Clark David: Companies and Limited Partnerships Amendment Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Companies and Limited Partnerships Amendment Bill — In Committee[Sitting date: 18 June 2014. Volume:699;Page:18667. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):These amendments to the Limited Partnerships Act are being made so that those misusing New Zealand companies cannot avoid the new regime by registering limited partnerships instead. So Part 2 of the Companies and Limited Partnerships Amendment Bill if we put it really simply is to avoid an unintended consequence by tightening up one area of the legislation that dishonest or mischievous directors might pursue by structuring their companies in order to do the kinds of ill practices that we are trying to stamp out here the kinds of things that we discussed earlier: taking debt dishonestly behaving fraudulently and behaving not in the best interests of the company they are representing. So if those same people who wanted to practise those things look for a different structure to misuse New Zealand companies they are not going to find it in the amended Limited Partnerships Act or at least we hope as the bill is drafted and has been carefully considered that that will be case.In this part of the bill we have also got reference to the Financial Markets Authority which was established in 2011 I think—if memory serves me right—and that has authority for oversight. It has got a responsibility here for overseeing the behaviour in the sector. In clause 46 in Part 2 we have the requirements for a limited partnership. They are all laid out and stipulated. The law is changed so that the nature of those people who can take up that particular nature of organisation is quite clear as is what behaviour might be deemed acceptable and unacceptable.The better alignment of these bits of law is of course a no-brainer in a sense. I mean who would oppose it? And that is why it is really good to be able to support this legislation. It is taking sensible steps forward and as others before us have asked we must wonder why these changes have taken so long. Those who do commit a serious breach of their duties to act in good faith will face consequences and that will not be significantly different under this part of the bill. I would invite the Minister of Commerce if he is willing to speak about any changes that there might be between the Companies Act and the Limited Partnerships Act in terms of the kinds of penalties that will apply but my reading of it is that the penalties apply under the two structures in the same way. Minister I am looking to you for a nod of affirmation or perhaps I will—I cannot see any response from the Minister there but perhaps he will get back to us on that in due course. It would be interesting to know whether there were any differences because what we try to do as I said at the outset is ensure that the law is aligned across the different structures to avoid those unintended consequences. So I would invite the Minister’s considered view on that. Certainly I cannot find how it would be applied differently.These new powers will give ultimately a power to investigate and deal with non-compliance. That is what we are asking for; that is what we have got. That will help to build that reputation New Zealand has for transparency and for being a good place to do business where people can deal fairly and we know we need that. We know that currently the environment is lagging. For example we heard today from Mr Brownlee in the select committee that there had been 11000 new small businesses formed since the Canterbury earthquakes. That is higher than usual turnover. That would tend to suggest that small business is not doing well in that area. Businesses are starting and folding in Christchurch. That tends to suggest that all is not well and we know that over the past 4 years more small businesses in New Zealand have been destroyed than created. The number of small businesses being created has dropped substantially and the number of small businesses that are not surviving has risen.So the environment is not healthy for small business. I am sure members in this Chamber who engage with small business as I do in my spokesperson roles for the Labour Party will have spoken to people who are struggling to get by. Often small-business owners in retail are earning less than the people whom they are employing. That is a situation brought about by an economic environment where the rewards of any recovery are not shared fairly across the population. Everybody wants to know that there is a fair environment one in which anyone who puts their shoulder to the wheel and is willing to work hard and abide by the rules can hope to prosper. [Bell rung] So this sets up—Mr Chair?The CHAIRPERSON (Eric Roy): Are you seeking another call?Dr DAVID CLARK: Yes Mr Chair. So this piece of legislation sets up the rules in such a way—sorry Mr Chair I was in the moment. This legislation sets up a fair system a system where people can imagine that they can start a business where they can prosper where they can get ahead where they can make the most for their family and for those around them where they might hope to one day own a home. We know that of course homeownership is unfortunately at its lowest rate in 50 years in New Zealand and this is something that the Government has not addressed.Labour has a plan to build 100000 new homes across New Zealand in order to work with New Zealanders to reach that aspiration. Of course we will do that in partnership with industry but having that dream is part of owning a business. It is part of hoping for a fair business environment and hoping that you can get ahead to own that home to have a family that has the things that you would wish them to have as they grow up: a good education a good health-care system and to be able to live in a country where there is high trust not just in business but across the society and of course work. And we know many employers feel that part of what they are doing is providing a social service actually. I talk to employers every week who acknowledge that a great part of what they do in their workplace is supporting their employees. Actually a lot of small-business employers are very well minded about this and believe that part of their civic duty is to create a structure where they can support and encourage and grow people who might one day own their own business or who might work somewhere else but who for the meantime are in their employ.So I congratulate the Government on finally getting the bill to this stage. I hope that it moves quickly from here because it is a piece of legislation that is worth getting into law. It makes sure that those white-collar criminals are brought to justice and that the rules for doing that are transparent. We applaud that on this side of the Chamber. We wish that some other white-collar criminals who are known closer to this place were brought to justice more promptly too. We do not always get what we want but this is a good step in the right direction. Thank you.