Dalziel Lianne: Third Readings 
Dalziel Lianne: Third Readings 
[Volume:635;Page:6537] 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Companies Amendment Bill (No 2) the Dumping and Countervailing Duties Amendment Bill the Financial Reporting Amendment Bill the Friendly Societies and Credit Unions Amendment Bill and the Insurance Companies' Deposits Amendment Bill be now read a third time 
. These bills started their life in this House as the Business Law Reform Bill. They are part of a programme of reform designed to give effect to the Government’s overall objectives to clarify and update the intended purpose of various statutory provisions to remove unnecessary compliance costs—something we all welcome in this House—and to ensure consistency between different legislative requirements. 
The Government wants the law affecting the operation of business to be clear efficient and effective. This legislation represents a stage in the incremental improvement of existing business laws to achieve these goals. The Business Law Reform Bill process allows an exception to the general prohibition on omnibus bills and these are allowed to proceed through the agreement of the Business Committee. The Government is therefore grateful to all parties for their support of this process otherwise I would have had to introduce five separate bills taking up considerable time and effort of the House the select committee and the officials. 
After some of the comments I heard though during the select committee process I should make the point that I did not say that this bill was a matter of technical amendments. I checked my first reading speech and in fact I identified that I was really pleased that I had the opportunity to deal with significant policy issues as well as technical amendments in a single bill. I think it is a process that we are all very supportive of. Nothing in this process prevents matters of controversy from being dealt with by way of a Business Law Reform Bill. It is up to the parties whether such a bill can be introduced and proceed. 
Did some controversy arise during the hearing of the submissions? Yes. Is that fatal to the passage of those provisions? No. If this were a Statutes Amendment Bill then it would be fatal to the provision proceeding although the reality is that it would not have got into a Statutes Amendment Bill in the first place. I would not need to use a Business Law Reform Bill if all provisions qualified for inclusion in a Statutes Law Reform Bill. 
An example raised at the select committee was the submission of the captive insurers who indicated that the bill would have wider application than was intended. However the legislation was only ever intended to cover companies that did not offer insurance in New Zealand. If they offered insurance in New Zealand they were not to be caught by the provisions of the legislation. They were not to use the word “insurance” in the company name or to hold out that it was a New Zealand insurer when it was not. This of course was designed to protect New Zealand’s reputation internationally. We have some companies that have registered themselves with a company name that includes “insurance” but they do not sell insurance in New Zealand. They are not participants in the insurance industry in any way shape or form. The reason the word “insurance” has been put into the company name is so that they can hold themselves out internationally to be covered by our regulatory enforcement system and they are not because they do not sell insurance. So the whole purpose of referring bills to a select committee is to tidy up any wording that does not achieve the objective. I think people agreed that in this particular case the intention of the Government was one that they upheld. 
The chair of the committee though in the Committee stage seemed to think that if a submitter disagreed with the wording or the submission was in opposition to the changes proposed then this is not suitable for a Business Law Reform Bill. That is not the case and I hope that she revisits her attitude before we introduce another one as I doubt that the National Party would want to oppose business law reform per se. 
The issue that created concern at the select committee was the opposition of the Accounting Standards Review Board to the exemption-making powers within the bill. Did I know that the Accounting Standards Review Board was opposed to the exemption-making power before I introduced the bill? No I did not. I was briefed before the board made its submission to the select committee so I was aware of its opposition to it at that point. But as I said during the Committee stage I met with the chair of the review board after he had made the submission and we discussed the concerns that he had in some detail. I took advice and essentially I addressed a Supplementary Order Paper in the Committee stage to deal with some but not all of the concerns that had been raised. 
There were two significant changes by way of Supplementary Order Paper. First the power to make exemptions will be limited to classes of persons; exemptions will not be able to be made for individual reporting entities. This will deal with concerns that the focus may have been too much on the interests of the entity not the wider public interest. Secondly the main criterion for making decisions will be changed from “exceptional circumstances” to a decision as to whether compliance would result in financial statements that are misleading in a material way. The criterion is more specifically focused on the problem at issue and I believe sets a much higher threshold. This change will not affect the fact that the exemption power is to be used only in exceptionally rare circumstances when an international financial reporting standard is not fully relevant to New Zealand’s circumstances. 
There were other comments made by the chair of the select committee during the Committee stage that reflect I believe an inadequate understanding of the business law reform process. We were castigated for the reporting requirements of foreign companies when the member’s own party could have addressed that issue in any one of the 9 years it was in Government in the 1990s—or indeed in the years in the early 1980s because the reporting requirements that she referred to and which this Government has addressed have been around for a very long time. 
The changes to the Financial Reporting Act 1993 are aimed at generally improving the workability of the financial reporting system and in particular remove excessive compliance requirements on some small companies and many overseas companies. They will also improve enforcement by introducing an infringement notice system for company directors who fail to file their company’s financial statements with the Registrar of Companies by the due date. 
Proposed changes to the Companies Act 1993 further improve enforcement by extending the management and director-banning provisions to persons who have been banned in certain overseas jurisdictions. This delivers on another aspect of the single economic market agenda with Australia. The legislation further seeks to improve the efficiency of the Friendly Societies and Credit Unions Act 1982 and gives credit unions more room to grow their business without introducing unmanageable risks to their members. In addition the field of membership of a credit union will be broadened by extending membership to charities and incorporated societies affiliated with the common membership criteria of the union. The bill also gives credit unions and their associations more flexibility on administrative matters such as the ability to determine the minimum deposit-holding of each member and removing compliance costs when seeking to broaden their service base. 
Changes to the Dumping and Countervailing Duties Act 1988 will allow the Minister of Commerce to specify the date from which new and reassessed rates of anti-dumping and countervailing anti-subsidy duty will apply. The bill will also exclude the Christmas break from the statutory time frame for the completion of dumping and subsidy investigations. 
All in all these bills improve the regulatory environment for business and reduce compliance costs especially for small to medium sized enterprises in terms of financial reporting and I welcome that both with my hat as Minister of Commerce and as Minister for Small Business. I am very grateful to officials who provided good support to the select committee and indeed to all members of the select committee for the work they did. I commend the bills to the House.