Andersen GinnySECONDHAND DEALERS AND PAWNBROKERS (ELECTRONIC RECORDS) AMENDMENT BILLFirst ReadingDebate resumed from 30 June.GINNY ANDERSEN (Labour—Hutt South): Thank you very much Mr Speaker. Thank you very much for the opportunity to speak on this bill in the name of Andrew Bayly the Secondhand Dealers and Pawnbrokers (Electronic Records) Amendment Bill. What this bill intends to do just to remind those members is it seeks to amend the 2004 piece of legislation the Secondhand Dealers and Pawnbrokers Act to require licensed pawnbrokers second-hand dealers and also internet auction providers such as TradeMe to keep a supply of records in an electronically readable format which is able to be used for police computers and able to be used for law enforcement to track and trace stolen goods. While this change is aimed at making it much easier for police to do their jobs in order to hold those accountable who have taken items unlawfully and attempted to sell them this is also a bit of an issue there where there is good intent—I guess the words are right. There is good intent but Labour is not supporting this bill at first reading due to the concerns about the number of unintended consequences relating in particular to compliance costs. That is where it is interesting. We often have members opposite complaining about compliance costs and the ongoing cost to small-business owners particularly in a post-COVID environment where there are a number of difficulties for small businesses right across New Zealand. So some of the issues raised with this good idea come to the implementation and how small businesses would be expected or forced to change accounting methods in order to adapt to this requirement to change into an electronic system. So while Labour backs police to keep our community safe and—this is evident from the $450 million that has been invested in front-line policing services and our increasing our front-line response to up to 14000 police—while we support investing in law enforcement and our justice system we do not see this as able to be done in a way that is effective in achieving its intended outcome. So the bill's general policy statement has a couple of problems. It's at this point I'd like to unpick some of the issues to look at how in the future we might be able to address some of the problems this bill has raised. How a business is expected to be forced to change its accounting methods is critical but given the vast majority of those small businesses—and everyone will have one in their electorate: a corner store that sells second-hand goods or is a pawnbroker and takes goods from people and sells them on their behalf. The accounting methods in those stores will be hugely variant depending on where you go in the country and depending on the size of the business and quite often those businesses are owner-operated. They are small-business people who are often semi-retired or running a shop and able to run—and the ones in my electorate I can think of don't even use EFTPOS in some instances. So wanting to introduce a nationally standardised electronically monitored system of tracking and tracing second-hand goods is admirable in its ambitions but in its practicality is questionable. These general compliance costs are exacerbated by the specific way that the bill is actually worded in regards to its record-keeping requirements. The bill's wording requires that the electronic record—and I quote—is electronically readable and usable by Police computers". That's where it's quite unclear what it's trying to do. Is it trying to talk to the National Intelligence Application which is the national database that police use for intelligence or is it for other purposes? So it is quite unclear what is intended by those "electronically readable and usable by Police computers" words in the general policy statement.Secondly I would like to point out the issue with the wording of this requirement—that it may prevent small businesses from using some basic off-the-shelf and no doubt probably far more affordable record-keeping software because it may not be easily readable by those police computers. A lot of those small-business owners are using products that are able to be either downloaded for a small fee or purchased from a local electronic store so the question is about how small businesses would be able to use this without forcing more expensive solutions that have compliance cost implications for those small-business owners. Although police currently have a Serial Number Automated Checker which is known as SNAC—and that is in Counties Manukau—this is a system that's not yet been rolled out nationally more widely through New Zealand. So it's difficult to know exactly what the requirements would be of the wording in the bill in order for these businesses around the country to come on board and to leave the door open—sometimes these situations would have unforeseen or unintended consequences. Similarly there are also some concerns on this side of the House in relation to the requirements of the penalties in this regime and how they would be implemented and how implementing those penalties would have an impact upon small businesses. The way the bill is currently worded is that if police change their systems or have a new requirement for what is specified in the bill for the information to be usable by police and police computers businesses affected by these regulations would have to immediately update their systems or potentially be subject to an offence which is specified to up to $10000 as a fine. The word is "Police usable" and how that would have an impact directly upon small-business owners again is unclear in this instance. That sort of clarity would really need to be spelt out to the letter in order to make sure small-business owners are clear on what is actually required of them to comply with the law. This may again have unforeseen circumstances and very immediate costs on them and that kind of cost could be seen as punishing them with a fine and drive a small business out of existence if they're not complying. So that again has really caused a significant level of doubt in terms of how the practical implementation of this bill would operate. We also have some concerns about how the police themselves would operate in this. They would need to update all computer systems around the country and would face potentially quite significant costs to do so and roll out a nationally compliant system across New Zealand. This problem is exacerbated by the bill's three-month commencement date. Having to roll out a nationally compliant system in just three months is practicably not achievable as it would take a significant amount of work to get that under way. We think it's likely that regulated traders would transition gradually towards digital record-keeping and that we should encourage that to happen. But given the advantages we support police engaging as appropriate to improve how they would engage with businesses as they have done as I've mentioned in Counties Manukau. It was developed with the Serial Number Automated Checker system that's under way there. We do not believe that the blunt instrument of this bill is the best way to go about dealing with the problem that has quite rightly been identified by Andrew Bayly in this member's bill. What this bill does is try to address the entire situation in one go and really bites off more than it can swallow. So while the bill has got good intentions we think that systems in place already need to be explored further and we need to give far greater consideration to the implications and the unintended consequences for small-business owners to make sure that those changes can be put in place into small businesses before there's a legislative requirement with hefty penalties trucking on down the road with three months for implementation. In general I would like to conclude by saying that yes our police do a fantastic job at working around the clock to make sure that stolen items are rightly returned to their owners when that is needed to be done and that there are good systems in place of checking when items have been provided to second-hand dealers. We would like to commend the member on the good intent of his bill but the solution proposed has unintended consequences and is not practically deliverable to meet the problem which he has identified. So I wish to state that we will not be supporting this bill further. Thank you."