Bayly Andrew; Tuiono TeanauSecond ReadingHon ANDREW BAYLY (Minister for Small Business and Manufacturing): I move That the Business Payment Practices Act Repeal Bill be now read a second time.It was very good listening to the speeches from the Opposition in particular—although I acknowledge the members from this side of the House—but I think there's a fundamental discrepancy in the understanding of what we're trying to achieve. No one in this House wants to see late payment particularly for small businesses. No one wants to see that across the House. The issue at hand is: how do you put in place some mechanisms to ensure that payments do occur particularly from large businesses to small businesses on a timely basis? Quite simply the proposition that was put forward by the previous Government is not the solution. They borrowed a solution from Australia without thinking and I think without the practical acumen to be able to work out whether in fact it was going to be a good scheme. It's interesting looking at the recent review of that scheme in Australia by the Minister the Hon Dr Craig Emerson. He writes in the covering note—and I quote here—A well-functioning reporting scheme that reveals the payment performance of large businesses has obvious merit."—that's my point; everyone in the House would agree with that—"It would increase Government and community awareness of the payment performance of large businesses." But immediately following that he goes on to say "I find that one of the objects of the Act—to make payment times information publicly available in order to 'enable small businesses to make more informed decisions about potential customers'—has not been met and is fundamentally unrealistic. I have made this finding for two main reasons. First awareness of the [scheme] by small businesses is extremely low." and he quotes that accompanying the dashboard "less than 1 percent of Australia's 2.5 million small businesses." are aware of the scheme. The second thing he says is "Second and more fundamentally the object is based on the flawed assumption that small businesses are in a position of market strength to pick and choose among prospective large-business customers. The object fails to recognise the inherent power imbalance between large and small businesses."So I quoted that because we are all of a view that we want to see more timely payments. That's why I said at the start of this bill that when I've been looking at what we could do to make sure that we do get more timely payments the specific measures I've put in place or intend to put in place are much more effective and will be much more effective and in my view are more practical—namely making sure and reinforcing that Government agencies should and will pay within 10 working days. That's $51 billion of expenditure which is roughly about a third of the economy and we will report their outcomes in a transparent way. Secondly we want to extend that to other Crown entities but we do need to go through a consultation process and of course I'm working with the Minister of Finance on it. So that's what we can do for Government in terms of existing payment times.But the much more fundamental thing that I am particularly concerned about and want to encourage as much as possible—particularly with small businesses—is the use and uptake of e-invoicing. That's why we'll be asking Government agencies to put in place e-invoicing - capable systems—and some of them have but many of them don't—and secondly encouraging and incentivising rather than requiring small businesses to adopt e-invoicing which is probably one of the biggest digital enhancements that we can achieve in New Zealand and it will drive some of the biggest productivity gains and that is by making sure that if you use e-invoicing particularly with the Government you'll get paid in an even shorter period of time of five working days.Then the second aspect of it outside of Government is working with large businesses. When you are talking about big businesses the group that Kirk Hope is talking about at Business New Zealand represents about 65 percent of GDP in New Zealand—180 businesses—and making sure that they have clear code around when they do pay small businesses. I take on board the Opposition's comments about large businesses not paying and the impact on cash flow—I understand that—but that is probably the biggest start we can make in terms of being clear with them about what are the payment times.So that is the purpose of the bill. It's not necessarily saying that we want to make it easier or that there's no obligations on large businesses. It's actually quite the reverse and this is what the package of elements that have been proposed for this bill are actually about. It's about improving those payment times and the simple fact is that you can go and get this information at any one point in time for a mere cost of approximately $35. That is why we think this is a waste of time and the reason this is being done in urgency—just to remind the House yet again for those who weren't here for the first reading speech—is that the Ministry of Business Innovation and Employment are about to commit at least $2 million to $3 million or possibly more on putting in a system that will mean that results are often 10 months out of date and of course many large businesses are going to incur huge amounts of time putting in a system that at the end of the day according to the Australian situation will deliver no discernible benefits. That is why we're proposing to repeal this as soon as possible. It's to save the Government money and to save businesses money but also to put in a much more effective system. ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to."