Regulatory Reform Bill

Hon RODNEY HIDE (Minister for Regulatory Reform) Link to this

I move, That the Regulatory Reform Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Commerce Committee. The Regulatory Reform Bill amends 13 Acts of Parliament and is designed to reduce compliance costs and the regulatory burden on business, which will be a good thing. It is intended that the bill be divided into separate bills in the Committee of the whole House.

The Acts put forward for amendment by Ministers from eight portfolios have been identified through a number of avenues, including through the regulatory scanning exercise undertaken by Government departments. Agencies have been asked to undertake scanning of their legislation as part of the commitment this Government has to the Government Statement on Regulation: Better Regulation, Less Regulation. The statement was announced in August 2009 and sets out the Government’s commitment to introduce new regulation only when satisfied that it is required, reasonable, and robust, and to review existing regulation in order to identify and remove requirements that are unnecessary, ineffective, or excessively costly.

This is the second bill of what I intend will become an annual bill in this House. It forms a key part of the Government’s commitment to an ongoing process for amending legislation to remove requirements that are unnecessary, ineffective, or excessively costly, and sometimes all three. Such an omnibus bill will ensure that the smaller regulatory fixes do not fall off the legislative agenda, and are able to be progressed in a timely fashion to deliver the flow-on benefits to business and to the economy. A key benefit of this bill is the efficient, cost-effective method of collectively amending the 13 Acts through a single omnibus bill, without having to proceed with 13 separate pieces of legislation.

The maintenance of a quality regulatory environment in New Zealand requires a body of legislation that is easy to use, up to date, and fit for purpose. The changes proposed in this bill cover a diverse range of policy areas and legislation, but they are all aimed at the same objective: reducing the compliance burden on business. This objective is a unifying theme of the clauses in the Regulatory Reform Bill I am introducing to the House today.

In October 2009 I wrote to all Ministers requesting suggestions for amendments to discrete pieces of legislation that would reduce the compliance burden upon business and that were suitable for inclusion in the omnibus bill. I would like to thank my colleagues who have responsibility for the Acts put forward for amendment in this bill: the Hon Simon Power, Minister of Commerce; the Hon Steven Joyce, Minister for Communications and Information Technology; the Hon Phil Heatley, Minister of Fisheries and Aquaculture; the Hon Kate Wilkinson, Minister for Food Safety and Minister of Conservation; the Hon Maurice Williamson, Minister for Building and Construction and Minister of Statistics; and the Hon Nathan Guy, Associate Minister of Justice and Minister of Internal Affairs. The prioritisation of these amendments will contribute to businesses being better able to reach their full potential and the greatest opportunity for growth.

Some of the changes are aimed at removing requirements and streamlining processes. These include amending the Companies Act 1993 to allow companies to choose whether to use electronic shareholder participation. It is estimated that this change could save New Zealand companies a total of $1.5 million each year. Amending the Agricultural Compounds and Veterinary Medicines Act 1997, the Animal Products Act 1999, and the Wine Act 2003 to align and streamline the procedures for recognition under three food safety related Acts will save businesses from potential compliance costs of approximately $100,000 a year. People or agencies wanting recognition for functions such as sampling, testing, analysing, evaluating, and verifying compliance under these Acts should find the process simplified, and should find being recognised under more than one Act significantly less complicated.

The bill will amend the Fisheries Act 1996 to allow for the consolidation of Gazette notices to make it easier for commercial fishermen to find out which restrictions apply to particular stocks. Consolidation of Gazette notices will mean there could be one notice, for example, to cover all quota management stocks, and set the total allowable catch and the total allowable commercial catch for all stocks. This will reduce the time and resources needed by businesses to determine compliance.

Several changes are aimed at increasing flexibility. These include changes to the Films, Videos, and Publications Classification Act 1993 to modernise labelling requirements by allowing rating and classification labels to be printed. At present, distributors must arrange for the imported DVD or computer game to be unwrapped, to have the printed slick—the leaflet or notice containing information about the DVD or computer game we see inserted in any sleeve or display case—removed from the case, a label placed over the printed foreign classification label on the front, and then the slick put back into the packaging. This bill will mean that labels can, in addition to being physically attached, be printed directly on to slicks. Giving businesses flexibility in whether they print on or affix an adhesive label allows choices to be made about the most cost-effective method for supplying the rating or classification label. This will reduce compliance costs by an estimated $2.4 million in the first year, and $3.1 million in year 5. Apparently, representatives from the industry have been coming to see Government each year for many, many years, asking: “Why is it that we have to put this particular sticker on when it could just be printed at the time of its manufacture?”.

The bill will amend the Unit Trusts Act 1960 so that financial statements and accounts can be distributed electronically. This will result in savings of printing and postage costs.

The Regulatory Reform Bill is just one of the essential measures needed to implement improvements to regulation in New Zealand. It forms part of the broader regulatory reform agenda that will improve the body of regulation in New Zealand. Last November I introduced the Regulatory Reform (Repeals) Bill proposing the repeal of 31 spent Acts. I am also preparing a Regulatory Reform (Revocations) Order, which proposes the revocation of spent and obsolete regulations. This set of legislative vehicles is designed to improve the stock of regulation in New Zealand, and will make sure New Zealand has an evolving regulatory environment that is relevant, up to date, and best placed to meet the dynamic economy that will help New Zealand grow. Thank you.

Hon LIANNE DALZIEL (Labour—Christchurch East) Link to this

The genesis of an annual bill that improves the regulatory environment was, in fact, the Quality Regulation Review, which I led in my role as Minister of Commerce. Arising out of the Quality Regulation Review was a desire from business to see continuous quality improvement from the Government, with the ability to tidy up features of different aspects of the regulatory frameworks without having to wait for the individual department or, indeed, the Minister to give it the legislative priority it needed. This was the reason I called the annual bill we committed to in Government the Regulatory Improvement Bill, because I believe that the principles and guidance that are enshrined in the Code of Good Regulatory Practice should be embedded within every layer of Government. That is something I always believed in as a Minister, and that I believe in today. I believe that we must commit to that if we are going to make a difference in the long term.

The Minister is calling this bill a Regulatory Reform Bill; I assume that he has just simply changed the name to the Regulatory Reform Bill, as opposed to the Regulatory Improvement Bill. I deliberately chose “Improvement” because I wanted the focus to be on continuous quality improvement. That also suggests to me that the Minister was not prepared to highlight the fact that this bill is actually late. If it were called the Regulatory Improvement Bill it would have been the No. 2 bill, and that would have highlighted that despite the fact that we have the country’s very first Minister for Regulatory Reform, the Government has not met its very first target, because this year’s bill should have been bill No. 3. There should have been one in 2009, there should have been one in 2010, and we should be dealing with the third piece of tidy-up legislation at the beginning of 2011.

I will talk about the legislation this bill amends, and I particularly want to focus on the Takeovers Act 1993, which the Minister did not mention in any detail. I mention to anyone who might be vaguely interested in this debate and may, in fact, be interested in any Acts that will be amended by it that I am deeply disturbed, for example, that the Government made the decision to take the regulatory impact statements out of bills. It does mean that one has to go to the website of either Treasury or the Ministry of Economic Development to print them off. Of course, because so many Acts are being amended there are different regulatory impact statements for each of the bills being amended, but they make for fascinating reading. Some of these regulatory impact statements do not meet the standards of good practice around regulatory matters, which I find somewhat ironic. But there is more than one irony in the debate that we are having today.

I want to mention, for example, the changes to the Registered Architects Act 2005, which will hardly excite a lot of comment. The changes to the Act, as I read them, will reduce the cost of the complaints process from $33,300 per case to a mere $19,100 per case, and that is by removing the hearing processes from the investigating committee and disciplinary committee and replacing them with a hearing, if necessary, in front of the actual board itself on the report of the investigating committee. So a sensible proposal is being made. It seems like good sense to me, and what it will really do is knock the time off the investigation process and the hearing process, which sounds to me to be a good thing as well.

But there was this little bit that I thought was really interesting. I have had quite a lot to do with architects of late, given the circumstances down in Christchurch, and they might be interested in this. Architects will still pay the same fees, and the time taken to process a complaint will at least halve. This will give the architects in question more certainty about their future, but, I could say, less bang for their buck at the same time. So it will be interesting to know why they are not having their fees reduced, since there will be such a major cost saving to the Registered Architects Board. But I am sure that will come up at the Commerce Committee, which I chair.

I want to refer to the takeovers legislation, because that is the one that has excited the most public comment, and certainly in the New Zealand Herald this morning there was quite an article of substance on it. But before commenting on this specific issue, I wanted to use this as an opportunity to acknowledge the work of the Capital Market Development Taskforce, whose work is being recognised in the legislation that we have before us. It spent, I know, quite a considerable amount of time with the Takeovers Panel in order to establish what changes needed to be made to the panel’s arrangements in the code in order to facilitate the work that it was doing. It is good to see that some of its recommendations are finding their way into law through this particular process.

Of course the regulatory impact statement on this particular case has been helpful in identifying the magnitude of the change. Although I note that when referring to the cost of complying with the takeovers regime when the number of voting shareholders in the company is very small it says: “These costs are incurred on a transaction by transaction basis and do not occur frequently. These costs are not significant to the economy as a whole but are to the parties involved in the relevant transaction. Because of a lack of a mechanism to collect data it is unknown how many companies are affected by this problem.” So sometimes the Minister for Regulatory Reform has a habit of overstating the impact that a lot of these things will have.

I do not disagree with making some of the changes that are proposed to the law, but there is one that I really do want to deal with in detail, and that is the question of international comity between New Zealand and any other country being added to the objectives of the code. I have commented before on irony in the debate today, and this is really where the irony kicks in. A National Government passed the Takeovers Act in 1993. In fact, I have been around so long that I sat on the select committee that considered the Takeovers Bill, as it was at that time. I wonder whether anyone in the House today remembers how long it took the Government of the day, the National Government, to allow a code to be written to give the Takeovers Panel some work to do. I wonder whether there is anyone in the House today who can remember how long it took the National Government to do that. I do not think anyone in the House has been here quite as long as I have. John Carter is in the House; he may recall exactly how long the National Government took to implement the Takeovers Code after passing the legislation in 1993. It is, of course, a trick question, because it never did. It never gave the Takeovers Panel a code to enforce. It did not empower the Takeovers Panel to write a takeovers code that would come into force. So for a number of years the head of the Takeovers Panel used to sign off on an annual report to Parliament, which was nothing more than a blank sheet of paper. So that is why it is ironic.

This morning’s New Zealand Herald states that the panel administers the Takeovers Code and can issue exemptions for companies looking to take over another business where it believes they are warranted. “Amid concerns about the Government’s proposal to partially privatise state-owned power companies, the Takeovers Act and code are seen as a key protection for retail investors and New Zealand’s wider interests. In combination with ongoing majority state ownership, the act—which requires any would-be purchaser of more than a 20 percent stake in a company to make an offer to all shareholders and secure at least 50 percent of it—is seen as a safeguard against the companies falling into the hands of foreign investors. Ministry of Economic Development officials said the amendment had been added to allow the Commerce Minister to take into account comity between New Zealand and any other country as an objective when formulating any recommendations relating to the code.” It is unfortunate that that is not what the officials advised the Minister for Regulatory Reform when they prepared the regulatory impact statement that went to Cabinet. They made it absolutely clear that this was about making it easier for the panel to provide exemptions in cases such as these. So I think that there is a very genuine concern about this.

I will comment on section 20 itself—the objectives of the Takeovers Code. These are all listed in the regulatory impact statement encouraging the efficient allocation of resources, encouraging competition for the control of specified companies, and the list goes on. But the second paragraph from section 20 of the Takeovers Act is missing, and it is relevant: “In formulating recommendations … it is for the Minister to determine the weight that should be given to any particular objective …”. The Minister of Commerce is the Minister for State-Owned Enterprises, and we should be worried.

TIM MACINDOE (National—Hamilton West) Link to this

The National-led Government is delighted to see this important measure introduced into the House this afternoon. I start by acknowledging the work that the Minister for Regulatory Reform and his officials have completed in the 2¼ years since the current Government came into office. It is a significant body of work—

Hon DAVID PARKER (Labour) Link to this

As the Hon Lianne Dalziel has previously said, the Labour Party supports the Regulatory Reform Bill. I am not sure whether she mentioned it, because she was probably a little modest, but she was the Minister of Commerce when we, as the last Labour Government, decided that it was necessary to have an annual Regulatory Improvement Bill, which has now had its name changed to the Regulatory Reform Bill—but it is the same beast. Obviously, it is always necessary for Governments to look at what is over-regulated, what regulations have become outdated, or what regulations go too far. As the previous speaker, Tim Macindoe, pointed out, there was a regulation that went too far in respect of the packaging of some products. It was not going to ban all the soap powders or detergents, as the previous member suggested, but there was—

Dr RUSSEL NORMAN (Co-Leader—Green) Link to this

I rise on behalf of the Green Party to speak briefly on the Regulatory Reform Bill. A bill like this raises the question of the role of regulation in our economy and also in our society, more broadly. I think it is hard, when having this debate, not to talk about the leaky houses disaster in New Zealand. The leaky houses disaster was a result of lack of regulation. It was driven by an ideological agenda, a so-called anti - red tape ideological agenda in the early 1990s, caused by the 1991 Building Act that was brought in by the incoming National Government.

I have had a chance to look at some length at some of the documents around the 1991 Building Act, in order to engage in the debate around the role of regulation. What people often forget when they talk about the inefficiencies of regulation is the astronomical cost of lack of regulation. The leaky buildings crisis will cost our country something like $20 billion—somewhere more than $20 billion—in order to repair the buildings that were leaky and damaged as a result of lack of regulation.

In terms of the debate around what kind of regulation we should or should not have, what sits behind this bill is an anti-regulation position coming particularly out of the 1980s and 1990s, which the ACT Party obviously goes back to. Coming out of that is the knowledge that in the past this kind of ideological position has caused massive damage to the New Zealand economy. When we say a cost of $20 billion, it is difficult to put that into a debate; it sounds like just another number. We can think of some of the examples given earlier in this debate. People said that such and such a regulation cost the country a few million dollars, or that something might have cost the country $10 million if so and so had not gone ahead with such a regulation. But lack of regulation of the building industry cost our country more than $20,000 million; $20,000 million worth of damage was caused by the ACT Party and National ideology as it was back then in the early 1990s, and which is trying to get a life of its own again here.

When National introduced the Building Act in 1991 during the last time it was in Government, Treasury papers that sat behind that Act were very clear. They said that we did not need regulation of the building industry and we specifically did not need regulation around trying to make sure that building standards remained high. They said that the market would sort it out, and that if there were any issues about shoddy building the courts would sort them out. This is exactly the wrong framework to have when it comes to dealing with the question of regulation. For this bill to come up again and for the National ideology from the 1990s to come back again and live again, like some monster from the deep, it seems to me extraordinary that there has not been a learning from the 1990s about what happened, given the cost, the phenomenal cost, to our country. This cost is something like five times the cost of the Canterbury earthquake.

People have talked a lot in this House about the cost of the Canterbury earthquake—maybe $4 billion to $5 billion. The decision by National in the early 1990s not to regulate the building industry, not to have proper regulation of the building industry, has cost our country four to five times the cost of the Canterbury earthquake. It is phenomenal, when we think about adopting the wrong ideological framework. Adopting an anti-regulation ideological framework seems like the world of ideas. People spruik on about this, that, and the other; it is just an idea.

Ideas can be immensely damaging, and in this particular case the ideas coming out of Treasury—at that time headed up by a man who has since become an ACT Party candidate—the anti-regulation ideas that ACT has promulgated and that find their home in parts of National these days, have cost our country more than four to five times the damage caused by the Canterbury earthquake. The Canterbury earthquake was a massive natural disaster, yet the ideas coming out of the far right and finding a home in ACT and, to some degree, in National are a calamity of a scale four to five times greater than the disaster that was the Canterbury earthquake.

Think of all the people in our country who have had to live inside leaky houses, and with all of the fungi that grow inside leaky houses. People have probably died as a result of living in leaky houses, whereas fortunately nobody died in the Canterbury earthquake. Those ideas that form part of the debate around this bill as to the role of regulation in our society have been immensely damaging to our country. So I say to the Government that when it plays footsie with the ACT Party, using these kinds of ideas, and when we are looking at a bill like this, do we really want to relive the leaky houses disaster all over again? Those anti-regulation ideas that sat behind the leaky housing disaster were incredibly expensive and damaging to our country.

That would be my contribution to the debate on the Regulatory Reform Bill. We need to have this debate in a mature way and an acknowledged way, rather than simply using ideological slogans like “too much red tape”, which is about as far as it gets with the ACT Party. Actually, red tape could have saved our country $20 billion in the cost of the leaky houses disaster, but we decided to let just anyone build a house. I mean, who needs rules to keep out the water? Why should we have a rule? This is what the National Government said: “Why should we have a rule that says that houses should keep out water?”. That was what it said in the early 1990s. National asked why we should have such a rule. It turned its back on having a rule that stated that houses should keep out water. Actually, that is quite a good rule to have. The leaky houses disaster proved why it is such a good rule, and $20,000 million later it is time to acknowledge that regulations play a positive role in our society. It means that houses keep out rain and do not rot from underneath people. In terms of framing the debate on this bill, I say: think about regulations. They can play an extremely positive role, and save us many tens of billions of dollars in costs and an immense amount of misery.

AMY ADAMS (National—Selwyn) Link to this

It is good to take a call this afternoon on the Regulatory Reform Bill. It is good because I think it is part of a much bigger debate we have been having in this House over the last week about the future of the country, where we are going, the creation of jobs, and the things that this National-led Government is doing to make sure those jobs are created. In that context, I think it is worth taking a moment to look back over the last 5 years of the previous Government, where we saw the growth of a quarter of a million jobs in the non-productive sector. But, scarily, over the same period we saw a loss of 50,000 jobs in the export sector. So all the time that that non-productive sector was growing and creating ever more of a drain on the taxpayers’ purse, what should have been the engine room of our economy was shrinking and shrinking, to the point that that engine room is now really nothing more than an auxiliary motor.

Turning that round is an absolutely key part of getting this country back into the game. That is a multifaceted response. There is not one single thing that can be done that suddenly fires up the export economy, the problem is solved, and away we go—there are any number of things. I think all of those things can be broadly categorised as putting confidence back into the business sector that it can invest in New Zealand, grow its businesses, create jobs, and take people on. At the end of the day if there is not that sort of confidence that New Zealand is a good place to do business and invest money, the business sector will not be creating jobs for New Zealanders, in order to raise their incomes and their standard of living. So that has to be a big part of the plan. We have seen a lot of it already from this National-led Government. We have seen Minister Wilkinson give effect to the 90-day trial period, and the response from that has been fantastic. We know that it has already created 13,000 extra jobs. Businesses are saying that it is good, it has taken a bit of pressure off them, and they can now have the confidence to get in and use the trial period to create jobs for New Zealanders. That is what will give New Zealanders in this country some long-term security.

I think we can see a step in that same direction in the Regulatory Reform Bill. We are saying that this is a Government that will not burden people with costs for the sake of it. The Government will look at costs and if they are excessive and outweigh the benefit to society, then it will go back and ask whether we need this. I think that asking that question all the time, whether we actually need this, is fundamental to what any good Government should do. I will always support a Government looking very closely at the costs that it imposes on hard-working New Zealand families and businesses. Members should remember that most of those businesses are very small. Let us not get caught up in thinking that they are large, faceless corporations. Most New Zealand businesses—the vast majority—are small, family run enterprises. It is about the costs and the hoops they have to jump through time and time again, just to get through the day. Certainly the process of reviewing those costs and making sure they are appropriate is, I think, absolutely key to a sustainable recovery.

It is not surprising to me that the Green Party is not supporting the bill. It seems in their nirvana nothing at all would be allowed. The interesting thing is that one has to create business activity and wealth to pay for all the social spending that the Greens constantly call for. So I think frankly it is irresponsible to stand and say: “They shouldn’t be allowed to do this. We should crack down on this. We should stop that. We should regulate that out of existence.”, but at the same time continue to call for ever-increased spending on handouts.

One final comment I will make in this space—and it is perhaps a philosophical one—is that it always seems to me that excessive regulation and the drive for more and more regulation is the expected flow-on of a complete abdication of personal responsibility. We see this all the time, do we not? When something has gone wrong, the first thing we will often hear is someone saying: “There should be rules stopping that. It shouldn’t be allowed.” Often there is a valid question to be looked at, but often we have to say that hard cases make bad law. If we react to every single thing that goes wrong by making an excuse to wrap up an industry in even more red tape and regulation, then we are going to wrap ourselves into a completely catatonic state as an economy. I think that guarding against the overuse of the power we have, trying to remove any possibility of any harm to any one from any thing, which seems to be the endgame for the nanny State and its left-wing supporters, is something we have to guard against. The real endgame of that approach is a catatonic economy that will not create jobs and will not provide for its future. So, yes, regulation is essential and we do need to have it. But, equally as important as our power to create it is our power to constantly be vigilant about whether the regulations we have in place are necessary, productive, and to the ultimate benefit of New Zealanders. I am very happy to support this reading of the Regulatory Reform Bill.

CLARE CURRAN (Labour—Dunedin South) Link to this

It is nice to hear the member opposite Amy Adams being a bit philosophical about things. It is just a pity that she was rewriting history throughout the few minutes when she stood up and spoke. As she well knows, and as the rest of the members of this House know, Labour supports the Regulatory Reform Bill because it is essentially a Labour bill. It is nice to hear that Amy Adams thinks regulation is important, albeit only sometimes, and that regulatory reform and improvement is also important.

As has been pointed out earlier, this omnibus bill is an outcome of the Quality Regulation Review, which was led by the Hon Lianne Dalziel when she was the Minister of Commerce. It is not an idea that came out of the brain of the Hon Rodney Hide. Lianne Dalziel introduced that first Regulatory Improvement Bill, which I spoke on in the House last year, which was an omnibus bill, as well. It was passed by the Government across the way, which then took credit for it. At that time Rodney Hide said that the Government would commit to an annual bill of this nature, and that is what we have here today. But instead of calling it the Regulatory Improvement Bill (No 2), he has called it the Regulatory Reform Bill and is taking credit for the concept as well as the content. I put on record that the concept was, and remains, a Labour initiative.

As I said before, the bill was the result of the Quality Regulation Review. That report was released in September 2008 after a 15-month review process. The Quality Regulation Review addressed the regulatory barriers to business growth, which Labour was absolutely committed to looking into and improving upon. It was a broad review. It looked at anomalies, inconsistencies, and duplication across the Government’s regulatory framework. As well as correcting some errors, the review aimed to develop ways of ensuring that new rules were efficient, from a business perspective.

Around that time Labour also launched a 2-year trial of a business cost calculator in order to quantify the compliance costs of regulation. That was a really important new initiative. It was a 2-year trial. The calculator was a software tool that allowed Government officials to calculate the true cost for businesses of any regulations that they were recommending to Government. The tool was designed to assist policy makers to create higher-quality regulation in a uniform and efficient manner, which are all the principles that underpinned the Quality Regulation Review. At the time it was launched under the previous Labour Government, Business New Zealand chief executive Phil O’Reilly said that it would help sharpen the focus on what it costs business to comply with new regulation. Those costs include fees for consents, payment for signs, manuals, and software, or professional fees and staff time to perform those functions—all good practice and all things the previous Labour Government was committed to doing.

Annual regulatory improvement bills are a sensible way of ensuring quality regulation, but although those changes may be helpful to some businesses, most of the changes in this bill are, as Chapman Tripp has said, small and technical in nature—hardly slashing red tape, as Rodney Hide announced in December. In an article on its website entitled “Red tape slashed by regulatory reform bill—or snipped?” of 22 December last year, Chapman Tripp wrote: “The Regulatory Reform Bill will ‘slash red tape’, according to its sponsor, Rodney Hide. And indeed the Bill will remove a lot of unnecessary bureaucratic clutter. But, almost by definition, most of the changes—while useful—are small and technical in nature. In our view more substantial amendment to the Companies Act 1993 is required to fix long-standing technical gaps and to catch up with the modernisation of company law in other countries.” Chapman Tripp thought that sounded more like a snip than a slash. Another argument is to question whether this bill will lead to quantifiable growth in the economy. Does the Government have nothing better to do? As my colleague the Hon Lianne Dalziel has said, why is there not more in it?

Let us look quickly at the summary of changes. The bill will amend the Companies Act to allow companies to choose whether to use electronic shareholder participation; it will amend the Unit Trusts Act 1960 so that financial statements and accounts can be distributed electronically, which will result in cost savings to unit trusts; it will amend the Films, Videos, and Publications Classification Act to modernise labelling, which has been estimated to reduce compliance costs by $2.4 million in the first year and $3 million in the fifth year; and it will align and make consistent all food-related legislation. We do not have any issues with any of these amendments, because we were the ones who initiated them.

I will talk briefly about the electronic documentation, voting, and meeting participation aspect of the legislation because those changes were sought by the Listed Companies Association in 2009 and have been more recently endorsed by the New Zealand Shareholders Association. Those changes will reduce compliance costs and bring New Zealand into line with other jurisdictions. The Listed Companies Association—not the Minister—estimated that aggregate cost savings of around $1.5 million a year could be generated among listed companies, assuming a 30 percent uptake of electronic voting facilities and use of those facilities for one voting process per shareholder per year. This, again, builds on the work of the previous Labour Government, which was done by a former Minister of Commerce Paul Swain in 2005. He noted that an information revolution was taking place and that the technological and innovative capability of New Zealand businesses and citizens would be the key to ensuring our ability to compete in world markets, and our enthusiasm and capacity to exploit the opportunities offered by the 24-hour-a-day, 7-day-a-week global economy. This measure is building on this capability. It sounded in the previous speech as though somehow this bill was all a new idea and a new initiative, and that somehow the National Government had come up with it all itself.

We support it, as we have said, but I note two concerns. Firstly, I echo what the Hon Lianne Dalziel said about the removal of the regulatory impact statements from bills. Requiring people who are looking at proposed legislation to go to another ministry or department website to find the regulatory impact statement is not open and transparent government; it is government that wants to obfuscate and remove any potential criticism of its legislation from public scrutiny. Yes, one can still get the regulatory impact statement, but if one does not understand how the process works or know where to look for it, then one will not find it. I put on record my concern about that matter.

Secondly, there are concerns about aspects of proposed amendments to the Takeovers Act, as my colleague has previously talked about. We will be looking closely at those changes when the bill gets to the select committee. I note the issues raised by the reporter Adam Bennett in this morning’s New Zealand Herald in a piece entitled “Planned ‘friendly’ amendment to Takeovers Act sparks worry”. Essentially, the concern was raised that “As the Government seeks to sell the public on state asset sales it is amending a key protection for small investors which is feared may allow company takeovers to go ahead in order to maintain friendly relations with other countries.” This is a serious concern. Essentially, it “would enable the Takeovers Panel to take into consideration ‘international comity’ or friendliness between nations. The panel administers the Takeovers Code and can issue exemptions for companies looking to take over another business where it believes they are warranted.” A company law expert and the Shareholders Association have expressed a lot of concern about this amendment. We think it is an important issue in relation to the ability of foreign investors to take controlling stakes in local assets, and we note that we will be looking closely at it in the select committee.

We support this bill, primarily because it builds on the work done by the previous Labour Government. It will remove duplicating and overlapping regulatory requirements, it will design safe harbours, and it will allow more rigorous risk analysis when developing and enforcing law and provide tailored information on regulatory requirements to meet the needs of business. I look forward to its coming to the select committee.

AARON GILMORE (National) Link to this

It is a pleasure to speak on the Regulatory Reform Bill, which is yet another plank in the National Government’s economic reform package. I will first talk about one of the wonderful things about this bill. A whole lot of particular examples in this bill actually help small to medium businesses and large businesses address their costs, help employ more people, and get our country growing again. I will spend a fair bit of my time on one particular example that exists in this bill, which I am very happy to see in the bill. My local video shop has had problems with the labels that go on its DVDs. One wonders what sorts of problems there would be. Well, quite a large Deaf community surrounds that video store. One of the particular issues that people in that community have is the ability to read and access the labels that exist. The labels have had to go on the inside cover of the DVDs; they have had to be affixed to, rather than displayed upon, the DVDs.

One thing this bill does is allow some changes to the labelling that goes on videos and DVDs at the local video store, and I think that is a good thing. It is an example of the little extra costs that that video store owner and many others up and down the country will no longer have to incur due to double labelling, which takes time and effort, and is a right utter pain—in his own words—for customers. This little change in itself might not mean anything to the people listening tonight, unless they are particularly affected by that change, but a change of two or three small words in a bill can mean a massive reduction in cost for those people in that community. I am very pleased. I spoke to some of the people affected and told them about this change. They were ecstatic. In fact, I had to calm them down and tell them that I was not responsible for the change. But they promised me that they were very happy with the change and they thought it was a wonderful move. That change is made by a small clause in a bill that has a significant number of changes.

This is the second regulatory reform bill that has been brought before this House. Last year we spoke about some of the changes in the first bill that related to the requirements to audit the accounts of companies of a certain size. One of the benefits of that change was a saving of $10 million to $15 million a year in terms of audit fees that would no longer be required for certain types of statutory accounts. I am pleased to report that I have spoken to a number of leading audit firms up and down New Zealand, and, sure enough, that is what has happened. The auditors’ fees have dropped, the accountants are very grumpy, and the companies that pay the audit fees are very, very happy. I think that is a wonderful thing. That money can be better spent on employing people, innovating our businesses, and growing our economy overall.

Another example, which the previous speaker spoke about, is electronic filing and the receipt of documents. To most people, that seems an absolute given. If one wants a piece of paper or a bit of information these days, one goes to the Internet and asks for it. One literally puts it into one of the various search engines and one finds it. As a result of that, one is sent things via email. The stupidity of the historical nature of some of the details of the law meant that that could not happen. That is another example of some of the strangeness that exists due to bits of regulation not keeping up with the way the economy has been progressing. I think that is a classic example of why a regulatory reform bill needs to be undertaken on an annual basis. Technology moves very, very quickly. Mr Foss, who is sitting in front of me, has a new iPad, which is a wonderful piece of technology. I know he speaks very well of it and of some of the applications that exist. Three years ago such technology did not exist, and the ability to access certain documents as a shareholder would have been very difficult. I know that Mr Foss and other people around the country would very much welcome the ability to access shareholder voting and other documents electronically, rather than have to get weighty bits of paper in the post, which is estimated to cost in the order of millions of dollars. Those millions of dollars saved would be able to be reinvested in those things that matter, such as training, building people’s skills, helping innovation, and employing people in many other forms.

One of the other aspects that members from the Labour Opposition have touched on that I want to talk about is the issue of the removal of the regulatory impact statement from the bill. The regulatory impact statement is a classic example of regulatory reform in itself. Regulatory impact statements are publicly available to anyone who wants to find them. The issue is whether they have to be attached to every single bill every single time. If they were, then that would mean that every single bill would be longer and weightier. Not everybody wants to read the regulatory impact statements, but they are publicly available and they are easy to find for those people who are interested in them. Not every person is interested in reading those documents, but they are a useful document to read.

Those are examples of reduced costs and administration that occur from a need to have regulatory reform and an ongoing process that exists. I will talk a little bit more about some of the other detailed issues. We have heard previous speakers from my side of the House talking about some of the crazy regulations that have existed and that needed to be changed. Examples were given particularly around offensive products that in their mind might be seen as dangerous, such as Toilet Duck and Persil Surf. If they are the sorts of products that have the potential to be seen as dangerous and difficult, in reality all that was really needed was changes in terms of the rules and regulations around labelling. That made some sense. But to take it to the far extent that the previous Labour-led Government did seemed a little bit over the top and related to a whole lot of unnecessary costs being incurred, which did not make a lot of sense, at all.

The bill overall is about the impact of reducing red tape and costs to businesses, particularly those small to medium sized businesses out there. I look forward to these bills coming forward every year and to being able to stand up every year and say that last year we made a change to a regulation and that this is what happened to certain businesses. My family are involved in many small businesses, and every year they moan and groan about various bits of paper they have to fill in or bits of regulation they have to deal with. They are very unhappy about it and I get it in the ear every family birthday, wedding, Christmas, and every other occasion. Having 56 cousins, I get it quite a lot. The reality is that these sorts of changes every year will bring about additional positive changes to reduce the costs to Kiwi businesses so that there is more money to help employment and innovation in New Zealand. I commend the bill to the House.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Mr Assistant Speaker. Kia ora tātou katoa e hoa mā kei roto i te Whare i tēnei ahiahi. The Māori Party entered into an arrangement with the governing party, as members are aware, basically to be at the decision-making table in order to do all we can to make a difference in the lives of tangata whenua of Aotearoa. As provided in the Treaty, tangata whenua should have an equitable say in the decisions that affect them. A key principle for us is the need to have in place robust and accountable work practices by local government and regional authorities when working with mana whenua. We want to ensure that local governments acknowledge the mana and authority of mana whenua, engage with Māori communities, build relationships, and advance Māori representation. In terms of the Regulatory Reform Bill, in the broadest sense we support the approach of redoing existing regulations to remove requirements that may be unnecessary, ineffective, or excessively costly for business.

The Regulatory Reform Bill in its most basic form is about amending 13 Acts, as other members of the House have spoken about this afternoon, basically to make small gains in order to improve the quality of the regulatory environment. As a principle, we welcome the context of reducing an overly heavy compliance burden upon businesses, though we want to ensure that the disaster of leaky homes is not repeated because of reduced regulations.

I say all of this from the particular perspective of Māori entrepreneurs. It is well known that if the Māori nation was assessed as a country, Aotearoa would rank as the seventh most entrepreneurial nation in the world. In fact, when looking at the group of Māori between 35 and 44 years of age, it could be said that one-third of an entire generation of Māori start their own business. For those in the senior stakes, apparently, Māori aged between 55 and 64 are some of the most entrepreneurial elders across the globe. The rate of early age entrepreneurship amongst this group is about double the average. But somehow between start-up and survival, something goes wrong. We call it the liability of newness, to describe the low chance of survival that so many Māori entrepreneurs experience. Businesses are said to have survived the liability of newness when they persist in owning and managing an established business for more than 3½ years. Although one in four Māori expects to launch a start-up venture in the next 3 years, only 6.5 percent of Māori entrepreneurs are in the category of owning and managing a company that has paid wages or salaries for more than 3½ years.

We come back to the Regulatory Reform Bill whilst thinking about the major issue for Māori businesses, which is the sink or swim survival strategy that comes with starting up a new business. The bill seeks to amend a range of small regulatory fixes, which will make life easier. It clarifies the Unit Trusts Act, for example, so that financial statements and accounts can be distributed electronically, it amends the Agricultural Compounds and Veterinary Medicines Act to remove the requirement for the details of product manufacturers to be included on the public register, and it will impact on the Companies Act 1993 to allow companies to choose whether to use electronic shareholder participation. A whole lot of other amendments are in a similar vein, but I will not touch on them too much, because some of them have been spoken about already. All of these things are hardly breaking news, but we hope the changes are not merely cosmetic but actually help to increase productivity for Māori businesses and allow them to focus on their business rather than on fussing over compliance costs. We will be supporting the bill at the first reading. Kia ora tātou.

STUART NASH (Labour) Link to this

I stand in support of the Regulatory Reform Bill, as does everyone in the Labour team. As has been noted, this reform process was started by Lianne Dalziel. The process was well implemented and was taken over by Rodney Hide. The least that he or the Nats could do is to give credit where credit is due, as we always do.

The bill changes 13 Acts and makes doing business a little bit easier. It is one of the standard processes that go on. A lot of legislation goes through the House every year, and as the nature of things changes, so does the legislation need to change. It becomes slightly outdated. There is no point in repealing Acts and rewriting them a lot of the time, so the Regulatory Reform Bill is the sort of bill that comes in to amend them.

I will pick up on a couple of points made by a couple of the National speakers. Aaron Gilmore, who is a man who knows a lot about business, stood up here and said the bill is part of a package of Government economic reforms. I ask Mr Gilmore where National’s plan is for economic reform. I also ask whether the National Government is really working for all New Zealanders. Mr Gilmore stood up here, said this bill is about National’s economic reforms, and talked about how important it is. He then talked about the owner of a local video store. I pay no disrespect to the owner of Mr Gilmore’s local video store, but in fact many businesses of New Zealand are struggling at the moment. One has just to walk down the main street of Napier to see how many retailers are struggling, let alone manufacturers, etc. To put things into perspective, the Government and the country are facing much bigger, much graver, and much more serious issues than Mr Gilmore’s video store faces.

Mr Gilmore then went on to talk about Mr Foss’ iPod.