Dalziel Lianne: Insolvency Amendment Bill — Third Reading 
Dalziel Lianne: Insolvency Amendment Bill — Third Reading 
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Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I rise to support the third reading of the Insolvency Amendment Bill. I do so with a sense of disappointment because as usual the Minister of Justice made statements in the House that he did not quite back up by working with Opposition members even when the suggestion was made to him that it would be a good idea to work more collaboratively on some of these matters as we did with the then Opposition when we were in Government. In the area of commerce where there is a need to rely on rules that are appropriate to the particular circumstances I think it is better to work together to get the rules right rather than to work in a less constructive way. So I express some disappointment in the Minister for adopting a somewhat arrogant approach which was not really the way he behaved when he was the Opposition spokesperson. 
The Opposition will support the bill because we agree with the primary provisions within it which are to amend the no-asset procedure to prevent the discharge of fraudulent debts under the no-asset procedure and to allow the official assignee to extend the time a person is under the no-asset procedure when late information in relation to a debtor’s entry including valid objections is received just prior to a debtor’s expected date of discharge. The Opposition also agrees with the provision that better protects the interests of creditors by strengthening the ability of the official assignee to cancel gifts in appropriate circumstances. I agree very much with the Government that there is a risk of people shifting their assets before moving into a no-asset procedure. That is a risk that is identified in the law in respect of bankruptcy and it is sensible that we amend the law in this way to resolve the same issue for the no-asset procedure. 
What concerned the Opposition with regard to this bill was the proposal to change the period of time that people on the no-asset procedure would remain on the public register. The House needs to understand that a very deliberate decision was made to have a very different time frame for being on the public register for a no-asset procedure because it is much more rehabilitative in its nature than bankruptcy. So it was really important for people to be on the public register for the no-asset procedure for a much shorter period than the period to be on the bankruptcy register. This bill changing the no-asset procedure from 1 year to 5 years actually brings that time period far too close to the bankruptcy provision of 7 years. That is the point of difference between the Opposition and the Government on that particular matter. 
It is really important for the House to understand that members of the Commerce Committee quite rightly asked submitters whether they could think of particular circumstances where people had got themselves into financial circumstances where they had up to $40000 worth of debt where they would be applying for the no-asset procedure and where there was not a sense of fault applying to the individual. We were all quite taken aback with the submissions we received from the citizens advice bureaus because they really did provide to us real-life examples of people who had done everything to protect themselves against the potential for harm financial loss and financial ruin—certainly in the case of one of the women who was provided as an example. We were all touched by those examples because they were not people who needed to be punished for doing the wrong thing. They had tried to protect themselves by taking out insurance which was challenged. The individual ended up with significant financial problems and on a benefit at a time when she had to meet the costs of an operation as well. People do get themselves into those circumstances and this no-asset procedure is designed to give them a helping hand to get over those circumstances and to then get on with their lives. That is why Labour when in Government designed the no-asset procedure—to give people this one-off chance to get their life back on track. 
I do not think it is ruined by extending it to 5 years but I would have preferred to see the Privacy Commissioner’s compromise position of 3 years. As she said that would be more consistent with the purposes of the procedure and more proportionate to the period for which individuals are publicly listed following bankruptcy. I think a compelling argument was put to us. 
The problem was that this bill was not before us for very long and we did not get a lot of time to look at it. In fact I think it is ironic that we are dealing with the bill now in October when we had to rush it through the select committee process in order to have it reported back to the House so it could be dealt with very quickly. It is probably a little unfortunate that we did not have time to carve off the no-asset procedure issue. I think we could have come to a better result if we had been able to carve it off and deal with it separately and I expressed that view in the second reading. 
I am not sure whether I was here for the Committee stage but certainly I now re-emphasise the view that sometimes it is better to look at the motive behind the different amendments and to see whether it is essential to deal with them in one moment. I can understand why the Minister included the no-asset procedure part in the bill. When one is a busy Minister and one has a passing train one tends to throw on an extra carriage if possible. But that particular part of the bill did not come from the same place that the other parts came from. The other parts came from detailed recommendations that had come from officials and that had been raised as serious issues that had arisen as a result of some unintended consequences of the no-asset procedure when it was brought in. We are happy to support those recommendations. 
The change to the no-asset provision came from somebody reading an article in the newspaper and deciding that it probably was not right that people were not on the public register for very long because the credit-rating agencies were not very happy about it. Well I do not think that is a very good basis for policy change. I think we need a far more considered approach. It would have been quite easy to carve off this part of the bill and report it back separately from the select committee. That to me would have had a much better outcome and would have been a much better process as well. We would have had the time to deal with that particular issue. I accept that it would have had to be dealt with separately because the Minister did make it very clear when he introduced the bill that the fraudulent debt write-off provisions would apply from the date that the bill was introduced not from the date that it was passed. In effect the passage of this bill will mean that those provisions are backdated anyway. 
There was not a need to be so quick on the no-asset procedure from a point of process nor from the point of recognising that there are people who get themselves into financial trouble through no fault of their own. I think of all of the people at the moment who have lost their money through Blue Chip and through financial investments in finance companies that they thought were secure investments. We are going to insist on this change to the no-asset procedure when basically they have to face up to the fact that they have got to that stage in their lives where they thought everything was secure only to find that it is not. 
With that expression of disappointment in the Government the Labour Opposition will support the passage of the bill and will hope that in future the Government will look to a better process for provisions like the one I have mentioned tonight.