Clark David: Accounting Infrastructure Reform Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Accounting Infrastructure Reform Bill — In Committee[Sitting date: 28 October 2014. Volume:701;Page:312. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):Part 1 of the Accounting Infrastructure Reform Bill contains the real meat. It is the part that lays out the arrangements for combining the New Zealand Institute of Chartered Accountants with its Australian counterpart or perhaps it should be put the other way round. This move opens up both opportunities and risks as one would expect. The opening up of audit activities to trans-Tasman competition effectively will ensure that the standards are fair across things and we can imagine that there is going to be an advantage in scale for some auditors. Often where there are big jobs New Zealand firms miss out in favour of those Australian firms that are geared up have an office in Sydney and can service the greater Australasian area for overseas clients. However New Zealand is also a nimble economy and often competitive. We have people here who are ingenious and can create opportunities so we would be hoping in supporting this bill that those risks of trans-Tasman dominance that we have seen in the banking sector would not take hold in the audit sector in the same way and that instead we would see some innovative New Zealand firms bidding for and picking up audit work through being competitive professional and generally good at the work they do.The provisions in the bill that we like are about simplifying things and making the system more transparent. That has got to be a good thing. Transparency is incredibly important in our market place. Quality auditing and the ability to have a look through companies are the kinds of things that make for a competitive and effective market and one that services the needs of New Zealanders and people offshore for the provision of services that assist with growing an economy. We will be supporting the bill and we will be lending our voice to it getting through this Parliament non-controversially. Those in the area who submitted to the Commerce Committee pointed out those risks that we have already discussed and the opportunities that lie there. The Institute of Chartered Accountants is not fighting this so we are prepared to take its lead in seeing less red tape across the Tasman and we will be waiting to see what happens.We do hope that New Zealand’s interests will be protected too in the setting of standards. We have seen in areas like housing regulations that where red tape is removed solutions that are regarded as standard across Australasia can give more weight in the regulations to Australasian climatic conditions than to New Zealand climatic conditions. So in the audit sector as we know issues that arise in Australia are likely to dominate in an Australasian environment. We may see regulations or the expectation on those auditors that reflect the situation the conflicts the risks and so on that arise in Australia more nearly more closely and more loudly than they reflect the risks that arise in New Zealand. So there we are putting a heavy burden of proof on the New Zealand companies to be innovative to be professional to put their case when it comes to setting standards for audit and to carry out those audits in a way that is both compliant and cost-effective.I want to take a second to congratulate the Minister in the chair the Hon Paul Goldsmith on his recent elevation. He has been alongside this bill as it went through the select committee if my memory serves me correctly and is now in the ministerial chair shepherding it through the Committee. He will correct me I am sure if my memory is inaccurate on this. He is a kind man. [Interruption] Well I did support his bid to become the chair of the Finance and Expenditure Committee and I have seen him then rise rapidly through the ranks. We may differ though heavily on our particular view of the world but I suspect we will both agree that properly regulated markets—though we may disagree on what constitutes a properly regulated market—are important to New Zealand’s future success in the international commercial environment.The proposal of the Institute of Chartered Accountants has been accepted. Some of its other proposals which we think could have been—