Bennett David: Insolvency Law Reform Bill — In Committee 
Bennett David: Insolvency Law Reform Bill — In Committee 
[Volume:634;Page:6046] 
DAVID BENNETT (National—Hamilton East) 
: 
 As we have been talking about Part 5 of the Insolvency Law Reform Bill the National Party does have some major concerns about the no-asset procedure. I think it is important that as a country we look at the time of year we are entering. The next couple of months is a very important time for New Zealanders and their families as we come into Christmas. Just on Monday we had Labour Day and there were a number of sales in Hamilton for example. Major discounts were offered on appliances and other household goods. Consumers were lining up to buy such goods and they will line up over the next couple of months because they have families they have to buy Christmas presents for. They will increase their household debt to huge levels over the next couple of months. What will happen at the end of that time? People will have to make some payback in the early New Year. That is when the hampers come to fruition. That is when people pay for their families to go away on holidays. 
And what are we doing as a Parliament in this country? We are setting up an institution that encourages greater debt that tells people not to worry about it and that after Christmas they can write it off. Why would we be putting that message out? Well I guess it is the lesson we learnt last week is it not? If it is good enough for this Government to take that attitude it certainly signals that it is good enough for New Zealanders to have the same attitude. 
Let us look at some of the reasoning behind the legislation. When it was first put together by the Minister of Commerce it was disclosed: “The Bill proposes a NAP be introduced as an alternative to personal bankruptcy which is less punitive to individuals and may prove to have less social stigma attached to it. This would apply to first time debtors who have no assets and could not repay the debt. The proposal to introduce a NAP is the most significant change that the bill proposes in the area of personal bankruptcy.” Well certainly that is what the Minister was intending to bring about through this legislation. It has also been said in a press release from the Minister: “The No Asset Procedure is a one-off opportunity for an individual with no assets to be subject to the procedure for 12 months as opposed to 3 years as in cases of personal bankruptcy.” 
 Well those may be fine ideological things to put forward in a bill but they deny the reality that there is another side to any credit engagement and that is the institution that sells the product. In New Zealand that is generally a small business. This country is based on small businesses. Hundreds and hundreds of thousands of us rely on small businesses for jobs for income and for the support that is the integral part of the New Zealand economy and community. We as a country rely on small business yet at the same time we are about to give small business a decent whack. In this Chamber of representatives $40000 may not seem much but to a small business $40000 is the difference between a profit or a loss for a year. It is the difference between that small business retaining its staff. It is the difference between that small business still having a shop on the corner so that we can go down and get our newspaper on a Sunday morning. It is the difference between a small business actually paying the taxes that build up to pay the salaries of Government. 
Those small businesses cannot be kicked in the guts forever and a day. At some point in time they will either go out of business or go to Australia. They will do that; they will walk with their feet as we have seen in the last year. We cannot do that to a country built on small business. 
Chris Auchinvole 
: But they will. 
DAVID BENNETT 
: Members opposite certainly will and at the same time they are sending the wrong signals to all New Zealanders about the need for debt. We have a country whose economy has been strangled over the last 7 years. It is an economy that is now going into low-growth mode. On the world scale we need to be growing at 9 or 10 percent to keep up with our Asian neighbours. But what will we grow at? Probably at a rate of 1 to 2 percent. That is simply not enough to pay for the debt levels New Zealanders are incurring. New Zealanders borrow to the hilt. That is fine they can borrow to the hilt but they have to pay the mortgage and they are not going to pay the mortgage if New Zealand does not have growth. We live in a country governed by a Government that does not understand that that is willing to strangle growth and at the same time is willing to forgive debts to the extent of $40000. It does not have any concept of reality or safeness for small business.