Brash Don: Credit Contracts and Consumer Finance Bill — In Committee 
Brash Don: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8840] 
Dr DON BRASH (NZ National) 
: 
 I was impressed with some of the points that my learned colleague Mr Franks made. I think it is a great pity that he was not able to present those points at the Commerce Committee because it seems to me that some of them do have force. There can be few people in this Committee who have more experience of commercial law than Mr Stephen Franks has. But at this stage I am assuming that the Government is not able or is not likely to change this bill so I will confine my comments to Part 6. I want to emphasise the comments that my colleague Lindsay Tisch made a few moments ago. I will speak about both the transitional provisions in clause 114 and our concern about the compliance costs. 
Clause 114 as amended by Supplementary Order Paper 141 in the name of the Hon Judith Tizard comes into force on 1 April 2005. It seems to us that that is a useful advance but a number of submissions on this bill suggested that even that transitional period would be too short to reduce the compliance costs that are inevitably involved in this new legislation. I think it is unlikely that this bill will go through the Committee stage and its third reading today which means that it will not be passed until well into October. That means we will not even have 18 months between the bill becoming law and coming into effect on 1 April 2005. We will have fewer than 18 months for the financial institutions affected by this bill to get their systems documentation and so on into order. That is a very minimal period— 
Stephen Franks 
: They want to have headlines during the election year. 
Dr DON BRASH 
: Mr Franks makes a very important point. Some of the submissions suggested that the transitional periods should be at least 2 years. I think we have compromised with a period of 18 months but there will be less than that between the time that this bill becomes law and the time that the law comes into effect on 1 April 2005 and we regret that. 
Mr Tisch made the point that we have been increasingly concerned on the Opposition side of the House about the compliance costs that this Government lumbers on the business sector and it seems to me that this is just one further example of that problem. As Mr Tisch pointed out earlier KPMG and Business New Zealand released a very comprehensive survey of 760 businesses on 25 August which indicated that three of the 760 businesses surveyed felt that compliance costs had reduced over the last 12 months. Eleven of the 760 businesses felt that compliance costs had not changed very much over the last 12 months and 746 of the businesses—98.2 percent of the total—felt that compliance costs had gone up. That survey indicated that tax compliance costs and issues relating to the Occupational Safety and Health Service the Resource Management Act and the Employment Relations Act were all significant issues for a great many businesses. This bill does not talk about that territory. It is just one more example of the compliance costs that are lumbered on the business sector at every turn. 
Large businesses can often cope with those compliance costs because they can employ specialist human resources people and specialist lawyers and accountants. But compliance costs are a very major impediment to growth for smaller businesses. They are a major impediment to taking on more staff and a major reason that our growth in per capita income is still insufficient to get us back to the top of the OECD or even halfway up the OECD ladder within a reasonable period of time. Indeed at the moment all those compliance costs—of which this bill is a good illustration—are likely to mean that we will never get back into the top part of the OECD—not in 20 years not in 30 years and sadly not even in 50 years.