Faafoi Kris: Companies Amendment Bill (No 4) Limited Partnerships Amendment Bill (No 2) — Third ReadingsText is incorporated into the Bound VolumeFaafoi Kris: Companies Amendment Bill (No 4) Limited Partnerships Amendment Bill (No 2) — Third Readings[Sitting date: 24 June 2014. Volume:699;Page:18846. Text is incorporated into the Bound Volume.]KRIS FAAFOI (Labour—Mana):I take a call in the third readings of what began life as the Companies and Limited Partnerships Amendment Bill. I think it is pretty fair to say that these bills have broad support across the House but they do not go through these third readings without some sense of criticism from this side of the House. That has been well traversed by a number of speakers who have come before me.New Zealand does have a very good reputation in terms of being able to come here and do business. I think our reputation in business is probably equalled by our environmental reputation. People look at New Zealand and think that it is a pretty fair place and easy place to carry out work but that reputation has come about because of the very stringent attention of this House around corporate governance. I think it was the Minister of Justice who said that it was for 8 years that we have held the first—Hon Judith Collins: 8 years.KRIS FAAFOI: —8 years for the first—Hon Judith Collins: In a row—8 years in a row.KRIS FAAFOI: Eight in a row? Thank you very much for confirming that. So well before the term of this Government New Zealand was seen as the best place to do business. But there has been some concern recently about that potentially slipping back with stories around money-laundering as we have heard before starting to creep into media nationally and internationally. I think that as people have seen New Zealand as a good place to do business that is when the crooks come in and try to use our good reputation to start up a business and to use it for purposes that we would prefer they did not. So there has been some concern for some time and it is good that this legislation is going to be passed on 24 June.But probably one of the more interesting parts of the legislation is the last page where it gives us the dates as to when this legislation was introduced and when it had its first reading. I think someone else may have pointed out that this legislation was introduced to the House on 13 October 2011 and got its first reading on 24 July 2012. I think as Andrew Williams pointed out earlier on in his speech that before this legislation was introduced to the House it would have gone through Cabinet probably some 4 years ago and we have only got to the stage now—on 24 June just months away from the next general election—that this Government has seen it as a priority to progress this piece of legislation. It was just last week that we went through the Committee stage of this debate and the select committee the very hard-working Commerce Committee which I sit on had reported this legislation back to the House some time ago. This legislation has languished on the Order Paper for some time.You have to ask the question about the ability of this Government to walk the walk when it comes to talking tough on cracking down on white-collar crime because it has been big on talking making sure that we can strengthen regulation around business and making sure we can cut red tape around business. But this legislation as I say was introduced I think from my recollection before the last general election and has only been forwarded progressed in this House just before we break for the next general election. So you do have to ask the question about how seriously this Government has taken this legislation. As I say it is a good piece of legislation but why has it taken 3 years for it to get here? The Government would have been forming the legislation well before that for a couple of years so it may have been this Government’s intention to pass this legislation at the beginning of its first term in late 2008 but some 5½ years later we are only now really seeing it come to fruition.It is legislation that is much needed again around that international reputation that we have here in New Zealand. I understand that the World Bank and the International Finance Corporation rate New Zealand as the easiest place out of 183 countries in which to start a business so we do have a reputation to protect. But there have been incidents recently and I have got one here in front of me as an instance of people coming from overseas and using New Zealand businesses as shell companies to basically run frauds. There was a New Zealand - registered company that was used to run a Ponzi scheme which is the flavour of the moment to the tune of US$25 million by an American chief executive and an owner who are now facing up to 15½ years’ jail in the United States after they pleaded guilty to that. This is a very real issue. There are people looking at New Zealand seeing that it is a good place to do business and using the protection of that reputation to commit crimes. That was quite a large one—one of US$25 million. So as I say there has been plenty of local and international media attention.We do need to make sure that we are right on top of this and are not leaving any wriggle room for those crooks out there to take advantage of the good name that New Zealand has. Again that takes me back to the point as to why this Minister of Commerce has taken so long to progress this legislation. If this legislation had been passed in maybe the Government’s first term when it was thinking about this under Minister Simon Power then we might not have had the instance that I have just talked about where that Ponzi scheme was able to be run out of a New Zealand company. Also as other speakers have said since this Government has come into power and has had this idea and this legislation on the cards—but again it has languished—in 2012 New Zealand along with Russia I should add was struck off the European Union’s banking white list because of the country’s weak money-laundering and terrorism finance and controls. That is obviously not a good look for us. We want to make sure that that reputation is upheld but it is not a good look for New Zealand to be in the company of Russia in being struck off that very prestigious EU list.Can I just talk directly to the legislation because it is legislation that will take action that this side of the House is going to support. Certainly on this side of the House one of the things that we are happy with is that this legislation will give new powers to the Registrar of Companies to investigate and deal with companies that do not comply with the Companies Act. I think one of the good things around that is that this includes the power to flag companies on the register that are under investigation. That is something that has not existed. We do think that is a good idea because it will put those on red watch to make sure that if we do have suspicions about people using New Zealand companies as shell companies to undertake illegal activity those companies will be flagged. It will also allow the registrar to remove companies from the register if they do not provide accurate information or they persistently fail to comply with the Act. My understanding through the select committee process is that that was one of the flags that the registrar identified as a trademark of people who potentially could use those companies as a shell company to get ill-gotten gains.I realise that I have got just a little bit of time left but I just did want to stress the point about the amount of time that this has taken to progress. Again to go back to the last page of the legislation this legislation was introduced on 13 October 2011 some time ago and got its first reading and referral to the very hard-working Commerce Committee on 24 July 2012. It is nearly 2 years ago that this was referred to the select committee. I question the Government’s rhetoric around making haste to protect our reputation when this Government has taken so long to progress this legislation. It is legislation that is needed and that has got broad support around this House but we obviously do take umbrage at what the Government is trumpeting—that it is getting tough on white-collar crime and making sure that directors of companies act in a way that we would all expect they should act. But this legislation has languished for 2 years in this House before it has got anywhere close to being passed. It is no secret that this Government can pass pieces of legislation pretty fast to crack down on other forms of crime but when it comes to white-collar crime it is taking its time.