Edmonds BarbaraBARBARA EDMONDS (Labour—Mana): Thank you Mr Speaker. It's great to be able to have an opportunity to take a call on the Financial Professional Services Trading Advice Transparency Bill a member's bill in the name of Barbara Kuriger and I congratulate the member for her bill being drawn.Prima facie the bill seems to make a practical change—that is it prevents financial advisers who recommend that a third party take over the management or disposal of a business or its assets from performing such functions themselves. At first blush that does seem somewhat reasonable. The bill proposes changes to the Companies Act 1993 in Part 1; in Part 2 it makes obviously considerable changes to the Receiverships Act; and it also comes into force the day after it receives Royal assent. Overall I understand the purpose of that bill is to remove that conflict. However—here comes the but"—but what if we already have conflict management provisions already in the current law conflict management provisions that funnily enough the Opposition agreed to in 2019 when we put through the Insolvency Practitioners Regulation Act? That's the problem with this bill from this side of the House. We have the current provisions that manage such conflicts—conflicts of interest on the part of insolvency practitioners and when such conflicts should prevent them from acting on a specific appointment. That's again already been considered and enacted as part of the Insolvency Practitioners Regulation Act 2019.So Parliament only a couple of years ago agreed. We got support from the National Party at the time. The member who was the chair of the Economic Science and Innovation Committee which looked at this particular legislation—because the Companies Act and the Insolvency Act are actually underneath their remit not the Finance and Expenditure Committee's. When they looked at it they agreed and there were particular changes that were made by Minister Kris Faafoi at the time in order to get such agreement from across the House. So again only a couple of years ago they agreed that a person who has provided professional services to a company in the two years before its insolvency is prohibited from acting as its liquidator or a receiver unless those services advise on the solvency of the company.Secondly the Insolvency Practitioners Regulation Act only actually fully came into force in September 2020 so this side of the House believes that that Act created a robust occupational regulation regime designed to prevent inappropriate conduct by insolvency practitioners. This particular member's bill however was only introduced 12 months later and we have not so far seen sufficient repetitive evidence that the changes made in 2019 require another significant change less than two years after the bill has been enacted. So it's for those reasons that Labour does not support this bill. To provide some context for the House as to why Labour doesn't support the bill we have to have some understanding around insolvency law and why we landed with the current legislation that makes this member's bill redundant. Insolvency law can seem complex and fortunately for me one of the roles I had to play in a previous life was to be able to provide the standard practice statements for how the Commissioner of Inland Revenue would apply the tax law around insolvencies and liquidations. So I have a little bit of experience particularly when it comes to debt collection. One of the main aims of insolvency law is for businesses to be turned around if they are viable because that's what we want. We want businesses to succeed and that's important. But if not they should be wound up and the assets realised and distributed to creditors in accordance with clear rules and with a minimum of harm both to the insolvent party and to their creditors. This is a system that does rely on trustworthiness and competent professionals to act in the best interest of creditors and the regulation of insolvency practitioners which was put through in that 2019 Act is an important part of this commerce and consumer affairs legislative framework.As advised earlier the 2019 Act changes were made with the support of the Opposition and again it was to promote better outcomes underneath the corporate insolvency system by strengthening the regulation of insolvency practitioners. How the Act supported those outcomes was it introduced a robust new regime for licensing practitioners. It provided effective mechanisms for holding them to account and it required things such as professional development to raise the standards of practitioners' behaviour at the time. Those were necessary changes to ensure that all the insolvency practitioners meet the basic standards of honesty and competency that the public is entitled to expect. Unfortunately at the time—and that's the reason why this regime was put in—there was clear and repeated evidence that a small number of practitioners continued to fall well short of those standards. They used to engage in conduct such as charging excessive fees for their services carrying out unnecessary work to inflate their fees. They were acting in the interests of the directors of insolvent companies who appointed them at the expense of the creditors and taking on appointments without the necessary skills knowledge or expertise. That insolvency practitioners Act 2019 sought to address those issues by introducing a co-regulatory licensing system modelled on one under the Auditor Regulation Act of 2012 so that's what the current regime is actually mastered off.So under the current system the Registrar of Companies will be required to set minimum standards for licensing insolvency practitioners and to accredit professional bodies bodies such as that referred to by the previous member. These accredited bodies will be responsible for the front-line licensing and regulation of individual practitioners which includes regulating their entry into the profession ongoing competency investigating complaints against practitioners reporting on the adequacy and effectiveness of their regulatory systems and processes. Section 5 of the Receiverships Act which is what this bill sets out to make a small change to does set out the condition that if you want to be a receiver you have to meet. So a person may be appointed as a receiver if that person is licensed in accordance with again the 2019 insolvency Act and section 12 of the Insolvency Practitioners Regulation Act says that licences are subject to particular conditions and it sets out the types of conditions that are under section 12. Section 22 of that same Act says "Registrar may prescribe licensing and other measures". Again this is to set minimum standards. So again at first blush it looks like a good piece of regulation. However on further detailed analysis and understanding the regulatory regime that we have now some of the history of that regulatory regime—which is again only a couple of years old—the lack of evidence that has come to our attention for needing to have this conflict provision because we on this side of the House believe that the current provisions do address that. Licensing bodies can prescribe conditions. The registrar can prescribe licensing conditions. So we oppose this bill. We believe that the current 2019 Act is sufficient. Again I'll just conclude my argument: it introduces a robust regime which includes rigorous competency honesty and integrity criteria in relation to obtaining and retaining a licence to act as insolvency practitioners. We believe it provides an effective way for holding practitioners to account. The 2019 Act makes other amendments to both the Companies Act and the Receiverships Act. Again this member's bill makes those changes again to extend that and again we believe that that particular Act updated those pieces of legislation to ensure they were fit for purpose. We believe that more time is needed. If the other side of the House believes that it's failing we haven't seen any evidence so far to say that it is failing. It has been only two years since the 2019 Act was put in which again had support from across the House. So Labour does not commend this bill to the House."