Flavell Te Ururoa: Limited Partnerships Bill Taxation (Limited Partnerships) Bill — Third Readings 
Flavell Te Ururoa: Limited Partnerships Bill Taxation (Limited Partnerships) Bill — Third Readings 
[Volume:645;Page:14775] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou i tenei ahiahi. One of the common catchphrases in this place is that a week is a very long time in politics. So it is from our perspective with the two bills associated with limited partnerships. Last week New Zealanders awoke to the news that Dr Cullen had introduced urgent legislation overnight to constrain overseas investments and investment applications in connection with a select group of strategically important assets. As the sun sets tonight the Government is pushing forward legislation that actually flings the doors wide open to investment structures for overseas venture capital. So we would suggest that it is no wonder the polls are dipping a little bit. It might be a case of the right hand not necessarily knowing what the left hand is doing. 
That aside these two bills—the Limited Partnerships Bill and the Taxation (Limited Partnerships) Bill—establish a new regulatory and tax regime for limited partnerships. Limited partnerships are the internationally preferred investment structures to attract foreign venture capital. Venture capital investment in Aotearoa is currently small as I understand it with the key sectors receiving investment being telecommunications software development biotechnology and other high-tech developments. 
As it stands most Maori businesses are too small to even get a look in. But perhaps more to the point the issues of ownership and accountability are the main issues of those in Maori business. As Richard Jones the Chief Executive of Poutama Maori Business Trust concluded in  
Tu Mai 
 magazine back in 2006: “They will want to have a stake in the business as well as some control even to the point of running it so investment of this nature is not for the faint-hearted.” 
This is the central hub of our concern as the Maori Party. We wonder exactly what interest foreign venture capitalists will have in Maori economic development. I am told that Te Ratonga Ture the Maori Legal Service advised the Commerce Committee that foreign capital investment will come at a price of shared equity and a measure of control. Te Ratonga Ture considered that foreign capital investment would also bring forward the possibility of moving the centre of control overseas. This is something we take very seriously. The new limited partnership business structure will open New Zealand up to foreign investment holus-bolus without we presume from its absence in the legislation any consideration for the Treaty partner to be able to monitor to assess to support or indeed to oppose such investment. 
We the Maori Party believe that it is critical that before agreeing to allow any foreign investor access into Aotearoa there needs to be extensive consideration of the conditions that will come with any such partnership. It is our belief that there are always ways to access funding without compromising what is important. The key point is not the limits of the funding but more the limits of our imagination in terms of considering possible funding partnerships and negotiating the right terms and conditions. 
As an example of the type of innovative thinking we need we have only to look in my electorate at the Tuaropaki Trust north of Taupo. The trust includes a $30 million geothermal power-generation plant 30 acres of temperature-controlled export tomato and paprika crops and satellite wireless communication. In their case the capital was raised through a non-recourse bank loan—the first of its kind. What it means in effect is that the bank has a claim over the project but not over the land. The Maori Land Court authorised the trust to form a single-purpose company also known as a single-purpose vehicle and the company was therefore able to apply for the loan. If it can work once it can work again and again and again. 
Another key factor in our analysis of these two bills is the suggestion from the select committee that confidentiality clauses should be incorporated into the legislation. The Commerce Committee recommended the deletion of clause 99 of the Limited Partnerships Bill and a replacement clause stipulating that the registrar must treat limited partner information as confidential. But in a really curious twist what the select committee recommended next was even more secretive than the privacy constraints because the select committee also recommended that the Official Information Act should not apply to limited partner information. 
Submissions received by the committee put forward an alternative view. Lawyer Christopher Littlewood pointed out the inconsistency in the application of one law for limited companies and another law for limited partnerships. He maintained that public registers should be public and that there is no rational argument to justify hiding information such as contract details or the nature of the partnership. We of the Maori Party agree with Mr Littlewood’s logic that the public has a fundamental right to know whom they are dealing with and to verify that information by consulting with the register. 
For another even more relevant opinion on the issues relating to privacy we were interested in the advice of the Office of the Ombudsmen which put forward the view that the privacy of individuals can be addressed through the routine application of the Official Information Act. As such the Ombudsmen believed there is no need to exclude application of the Official Information Act from this legislation. 
Four short words sum up what has lifted most successful individuals above the crowd: a little bit more. Those individuals do all that is expected of them and a little bit more. These two limited partnerships bills reinforce for the business leaders that investment and supportive initiatives may need a little bit more—creative courage to search for the required funding from alternative sources. There is no reason to fear that the only finance available will be that with an overseas address tag—a tag that brings with it the downstream problems associated with majority-share ownership. 
Large-scale foreign venture capitalists aim to buy in make money and get out regardless of the consequences. When we look at some of the development scenarios being considered we see that we have to start being concerned about these consequences. Biological materials from bio-prospecting activity on the foreshore and seabed or geothermal developments are just some of the areas in which growth may bring with it additional risks and cost. Capital is often traded for some form of ownership control and relocation requirements. The question remaining for the Maori Party is precisely around this issue of control. How safe is any guarantee that we can retain ownership and control over our resources and over our development? 
We have been thinking of the leadership and inspiration provided by organisations such as the Poutama Maori Business Trust the Tuaropaki Trust and other Maori businesses that deliver beyond all expectations. Their managers and their boards went a little bit further in taking the risks necessary to be successful. We learn from their example and the Maori Party believes that we must also give a little bit more in terms of responding to the model of leadership we see evident in Te Ao Maori. We know that Maori economic development Maori businesses can prosper without having to sell their souls. We know that confidence for business leaders will demand high standards of professionalism but also of open and brave accountability. We do not think hiding details away under confidentiality clauses excluding potential investors from the reach of the Official Information Act or throwing caution to the wind and opening up our domestic markets to foreign venture capitalists will work to support the long-term aspirations and best interests of tangata whenua. 
Without a doubt many Maori businesses need access to seeding capital to take them from concept through the start-up phase to a point where they are viable long-term prospects. If that capital were more accessible perhaps more Maori businesses would be in a position to negotiate with foreign venture capitalists. But what would remain of the fundamental questions of this time—the ownership and protection of customary resources and of whenua of the traditional knowledge of forests underground steam minerals water and organisms on the foreshore and seabed? Those are resources that the Crown attempts to claim as its own brokering deals for development that take ownership and profits elsewhere. 
This bill comes before things that need to be in place or that are in place. We need settlement of the Wai 262 indigenous fauna and flora claim. We need the repeal of the Foreshore and Seabed Act and we need fair and just settlements of Treaty claims. When these issues are resolved the Maori Party can return to the question of limited partnerships. Until then we will not be supporting this legislation.