Andersen Ginny; Bayly AndrewHon GINNY ANDERSEN (Minister for Small Business): Thank you very much Mr Chair and thank you to members for those enlightening questions regarding the Business Payment Practices Bill. First of all I'd just quickly like to thank the Economic Development Science and Innovation Committee for their work on the bill. There were a number of changes made at select committee from members on both sides of the House and I think some good changes were made. Look in general I'll try and clump the questions. Timely payment is crucial for the financial health of any business and especially New Zealand small businesses. It can be the difference between making a pay round or not when payments are not made. I've heard from many small businesses that delays in receiving payments are really hurting their cash flow and that increases stress and it also inhibits their business growth. Xero does some really good research in this space and I would probably mention too that they view that larger companies in New Zealand use smaller businesses as a credit facility and this is unacceptable. That is the main underlying policy sort of framework if you want that underpins this bill; that we want that transparency available so that smaller businesses who do survive from week to week at times have that ability to choose who they wish to do business with. So the bill requires entities with more than $33 million in revenue and as the addition at select committee $10 million in third party expenditure to disclose information about their payment practices twice a year. And just to point out too that the Government needs to lead by example and so the bill will apply to Government entities just as much as the private sector. The key point I got from those questions was in relation to why the $33 million and what constitutes sort of a large firm why set the threshold at that point? Large firms are defined as all entities with greater than $33 million annual revenue. The revenue threshold is based on criteria for businesses considered to be large. According to the Financial Reporting Act 2013 the expenditure threshold ensures that the regime doesn't apply to firms that don't really have much purchasing power in the marketplace. This allows businesses to easily self-identify and applies to all corporate firms and so it's likely to capture market participants that dominate the industry. I'll just point out that the Australian threshold is higher I do acknowledge that. I think that reflects the fact that the businesses in Australia are bigger than those in New Zealand. If our threshold was set the same as Australia we would capture in the vicinity around about 600 businesses which would sort of undermine the whole purpose of the bill.ANDREW BAYLY (National—Port Waikato): Thanks Mr Chair. I just want to pick up on that commentary from the Minister on the bill and she made the assertion around larger business being at fault. But secondly—and probably the more important substantive issue which comes to the whole purpose of this bill—she made an anecdotal comment about a lot of smaller businesses suffering from late payment. What evidence has she actually seen to support the introduction of this bill? Because every business will say if they didn't get paid on time that will affect their cash flow and that is as obvious as night follows day or day follows night. Chlöe Swarbrick: Part 2 Part 2!ANDREW BAYLY: This is in reference to what she the Minister said Chlöe Swarbrick. So what actual evidence—because the Minister raised this issue—has she got that says by putting in place an arrangement such as laid down in this bill actually achieves the outcomes that she's desiring to achieve with this bill? She also mentioned in her speech about Australia and she will be a very much aware no doubt that Australia put in place this arrangement two years ago and they're now reviewing it—because in cases they've found out that even after putting in arrangements similar to what is proposed in this bill the outcome has actually led to slower payments from large businesses to smaller businesses in Australia. And that is why they're doing a formal review of it because they are now starting to wonder whether in fact this is actually the right way to go about achieving a better outcome. But we've slavishly picked up their—what appears to be an overseas example being two years out of date and shoved it in at the very moment when they're reviewing how it started to work and by reference also she's quoted—CHAIRPERSON (Greg O'Connor): Mr Bayly you may have missed the fact we actually only on Part 1 here so the ability to make wide-ranging speeches is rather limited. So please confine your comments to Part 1. I accept that you're actually reflecting on the Minister's comments. However you have gone too wide—back to Part 1 please.ANDREW BAYLY: OK. Thank you Mr Chair. Well I just hope the Minister will respond to that.OK on a very specific point my good colleague Mr Penk has been talking about entities. One of the big things that concerned us about this arrangement is that under entity means" clause 5(d) the incorporation or the capture is probably a better word of "a society or branch of a society registered through deemed to be registered under the Friendly Societies and Credit Unions Act 1982". Can the Minister just tell me why it was deemed so necessary that we want to capture friendly societies under this bill? Because if we're talking about normal trading arrangements and that's what the Economic Development Science and Innovation Committee actually focused on because that was meant to be the intent of it why on earth should a society or branch of a friendly society be captured? It would be very useful if I could have the Minister's response on that."