Donald Rod: Business Law Reform Bill — First Reading 
Donald Rod: Business Law Reform Bill — First Reading 
[Volume:609;Page:6533] 
ROD DONALD (Co-Leader—Green) 
: 
 Mr Speaker— 
Pansy Wong 
: Did you read the bill? 
ROD DONALD 
: I have read enough of the bill and if Pansy Wong listens carefully she will hear what I have to say about it. The Green Party believes this is a good bill and we look forward to its speedy passage. I am sure there will be wording that the various members of the Commerce Committee will seek to tidy up especially if there is a good body of lawyers on the select committee because after all this bill is largely commercial in nature. But it is more than just a technical bill. There are some very very significant improvements to legislation in this bill. That is why we were bitterly disappointed that New Zealand First held up the introduction of this bill by requiring this House to have a notice of motion so that the bill could come before us especially as the bill was agreed to by the Business Committee on I think 21 May 2002. So why New Zealand First changed its mind I really do not know. 
The most important changes in this bill and the ones that I am sure listeners are desperate to come into effect are the changes in Part 10 in particular. Part 10 contains changes to the Securities Act and will restore some sense of balance and perspective and if one likes adopt a logical approach to employer-subsidised superannuation schemes. We have had the ridiculous situation for the last 2 or 3 years that very tiny employer superannuation schemes have had to jump some pretty high hurdles in order to comply with the Act. I am particularly talking about the need to produce a prospectus when in most cases the members of the scheme do not want to see a prospectus. They are quite happy to put aside a little bit of their salary and for their bosses to supplement that and they look forward to a nest egg when they retire. But that nest egg has been disappearing because of the compliance costs that successive Governments have imposed on employer-subsidised superannuation schemes. 
One can see the consequences of that when one looks at the figures the Government Actuary produces each year. It is horrifying to note that over the last 12 years the number of employer-subsidised schemes has dropped from 2242 in 1990 down to only 560 in 2002. Of course it would have been 559 if the Green Party had not had the good sense to set up the Green Futures Superannuation Fund. But it is not just the reduction in the number of schemes that has caused us major concern; it is also the reduction in the number of working New Zealanders who are receiving the benefits of employer-subsidised superannuation. That number has dropped from 310741 in 1990 down to only 245003 in 2002. In other words there are 65000 fewer New Zealand workers who are saving for their retirement through an employer-subsidised scheme and whose employer is being a good citizen by subsidising that scheme. Anything that we can do to reverse that trend and to encourage employers to support their staff in saving for their own retirement has to be a good thing. 
That is why we particularly support the changes in Part 10 of this bill and also the changes in Part 12 which will lead to another significant reduction in compliance costs for employers. They will not have to send a full set of annual accounts for those superannuation schemes out to all their staff. That means not only that the people in existing schemes will face reduced administration costs and therefore more money in their savings account—their superannuation fund—but that there will hopefully be two significant or important steps towards more businesses offering their employees subsidised superannuation. Of course the trifecta will come through when the new taxation bill comes in this Thursday and the Government takes its first tentative step towards getting rid of the taxation disincentive that is currently imposed on employers who at the moment have to pay at 33 percent for their specified superannuation contribution withholding tax. That is fine if one’s marginal tax rate is 39 percent but if one’s marginal tax rate is 21 percent or 15 percent that means employers are being penalised and therefore that those low-income employees are also being penalised. We will say more on that on Thursday when that bill comes in. But together those three things should make an important difference. 
This bill contains a number of other important amendments. Often they have been at the suggestion of the respective industries. For example the amendments in Part 1 relating to building societies were proposed by the Financial Services Federation a very important organisation that represents New Zealand - owned and operated mutual funds—the backbone of the community financial sector in the opinion of the Green Party. Many of us will be aware of the role that local building societies play not only in helping people to achieve their homeownership aspirations and helping businesses to achieve their small business dreams but also in supporting local community projects. It was a pleasure to meet with the chief executive of the Southland Building Society last week and to hear that it has just achieved a record year. Its members’ equity is up by 14.7 percent its total assets have grown by 18 percent to $1.34 billion and what is more its pre-tax operating surplus has increased by 60 percent to a record $16.2 million. I think the members of that society would be the envy of a lot of people who have put their money in managed funds that have gambled it on the overseas sharemarket and who have seen their money disappear. Clearly the tried and proven building societies are a much better place in which to make an investment than that. 
So too of course are the credit unions which are covered in Part 7. Again the changes in the bill were proposed by the Association of Credit Unions and it is good to see that this Parliament is prepared to help credit unions to continue to play their important role. There is another piece of legislation before the House that will help them and the buildings societies: the Reserve Bank bill. That bill will allow them to continue to use the words “bank” “banking” and “banker” so that they can promote their services to the community in competition with the big foreign-owned banks that are sending the profits from our deposits off shore. It is far better that we support New Zealand cooperatives and New Zealand mutuals because the profits stay in our community. 
Speaking of New Zealand – based companies I point out that Part 4 is another important part of the bill. It has to do with the Co-operative Companies Act. I hope that the Co-operatives Association will make a submission on the bill. I presume it supports the changes that are in this bill because again those changes will help to reduce compliance costs. It is vital that we support the cooperative sector because cooperatives are indeed the backbone of the whole economy. They are often under-rated and under-appreciated but when we think about it we realise our largest business in this country Fonterra is a cooperative and I think our second or third largest—when the three companies in the group are added together—is a retail cooperative the Foodstuffs group. There are a lot of cooperatives now operating in the primary sector. Ravensdown Fertiliser Cooperative is another example of a cooperative and there are others in the retail sector. They have a very important role to play and it is good to see that this Government is responding to the wishes of those organisations through the introduction of this bill. 
I want to say one last word to Tony Ryall whom I heard speaking when I came into the Chamber. I think he was being rather disingenuous in suggesting that the bill should contain a whole lot of other amendments when he fully understands it is not possible to bring them in under the appropriate Standing Order that this bill has been introduced under.