Smith DamienDAMIEN SMITH (ACT): The Government has introduced this bill which allows them to consolidate the charging models for the Companies Office register. At the moment what is happening with the services costs for each register and how it's being cross-subsidised is actually unlawful and against the law. So ACT's view is that we will be supporting this bill to select committee to get to the bottom of how this should be done better and also how this bill which amends the Companies Act 1993 will help to regulate Companies Office activities. It's a package that we supported which will run alongside the Companies Office Registers Funding Validation Act 2022. So my understanding of this bill is it permanently puts in place charges made under the Companies Office registers which allows the Companies Office to manage the portfolio in collecting and administering fees. That's what I've interpreted the bill to be. And it makes legal any prevailing practice of using levies from large registries to fund small ones. The bill amends the Companies Act 1993 to create a new regulation-making power that will enable regulations to be made that impose levies on certain users of registers administered by the New Zealand Companies Office. The regulation-making power would expressly provide that the money collected in levies can be used to fund the registry system as a whole rather than on a register-by-register basis. The New Zealand Companies Office business unit of the Ministry of Business Innovation and Employment will administer the companies registry system. And as my colleagues in the National Party point out there are 16 different registers including entity registers the Companies Register occupational licences insolvency practitioners and other property services. The Companies Office also supports other statutory functions of the various registrars responsible for these registers and each register was established under separate legislation. So the legislation requires each register to be independently funded from fees charged to the users of the relevant register. This funding model was predicated on each register being operated separately. Over time the Companies Office has moved towards providing shared services to the registers. A unified approach to the register allowed the Companies Office to establish an organisational structure an operating model that produces economies of scale in the delivery of registry services and has the ability to leverage technological developments enabling registry services to be centralised and shared across registers.These changes have contributed to reduce costs to users. However it has also made it increasingly difficult to distinguish between the costs of providing the service for each register. In addition the fees charged in some smaller registers have not kept up with the costs of upgrading them. This shortfall has been met from surpluses that have been generated from fees collected under legislation governing other registers. This practice is not authorised by the legislation. The Companies Office's unauthorised funding practices have been addressed by the Companies Office Registers Funding Validation Act 2022—the Validation Act—by retrospectively validating the Companies Office charging and expenditure practices.This bill which forms a package with the Validation Act supports the Companies Office approach to running the corporate registry system by moving away from being entirely funded on a register-by-register basis as it is now. This bill we believe achieves this by amending the Companies Act 1993 to allow for regulations to be made for the Companies Office to charge its users levies as well as fees. The money collected in levies will be able to be used across different registers to fund the shared registry system and the bill provides that the levies will be set by regulations following consultation. It also sets out the purpose of the levy-making power which the Minister must have regard to in recommending to the Governor-General that regulations should be made by Order in Council. So the major area of change in this bill is to allow the register to charge levies as well as fees which go towards supporting all 16 registers listed in the newly added Schedule 14. The benefits and costs of the standard practice of using fees from all 16 registers is made legal and the main beneficiaries—theoretically entities on the smaller of the 16 registers are beneficiaries as this bill enables companies to be charged levies to help fund their registers. However the reality is that this is not currently the status quo. So in terms of cost theoretically entities on the Companies Register are paying the price as the bill enables companies to be charged levies to help fund the registers. However the reality is that this status quo—and we've already supported the Companies Office Register Funding Validation Act—needs to be brought in line. So we look forward to the Minister's commitment to allowing for submissions at the select committee and as part of the Finance and Expenditure Committee we'll be going through this thoroughly. ACT supports the bill on its first reading.