Key John: Companies Amendment Bill Insolvency Amendment Bill — Third Readings 
Key John: Companies Amendment Bill Insolvency Amendment Bill — Third Readings 
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JOHN KEY (National—Helensville) 
: 
 In 17 months there will be an election in New Zealand. After it the former Prime Minister of New Zealand Helen Clark will have tears in her eyes as she speaks to the former Minister of Finance of New Zealand Dr Michael Cullen. When that day comes in 17 months— 
Hon Member 
: Not before then? 
JOHN KEY 
: I doubt it. When that crushing defeat is delivered to the Labour Government in 17 months’ time its members will look back on today 24 March 2004. I doubt that they will look back to the Insolvency Amendment Bill or the Status of Redundancy Payments Bill as it was known and apportion any blame whatsoever to that bill. It is a small bill. It truly is a Government bill; it has been dressed up by Mr Peck as some sort of member’s bill but really it is a Government bill. So why should they in 17 months’ time after a crushing defeat has been delivered to them reflect on this day? Because this bill tells us two things about the Labour Party and gives us two reasons why this Government will lose for sure. 
The first of those is quite simple. Labour members simply do not understand business. They do not understand what drives the economy. I know that good economics is not always easy to understand. I know that good economics can be a little counter-intuitive. But what the Government has done in allowing this bill in sanctioning this bill as it travels through the House is to demonstrate the first principle—that they do not understand good economics and they do not understand how to run the economy. For 4½ years Labour members have come into the House and paraded all sorts of reasons why the economy is doing so well and why they are the cause of such a strong period of growth in New Zealand. But they have forgotten the whole way through that the real reasons for the growth have nothing to do with them. The growth has happened in spite of them not because of them. 
Why do I say that? Well the answer is very simple. This legislation changes the balance of power in corporate New Zealand. When this legislation goes through tonight—not with the support of the National Party the ACT party or the United Future party—thousands of small businesses will be in a worse position not just because they are susceptible to a loss if they are interacting with a company that has a supreme redundancy position as will be the case because of this legislation but because their businesses are fundamentally weakened by this legislation. Their business is now more vulnerable. The banks will ultimately look at the security that is required. They will ultimately look at those businesses and draw the conclusion that they are a greater risk and the banks’ propensity to want to be involved support and grow those businesses will change. That is the first reason why in 17 months’ time the former Prime Minister of New Zealand Helen Clark will be lamenting her great defeat to the former Minister of Finance Michael Cullen. 
Hon Richard Prebble 
: No she’ll be heading off to Cambridge University. 
JOHN KEY 
: She will be heading off to her real job—at the United Nations. It is quite a joke that she came down to the House yesterday and told the people of New Zealand that she is in the House debating issues all the time. She is not. The public of New Zealand know that she is around the world pursuing her real agenda. But I go back to the Insolvency Amendment Bill. 
The second reason that the Government will lose the next election is very simple: this bill picks winners and the winners in this bill are the employees who will get a preferential redundancy deal. The losers are the small businesses that will interact with it and the many other people involved in those companies. That is no different from the way the Government runs its normal economic agenda. It picks winners. This is a Government that knows best. It knows when the exchange rate is too high and when it is too low it knows when a company should be invested in and when it should not be and this legislation is just another example of that. When things really turn to custard as they truly will—and the Minister of Finance has already told the country we need to tighten our belts because we are heading into an economic recession and that he has no answers as to how to produce higher levels of growth so we are on our own; that was the message he gave the Labour Party a couple of weeks ago—this is the kind of legislation that will cause all sorts of problems. 
There is no need for this bill. There is absolutely nothing stopping employees in New Zealand from having this kind of contract with their employers nothing whatsoever but they do not do it. Why do they not do it? Because either they do not think it is important or they do not actually want to go their employers and talk to them about why they want to have it because they know that their employers will recognise the weakness of the position. There is nothing stopping them. If it is such a great idea if it is no big deal and nobody cares about it as Rick Barker and various other members have said then let us just let employees out there go and negotiate today. It is a free world; there is nothing stopping them. We do not need this legislation. 
The second point I want to pick up on is the point that Mr Prebble quite eloquently outlined in his speech and it is very simple. A redundancy payment is a payment for a future activity that would have taken place. That is the issue. The real people who will be hurt by this bill have already delivered their goods. The Labour Party members do not care about the fact that those people have actually undertaken work and done the hard yards. I am referring to the guys who have fixed up the lighting in the factory for example or swept the floors; the guys who have changed the broken light bulbs and fixed the broken window frames. They have done the work but apparently they do not deserve to be paid because they are entrepreneurs—because they have had the guts and the gumption to get out there and get a small business going. They do not deserve the support of the benevolent Labour Government which wants to pick winners. They are not worthy of support because they are prepared to get off their butts every day get out there and toil hard for New Zealand. They do not deserve support and they do not get it in this legislation. What they do get is a far weakened position as a result of this legislation. 
But the very people whom the Insolvency Amendment Bill will support do have options. There is nothing stopping them from getting a job in the future. They do not necessarily lose because of being made redundant. I was involved in a number of commercial companies in a 20-year period that made people redundant and within days they were in a new job. Some of them were really grateful that we had made them redundant. They were very happy to have moved on. They had plenty of opportunity to find a new job. It is not a sad story everywhere. If the Government were prepared to have pro-growth initiatives there would be plenty of opportunities for the employees of the odd company that fails to find another job. That will not be the case for the small-business person who has delivered the goods; that will not be the case for the builder who has worked for months and months on end and whose family needs the money to pay for the kids’ school shoes. That is not the situation for them. If employees cannot find another job they can get and enjoy the benefits of the welfare system which we know the Labour Government loves and develops and continues to cherish. They have lots of options but not the people who will be disadvantaged by this system—they do not have options. 
Lastly I want to talk a little bit about the point that Mr Prebble picked up on which is that a manager who is not a director could in fact write himself or herself a contract. 
Hon Richard Prebble 
: Maybe he should write it anyway and put it in the top drawer. 
JOHN KEY 
: That is exactly the point I was going to make. Managers might choose to have contracts at any time. They do not have to do it within a few days. Most managers can see a redundancy coming years ahead of when it really takes place and there is absolutely nothing stopping them from making sure they have a cosy little deal for themselves and the managers who work with them. There is absolutely no reason why they would not have a contract. Rob Muldoon used to have a letter of resignation already signed from every member of his Cabinet— 
Opposition Members 
: That was Holyoake. 
JOHN KEY 
: Holyoake—OK. If he can do it the managers of New Zealand can do it. This legislation is terrible.