Jones Shane: Insolvency Practitioners Bill — First Reading 
Jones Shane: Insolvency Practitioners Bill — First Reading 
[Volume:666;Page:13552] 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. Firstly I stand to support—bizarre though this may sound to be—many of the sentiments expressed by the previous speaker Dr Nick Smith. Indeed as he was on his feet I shared with a colleague of mine the thought that the colleague should observe Dr Smith outlining a case apparently about egregious wrongdoing—of potential criminal liability. One of the virtues of being in Parliament is the ability to outline before colleagues of the House and indeed to the public via the media those cases that warrant the attention of this House. Of course what we should bear in mind upon making those statements is that facts have to be of a high order and that a remedy should follow closely behind them. But the case that Dr Nick Smith has outlined gives a great deal of impetus as to why we should support the Insolvency Practitioners Bill. 
I was reading several days ago about the appointment of receivers to Allied Nationwide Finance the finance company associated with the organisation that—in my view unwisely—sought to assimilate the assets of the two discredited businessmen Eric Watson and Mark Hotchin. They however can wait for another day. This bill is important if we look at a case like that of Allied Nationwide Finance where the actual investors are highly likely to recover most of their money by dint of a Treasury guarantee. It raises a question as to the quality of stewardship that will be shown by the receivers in such a case because there is a balance to be drawn between how much time and energy they exhaust in the pursuit of monies in order to satisfy creditors and ensuring that they do not exhaust time and energy to such an extent that they actually melt down the residue that might be available for the parties injured by the enterprise. Many of us have watched in our small provincial towns as insolvency practitioners and receivers were appointed by virtual associates and virtual friends. They conducted their affairs in such a way that we could see that although they were hiding behind the patina of the reputation of their profession in fact they were also aiding the agenda of the people who had appointed them. 
I remember that several years ago the Inland Revenue Department—if I am not mistaken it was the Inland Revenue Department—and members of the accountancy profession brought forward a proposal that in matters of receivership there should be an unqualified ability for the statutory creditors to zoom in and take everything. I think that this bill lifts up the professionalism required of a receiver. We need to ensure that the people who have this role draw the right balance between the time and money available to pursue monies that are outstanding and also the ability to listen to and treat different categories of creditors with a degree of fairness. Receivership takes place at a time when there is an enormous amount of stress marital discord and—dare I say it—as we learnt in the 1990s even death. We must bring to an end the damage done by dodgy secondhand-car salespeople or by people like the friends of Eric Watson and other discredited members of the business community who have rorted over $6 billion worth of pensioners’ monies through the imbroglio of the finance companies. This bill seeks to do that and it is good that there is a shared level of concern between our former Minister and the current Minister about that. 
Earlier today we were debating the wisdom of expanding savings vehicles and improving the taxation treatment of those vehicles. It is all very well for us to talk about expanding savings but in order for that to occur we need to have professionals whom members of either the business community or the ordinary New Zealand community can trust. Our desire to expand the scope for business to create new trajectories of wealth will not come to pass if the people in society whom we charge to carry out these responsibilities are not accountable cannot be held to be accountable or are unfit for the task. Receivers and liquidators are only one part of that; there are a host of other characters who have not distinguished themselves with a great deal of success or high-quality conduct in the funds industry—the finance industry. I salute the architects of this bill and the people bringing forward the concerns of individual constituents firms and creditors but this is really just a small part of a broader challenge that we have in New Zealand. If we are to ensure that the conduct in our commercial sectors improves then those who have special responsibilities of an administrative nature need to be held to a high level of accountability. 
I have often wondered about the American model which really moves very quickly into criminality. In the way that we have tended to deal with cases of egregious failure of a commercial—a white-collar—nature unless there is a criminal issue then we do not ordinarily think that these people should go to jail. That is a distinction that I have often drawn as I have spoken and thought about these things. In the United States of America people tend not to dither. The wrongdoers the culprits are very quickly arrested and in a remarkably short period of time they are sharing figuratively a cell with O J Simpson. I wonder as we move to improve the quality of administrators whether we ought to think about injecting penalties of that burden of that nature into our law. I have no doubt that had that situation applied many of the people who have acted wrongly or who were dodgy in the period of time of the finance company breakdowns would be facing a wider range of penalties than they face now—although a few of them are going to court and then it is up to our District Court and High Court judges. 
We have heard from various speakers as to why this legislation is very important. I would say that although it is important in terms of the breakdown of a company we should see its importance also in actually buttressing and strengthening the pillars of the commercial community the commercial sector for the benefit of the generations coming through—unsophisticated investors and creditors like a constituent who came to see me recently. A building company went broke and he had not registered or possibly did not know that he had to register his claim to $200000 worth of tiles prior to the appointment of a receiver. Of course the receivers arrived and his ability to—legally—secure the tiles now that the premises are under the control of the receiver is somewhere near zero. That tells me that in a time of economic buoyancy when everyone had a lot of money and there was a lot of cash going around we probably were sloppy—and that constituent certainly was. But he is learning a very valuable—and indeed highly costly—lesson that once a receiver is appointed if the provider of either a service or material has goods that have not been registered then the prospect of that party recovering them is very very slight. 
Not only does this legislation represent a very sensible advance but it is a reminder that we have to lift the quality and the standard of administration right across the commercial sector—certainly in the event of a greater savings development and of a greater level of interest in our economy when money may be put into certain areas where there may be risk in order to grow the economy. I support this bill.