Connell Brian: Companies Amendment Bill Insolvency Amendment Bill — Third Readings 
Connell Brian: Companies Amendment Bill Insolvency Amendment Bill — Third Readings 
[Volume:616;Page:11940] 
BRIAN CONNELL (National—Rakaia) 
: 
 I have heard some self-righteous drivel since I have been in this House but that lot from Mr Peck would have to take the cake. That is the worst drivel I think I have heard since I have been here. Let us be clear. These bills that Mr Peck is taking the initiative for are simply union bills. He wants to take the credit for them so he can big-note himself. He is fooling nobody. We over here know that they are union bills and nothing he can say or do will disguise that. The bills have had a change of name but the issues are exactly the same. Mr Peck is the errand boy for the unions. We established that in the last debate. How do I know this? Because no one in this House other than the crazies on the other side really wants this legislation—not the thinking workers of this country and in particular not the hard working Kiwis who risk everything to start a business just so that this Government can come along and bash them up. 
This legislation will have a huge and negative impact on business confidence right across New Zealand. Just when the hard times are starting to really bite just when people in this country want this Government to take its foot from their throats what does it do? Mr Peck comes in with a sledgehammer. That is how he treats people in this country. Insolvency practitioners in this country have lined up with business people to oppose this bill. But were their concerns listened to? Of course they were not. Throughout the course of this debate we have been told that lots of submitters supported this legislation. That is not strictly true. These bills were opposed by Business New Zealand Financial Services Federation New Zealand Business Roundtable and the Joint Insolvency Committee of the New Zealand Law Society and the Institute of Chartered Accountants. I put it to members of this House that that is a pretty broad cross-section of taxpayers in this country. I ask members to compare that with the people who favoured the legislation: the New Zealand Council of Trade Unions—there is not much science in that—the Rail and Maritime Transport Union the New Zealand Nurses Organisation the National Distribution Union and the Service and Food Workers Union. In other words the union movement favours the bill—the very party that will be employing Mr Peck next because after this election there will not be a role for him here in this House. 
These bills will radically impact on the pecking order of creditors when a business goes belly up. I do not think Mr Peck and his union buddies have thought this through. The big losers will be secured creditors business suppliers contractors and—here is a novel concept for members on the other side—shareholders. Employee redundancy claims will take precedence over people who have provided labour unpaid suppliers and contractors people who have in good faith provided services for a particular business. What are Mr Peck and the Labour Government telling them? They are saying: “Naff off we don’t care about you. We do not care that you have worked hard that you have risked your money. The only things we stand for in this country are unions.” My good friend Mr Mark knows that with an absolute passion despite what Mr Brown will say next. 
Let us be clear about this—employees have rights. No one is arguing that they should not have rights and entitlements to holiday pay and wages. But let us be clear about redundancy—it is for money they have not yet earned. The definition of redundancy is for lost wages and these people will not be in that position. Within 1 or 2 weeks they will be re-employed or on the dole but the point is that they will not be disadvantaged in any way. Employees will be given preference over customers who have already prepaid for services and put things on deposit but this Government just does not care. It just says that it is too bad. The message for mainstream Kiwis is this: “The Government cares only about unions and to hell with the rest of you.” 
Auckland insolvency practitioner Bernie Montgomerie sounded a warning that banks and other secured creditors would simply pass the risk on to unsecured creditors. He said: “This will just be another rod for the unsecured creditors particularly contractors who get ripped off every time.” Does this Government care about that? No it does not. Do members know why the Government does not care about it? Government members have been ticket clippers all their lives. They have never been in business and they do not understand. The implications are significant. The implications for business development and expansion particularly in areas where that growth is needed most means that credit will not be available. It will simply dry up and areas that would have had active employment opportunities development opportunities in business will not have them. But Mr Peck and his mates are so myopic that they just simply cannot see that. 
The cost of credit will increase. I know my colleague Mr Key will take a call next. He will talk about the cost of credit because he understands this very well. The cost of credit will simply increase because banks price for risk. Where there is good security the cost of credit is less. Interest rates will be lower. Of course the converse applies. Where there is low or poor security offered then the risk is greater and banks will price for it. I fear that banks and lending institutions will simply say: “We are not going to lend—full stop.” They will become risk-averse. That will be an absolute tragedy for this country. Typically only those organisations with good balance sheets will get the money—and that is not the mums and dads who run most of the businesses in this country. They will be the great losers. 
It might interest members of this House to learn that 92.5 percent of companies in this country employ 10 or fewer people. They are the mums and dad of this country who have risked everything to run a business but this Government simply does not understand that. They are the people whose homes will be sold up when their businesses go belly up. They have mortgaged their properties and they cannot now meet Mr Peck’s new payments regime so they will be out on the street. They will be left with nothing but a sour taste in their mouths and that will dramatically change the landscape for development and for putting money into the economy. 
 Finally this bill goes against the recommendations of the discussion documents released by the Government in 2001 entitled  
Insolvency Law Review Tier 1 Discussion Document 
—and I quote it—“After wide consultation the review did not recommend any increase in the $6000 or $1500 limit for entitlements. Nor did it recommend that redundancy payments should be afforded priority over other unsecured creditors.” So why is it being done? That is the question. Why is it being done when the Government’s own advisers said: “Don’t do it.” The answer is it is payback time. It is payback time for the unions—that is the answer. Mr Peck and his buddies really do not care about the productive sector of this country. 
National does not support this legislation. We never would; we never could. The New Zealand public has sounded the warning to this Government. The poll results should be putting it on notice that if it continues with this anti-business type of legislation then it will be out on the street. I say to Mr Peck and his colleagues that they should keep doing it—they should keep passing this type of legislation because the next poll result will have the National Party sitting on 60 percent my good friends in the ACT party will be on 10 percent and the Government will be languishing on about 20 percent. 
Hon Richard Prebble 
: That’s very kind of you. 
BRIAN CONNELL 
: Well I thought I would give the members a bouquet.