Hone Harawira: Insolvency Law Reform Bill
Hone Harawira; Maori Party Finance Spokesperson
Insolvency Law Reform Bill; Second Reading
Tuesday 5 September 2006
Mr Speaker, this Bill assumes we need change because the current insolvency law framework isn’t working properly, and that everyone is losing out, particularly with the growing number of businesses going under. And so Mr Speaker, as with every other issue the Maori Party addresses, we want to look at the bigger picture in considering the changes being proposed here.
What changes are needed to best support economic advancement and prosperity for everyone in Aotearoa? Indeed, in terms of this Bill, what changes are needed to help people who have gone bust, get up and get going again?
Mr Speaker, in speaking to this Insolvency Law Reform Bill, I’d like to paraphrase the words of one of the world’s greatest citizens - Dr Martin Luther King.
When the architects of this great land signed up to Te Tiriti o Waitangi; they were signing a promissory note to which every citizen of Aotearoa was to fall heir; a promise that all peoples of this land would be guaranteed inalienable rights.
It is obvious today that New Zealand has defaulted on its promissory note insofar as her citizens of colour are concerned, for instead of holding this sacred obligation, Maori have been given a bad cheque, a cheque that has come back marked “insufficient funds”… But we refuse to believe that the bank of justice is bankrupt”.
M Speaker, we come to the debate on this Bill with those words ringing in our ears.
How can we say the bank of justice is pushing Maori to the brink of bankruptcy when there are still many Maori workers who are under-utilised?
How can we say the bank of justice is pushing Maori to the brink of bankruptcy when the massive levels of unemployment for Maori can be described by the Business Roundtable, as‘both economically wasteful and socially damaging”?
Mr Speaker, make no mistake. Like the proposer of this Bill, we welcome the introduction of systems for dealing with bankruptcy and imposing minimum costs without stifling innovation.
These are positive and practical steps to help creditors get their money back through: more flexible ways of dealing with bankruptcy; simpler and easier enforcement methods; and early intervention; and we support that.
But the bigger question remains, and an article by the Chairman of the New Zealand Business Roundtable in yesterday's Dominion-Post summed it up:
“Today the general unemployment rate is down to 3.6% yet the Maori unemployment rate remains over 8%, the same as the general rate in 1994. Worse, the Maori youth unemployment rate is a tragic 18%. Yet how rarely do we hear politicians and commentators saying this is unacceptably high?”
Well this is one political party; and we are four politicians who have been saying for the last twelve months, that Maori unemployment“is unacceptably high”.
So when we look at this Bill, surely the most important thing to look at in terms of these changes, must be to try to prevent financial strife in the first place. But our current tax laws themselves, are a big part of this strife - too many, too costly and too clumsy - it’s no wonder more small businesses don’t fall over.
We need to review our business tax system to help businesses grow, just as we also need to support growth in employment, higher wages, investment, research and development, and innovation. And if that means having tax structures in place to ensure we aren’t excessively penalising business failure, then so be it.
As part of that review, we must also ask why the government insists that they always be first in line to get their money back, and everyone else can wait. We know that this clause won’t be changed by this bill - hence our asking about us getting a bad cheque, one that has come back marked“insufficient funds”.
Mr Speaker, we agree with the amendments to the ‘voluntary administrative regime’, where a bankrupt company voluntarily puts its affairs into administration to either help save the business, or help the creditors get a decent return. But we know that submitters to the select committee were also concerned that giving the government first dibs on creditors money, would make it harder for businesses to agree to the voluntary administration process in the first place, when they were always going to be second in line.
And so Mr Speaker, we ask whether we may have missed an opportunity to consider something different to the current system where the Crown always has priority.
The Maori Party will support the second reading of this Bill, because we believe that:
small businesses will benefit from early intervention.
they will also appreciate the help to manage their way through hard times.
initiatives in the Bill will help many to stay afloat; or wind up with minimum costs and better returns for creditors, and allow people to move on.
it will help Maori to enhance their responsibilities, while maintaining an open door to future innovation and growth.
Mr Speaker, the Maori Party continues to“defend Maori rights and advance Maori interests, for the benefit of this great nation of ours, Aotearoa” because, although things are tough, just like the great Dr King, we too“refuse to believe that the bank of justice is bankrupt”.