Young Jonathan: Companies and Limited Partnerships Amendment Bill — Second ReadingText is incorporated into the Bound VolumeYoung Jonathan: Companies and Limited Partnerships Amendment Bill — Second Reading[Sitting date: 02 July 2013. Volume:691;Page:11430. Text is incorporated into the Bound Volume.]JONATHAN YOUNG (National—New Plymouth):Well just in reply to the previous speaker David Clark a good 48 to 50 percent of New Zealanders think that the economic record of this Government is pretty good.Dr David Clark: I raise a point of order Mr Speaker. Surely the member’s time is nearly up.The ASSISTANT SPEAKER (Lindsay Tisch): That is a debatable point but I am going to give it to Jonathan Young.JONATHAN YOUNG: Did you say that was a debatable point? Coming to the Companies and Limited Partnerships Amendment Bill it is a bill that went through a very thorough select committee process and received a tremendous amount of comment and interaction particularly from directors in the country. This bill will strengthen therules that apply to the governance registration and reconstruction of companies and it also adds criminalisation of serious breaches of certain directors’ duties. We know that getting the balance right is very important because this country does have a good reputation of ease of doing business but sometimes that ease of doing business lets people through who do dishonest business and can tarnish this country’s reputation. So getting the balance right is important.Many submitters raised concerns about the bill having a chilling effect on legitimate business risk-taking and this was something that the Commerce Committee members from both sides of the House paid particular attention to. One thing that we do want to see is the entrepreneurial aspects of business encouraged. At the same time we want to not see lawbreaking take place which puts New Zealand incomes in unnecessary jeopardy and also we want to see our country safe from the antagonism and attacks from overseas that happen on occasion.We know that in Mr Brian Gaynor’sNew Zealand Heraldcolumn on anti - money-laundering he said: “In 2010 the Financial Intelligence Unit of the NZ Police estimated that approximately $1.5 billion was laundered through the country every year.” That is a huge amount; it shocked me to read of that amount. So we know that definitely we need to see some strengthening and some protections around that sort of behaviour. The column continues: “For example Geoffrey Taylor a Queensland resident registered over 1000 New Zealand shell companies many through Vanuatu. In December 2009 one of these companies SP Trading leased a plane that was caught transporting 35 tonnes of weapons and explosives from North Korea to Iran.” And that was based out of here in New Zealand. We would be horrified to think that this sort of activity takes place through the shell companies set up here in this country. So what this bill is to do is clamp down on that and bring certain controls in order to protect New Zealand.As I said it is important to find the appropriate balance. One of the areas that the committee worked on was this area of registration because this bill brings together three strands of policy to strengthen the rules applying to registration as well as governance in the reconstruction of companies. So when it comes to registration we require a director who lives in New Zealand to ensure that they are identifiable with a substantive connection with the company who can be questioned about the activities of the company and who can in certain circumstances be held to account. The option of appointing an agent who lives in New Zealand was intended to provide an alternative with lower compliance costs for overseas-based New Zealand companies but we considered that such agents would be of limited help to enforcement agencies. And in many cases they would not be accountable for the actions of the company. The Commerce Committee recommended that the requirements for an agent living in New Zealand be omitted and that a New Zealand - based director or a director who lives in Australia be the requirement as it was considered that resident agents risk becoming also criminally liable for actions of the company or its directors over which the agent had little or no control. So working through some of these issues and trying to find the place where these pieces of legislation would work was something that the committee did.There are 4200 registered companies out of a large total of over half a million companies that do not already have a compliant director. Of these 1200 were deemed high-risk by the registrar. So this bill will come into enactment and what we will see is that there will be a small group of high-risk companies that the registrar—who I understand is already working in these particular areas—will bring compliance to and that will be a good thing as we see this bill come to pass and bring some certainty and some protection to our companies and also bring accountability to directors. Thank you.