we think of them as a way in which people who cannot afford to buy their own house or borrow money actually get a chance to start buying their first house—and that itself is a very good outcome. 
It is important I think to broaden the scope of those institutions modernise their rules and allow them more flexibility in terms of membership because I believe that many New Zealanders will find belonging to a credit union very useful. It is a very good way of getting money for a new home or in fact to start up a business. So I think credit unions and friendly societies have an important role to play and I welcome the changes this bill makes in that regard. 
I also welcome the changes to the Financial Reporting Act 1993 and the Companies Act 1993 in terms of reducing compliance costs for companies. The survey of OECD nations already says that New Zealand is the easiest place on the globe—at least among OECD nations; I do not know about Third World countries—to start a company. To get a company going is a very positive thing. One of the defects noted was that businesses had to wait so long for their GST number but I understand that that has now been addressed by the Inland Revenue Department. 
I think that that is important because unless I am wrong it is possible that when we have the business tax review—which I know will be announced to New Zealanders through a discussion document in the very near future—we may see a bit of a rush to incorporate as companies. A lot of New Zealand businesses run at the moment as sole proprietorships. If we lower the company tax rate then they will have an incentive to incorporate as companies in order basically to defer taxation. I think that that will be a very good thing because such businesses will have a direct incentive to reinvest profits in the business and the reinvestment of profits back into the business is believe you me a critical success factor in having a small business grow into a medium-sized business and a medium-sized business grow into a larger business that can get involved in exports. It is very difficult for a small business to take on the world; one needs some critical mass to do that. So I think that those changes will be very good and that we should make it very easy indeed for businesses to incorporate as companies. 
With those few remarks I am pleased to signal United Future’s support for the bill. As members all know omnibus bills come into the House with a consensus across parties. That does not mean to say that they are not important. The matters this bill involves are certainly important to the New Zealand business community and United Future welcomes their introduction to the House.