Clark David: Accounting Infrastructure Reform Bill — Second ReadingText is incorporated into the Bound VolumeClark David: Accounting Infrastructure Reform Bill — Second Reading[Sitting date: 03 July 2014. Volume:700;Page:19244. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I rise to speak in support of the Accounting Infrastructure Reform Bill or the “AIR Bill” as referred to by the Minister of Commerce. The Minister’s stated objective with the bill—the fair effective and transparent functioning of our markets—is an admirable one and in so far as this bill supports that we are keen to add our support on this side of the House. The opening up of audit activities to move trans-Tasman competition effectively to ensure that standards are consistent between Australia and New Zealand introduces an interesting dynamic into the audit world. It comes with risks and with opportunities. One would hope that our New Zealand firms and our New Zealand - based firms will take advantage of the opportunity to secure business in the audit area through being competitive professional and indeed just generally good at what they do. The risk of course is that the business of audit becomes concentrated in larger more successful firms in Australia as we have seen in our banking sector. There are always risks that accompany opportunity.The good provisions that are in here are actually about simplifying things and about making things more transparent. One hopes that New Zealand’s interests as new accounting standards are set are taken into account in a proportionate or more than proportionate manner so that the accounting standards are suitable for New Zealand purposes. Something that we have observed on the Commerce Committee and on the Finance and Expenditure Committee in the past is an increasing requirement for reporting that is more detailed more complex and more expensive. The intention behind that increased reporting generally is to ensure greater protection for consumers and to ensure that effective transparent and fair functioning of markets. We—I am sure others in this House as often as I am—are reminded again and again by constituents by business people and by those in the accounting profession who have a mind to the future and to the better interests of our country that the overcomplication of financial reporting requirements can hinder the productivity of our business sector. So I ask that those who implement this legislation—which we are supporting here and which I expect will pass through the House relatively non-controversially—will take note of this Parliament’s wish that they do not overly complicate matters when it comes to audit and reporting and indeed that they take into account the interests that we have in seeing that fair efficient and transparent market without being overly burdensome in their requirements. I do not hear any loud objections from the other side of the House on this point. It is something that I think we will all agree on.On this side of the House we are always motivated to see a fairer system in place and to see red tape reduced. Again an opportunity here to simplify standards across the Tasman will mean a reduction in red tape for people who do business on both sides of the Tasman. It will make New Zealand firms potentially more competitive as they are complying with only one set of standards for the products that they export rather than two in the broadest sense. The trick comes when the bigger neighbour which dominates the professional body sets the standards if they are not in our interests. We see this in things like the housing sector. When it comes to setting common standards for the building industry New Zealand is sometimes on the wrong end of the deal where standards that are appropriate in Alice Springs or Brisbane may be different to those required in Gore or Invercargill—different priorities different materials.Grant Robertson: Colder.Dr DAVID CLARK: It is not that cold in Brisbane Mr Robertson.Grant Robertson: It’s cold in Gore.Dr DAVID CLARK: Gore is a lovely place and a nice place to visit. It is the case that we want to see standards that are open to the interests that are represented across the professional body.I would like to congratulate the New Zealand Institute of Chartered Accountants on its work in bringing a full submission. The institute is a body that makes a constructive contribution in my experience to the legislation that we put through Parliament. I note that in my own field—or the field where my interest lies—of tax simplification the institute has had a proposition on the table for many years that would see our tax system in New Zealand simplified. It would reduce red tape for businesses and would make sure that we are not performing compliance unnecessarily. The institute is a body that is open to expressing New Zealand’s wider interests even where in the case of tax simplification it may actually lose professional fees through suggesting a more simple tax-reporting process. The institute’s proposal I have to say has not been addressed by this Government and that is a personal disappointment that I have. I speak to many constituents who feel aggrieved that they have to prepare retrospective accounts for their businesses that add no value. When they are a small business these are simply for tax-compliance purposes.I would appeal to the people on the other side of the House who are pushing through this bill on making the market and auditing fair effective and transparent that they also look at the other suggestions that the Institute of Chartered Accountants has brought. I know it is setting up a tax simplification board at present and Minister McClay has expressed a desire to proceed with this work but I would suggest that this work has not proceeded fast enough. We know very well that this proposal has been around for years. Minister McClay is pushing a lot of useful tax work out beyond the election because this Government has not repaired the Inland Revenue Department tax system. It has not upgraded it in time to handle the kinds of changes that would actually make life a lot simpler for New Zealand’s small businesses that would enable business in New Zealand to get on with doing the things that it is good at that add to our exports that add to our gross domestic product and that mean that we can afford the kind of infrastructure in New Zealand that ensures that future generations get ahead—that hospitals and schools are funded to an adequate standard so that kids can have the opportunities that those of us sitting in the House had once upon a time when we were attending school or had to attend a hospital.An economy that works for all New Zealanders is something that we on this side of the House want to support on every occasion. We are told by the professional bodies that this will make their lives easier. We want to see a fair and just society where all live in dignity. In the Labour Party we have a view about equity of access. We hope that that will be taken care of as professionals deal with these audit requirements—that they have an eye to making sure that they are accessible to everyone that the legalese and the technical aspects of audit compliance are kept to a minimum that an eye is kept out for those who are new business people who are small-business people and who are people on the margins of requiring new processes and accountabilities as they wrestle with the need to be fair effective and transparent participants in the market.We look forward to seeing this bill pass through the House. Reducing red tape is something that we always support. Not enough of that happens at the moment. As spokesperson on small business for the Labour Party I visit businesses all the time that are affected by unnecessary regulation. It hampers New Zealand’s competitiveness internationally and it is something this Government has not worked hard enough to address. Tax simplification is another one. Making our tax system compliant useful and easy to access for our citizens so that they can hand over their information securely and not worry about the kinds of privacy breaches that have dogged this Government over recent years must be a priority. We need a functional tax system. We need these functional audit capabilities. We need a Government with energy. I am hoping that people watching this broadcast and following the Accounting Infrastructure Reform Bill at home on their TVs are considering that it is important to change the Government—to vote for a Labour Government which will see a fairer more just society in future.