Hayes John: International Finance Agreements Amendment Bill — In Committee 
Hayes John: International Finance Agreements Amendment Bill — In Committee 
[Volume:642;Page:11810] 
JOHN HAYES (National—Wairarapa) 
: 
 I rise in support of this bill and to speak on Part 1. I particularly want to direct my comments to small businesses because it is quite interesting to see that the members from our region include Australia the Federated States of Micronesia Palau Papua New Guinea Samoa Vanuatu Fiji Indonesia Thailand and Viet Nam. This legislation can be used by small businesses. Set up under the Multilateral Investment Guarantee Agency is a section that is particularly designed for small to medium sized investors. 
In order for small New Zealand businesses or even medium sized New Zealand businesses to get access to a guarantee the reciprocating party the other country in which the investment is to be based also has to be a member of the agency. So those member countries that I have named are really quite important. I think that the encouragement of growth in small to medium sized enterprises in the countries we are talking about in our immediate neighbourhood is critical to the creation of jobs and economic growth. I think the agency will be useful because it will help investors in New Zealand especially those that are small or medium sized to invest in these countries. For example if we think about Fiji and the failing sugar industry it ought to be quite possible for a New Zealand company to go in there and encourage the development of an ethanol industry on the back of that sugar industry. 
The areas that we will have to be in to take up the purpose of this legislation will be those associated with the expansion modernisation or financial restructuring of existing projects. Also eligible for New Zealand companies will be acquisitions that involve the privatisation of State-owned assets and that will be particularly relevant for example in Papua New Guinea where a lot of privatisation is going on. The types of foreign investments that this legislation will provide a guarantee for will include equity shareholding loans and other shareholder loan guarantees provided there is a maturity of 3 years. I am talking only about dealing with the small to medium sized enterprise investment. 
Before the guarantee office will pick up an investment and protect it for a New Zealand company it will have to be satisfied the project is financially and economically viable environmentally sound and consistent with the labour standards in New Zealand and the licensing agreements that would apply in New Zealand. The eligible investors will include nationals of member countries of the convention—and those will soon include ourselves—and corporations if they are either incorporated or have their principal place in a member country or if they are majority owned by nationals of member countries. If they are majority-owned New Zealand companies they will be eligible. 
New Zealand companies that wish to invest in the immediate region will be required to meet a few other criteria. First of all the entity is to have no more than 300 employees. It must have assets of less than US$15 million so it could conceivably include for example some of the tourist infrastructure in Fiji. The total annual sales must not be more than US$15 million. This scheme which has been specifically designed for small and medium investors has no restrictions in respect of the size of the investor but it is specifically designed to assist small and medium sized investors and most New Zealand companies would fit that arrangement. 
The second comment I would like to make while I am on my feet is that this convention was signed up to in Australia back in 1996. It came into force there in 1998. The one thing to think about is that the Labour Government has been in power here for the last 8 years and what progress has it made? What has it been doing to help our small to medium sized businesses? That Government could have signed up to this convention. [ 
Interruption 
] I say to the Minister that he could have organised this 8 years ago and the Government could have been supporting New Zealand industries. The Government could have been supporting small businesses in Papua New Guinea in Fiji in Palau and in the Federated States of Micronesia and the Minister has not failed to do that. 
Hon Clayton Cosgrove 
: I haven’t failed to do it. Thank you very much. 
JOHN HAYES 
: I beg your pardon? 
Hon Clayton Cosgrove 
: I’m just quoting you. You said that I haven’t failed to do it. 
JOHN HAYES 
: Well I think that the Minister has actually because— 
Hon Clayton Cosgrove 
: That’s what you said—that I haven’t failed. 
JOHN HAYES 
: The Minister has failed. He has failed to put this measure in place and I think small New Zealand businesses and our immediate neighbouring countries can be really concerned that this legislation has taken so long to get into this Parliament. 
With those comments I would like to offer our support for this bill because I can see it helping in particular our small Pacific Island States and small to medium sized enterprises here in New Zealand. Thank you. 
Part 1 agreed to.