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Harawira: Insolvency Bill

Thursday 26 October 2006

Insolvency Bill / Companies Amendment Bill / Insolvency (Cross border) Bill; Third reading

Hone Harawira
Tai Tokerau MP – www.tokerau.co.nz

The other day I was reading up about Frank Acheson; judge of the Tokerau (North Auckland) district, and president of the Tokerau District Maori Land Board in the 1920s.

Acheson had a whole host of ideas to address Maori poverty in the North. He believed that the only way to deal with it was to establish long-term development schemes through which Maori could develop their remaining tribal lands. One such scheme was a dairying project up Shane Jones’ way, in the far north.

His decisions as a Judge were variously described as innovative and alarming.

* He was involved in a series of Maori claims to the foreshore, and said that indeed the Native Land Court could issue title, a decision backed by the Appeal Court in 2003.

* He prepared a report for Ngati Whatua in which he concluded that the Orakei block should have been protected from alienation.

* He insisted in the Lake Tangonge case, near Kaitaia, that he could take ‘judicial notice’ of the Treaty of Waitangi;

* and in his 1929 judgement on Lake Omapere he ruled that Maori customary law recognised the ownership of lakes; that at 1840 the lake was the property of Nga Puhi, and that Nga Puhi's rights were protected by the Treaty of Waitangi.

Judge Acheson had his flaws, we all do, but for all that, Judge Acheson was a far-sighted and exceptional New Zealander who did his bit to create a history we could all be proud of.

That is of course until 1943, when he was suddenly, inexplicably, compulsorily retired … and why? The alleged insolvency and improper expenditure of the Tokerau District Maori Land Board.

What the case of Judge Acheson shows is that being innovative, is no guarantee to positive business outcomes; it also proves however, that if your spirit of enterprise takes you down a road scorned by the mainstream, then that mainstream will happily use any shaky financial situation, to shut you down.

Mr Speaker, what the Insolvency Law Reform Bill is supposed to do, is enable people like Acheson to deal with financial difficulty, while still being open and innovative; and the Maori Party welcomes that opportunity for people to bounce back from insolvency, and participate again fully, in economic life.

It was an opportunity Frank Acheson was deprived of - but his efforts to protect Maori customary land were right, and will be remembered through the commitment the Maori Party has made to repealing the Foreshore and Seabed Act, and giving the Maori Land Court the right to consider title applications again.

Mr Speaker, that opportunity to start again is a vital part of these three new Bills.

Of course, it’s better if you can stop people getting into strife in the first place, and we note the advice from the Federation of Maori Authorities who have spoken out continually, about how business success is limited by our draconian tax laws, which are so costly, and so cumbersome, that small businesses just can’t keep up.

FOMA also suggested that government set up some early intervention strategies for businesses in difficulty, and I can’t help but recall the findings from the Global Entrepreneurship Monitor, which found that although Maori are innovative and enterprising, only 37% of Maori businesses survive beyond three years compared with 62% for non-Maori.

If government were to adopt the FOMA proposals for early intervention, Maori businesses, and thereby the whole economy would benefit, so the Maori Party would be keen to see how the Minister responds to this positive suggestion.

On top of that of course there’s the dreaded IRD, who like to tax poor people for every dollar they earn while letting the corporates get away with their tax scams, who have also placed themselves at the head of the creditors queue when companies go belly up as well.

The Select Committee also recommended a number of options to make for easier wind-ups like allowing judgements to be handled electronically rather than in person, which reduces the human dimension, kanohi ki te kanohi, but provides another choice.

Mr Speaker, I’d like to return to the idea of Crown priority, whereby the IRD gets first cut in insolvency cases, and I want to raise this in the context of the Government’s recent victim, Te Wananga o Aotearoa, which was said to be near bankrupt last May; when the Minister of Education said that the Wananga was in danger of not being able to pay their staff, and a lot of their creditors.

In announcing the crisis, the Minister said “the financial situation at the wananga is so precarious that I am obliged to take all action available to me under the Education Act for the sake of the students, staff and creditors. To not do anything would be irresponsible”.

And yet a few months later, the Waitangi Tribunal found that in fact the government had breached its Treaty obligations by:

* forcefully limiting the type and range of education the wananga could provide;
* undermining the wananga’s authority;
* taking control of the institution;
* failing to ensure partnership agreements were concluded; and
* failing to ensure continuing consultation.

I raise the Wananga case because to have instituted Crown priority would have only made the problem worse, and ignored the real issues - the breach of the government’s Treaty obligations.

Mr Speaker, Crown priority was dropped in the UK in 2003 to encourage businesses to get back on their feet, and to ensure creditors got paid out as well; moves which the Maori Party wholeheartedly supports.

Our emphasis throughout this whole debate has been based on our kaupapa of manaakitanga; whanaungatanga; kôtahitanga; to limit the damage to positive business relationships, to support business rehabilitation, and to encourage people to get back on their feet rather than to punish them for their efforts.

We welcome the introduction of more flexible ways of dealing with insolvency; we encourage consideration of positive early intervention; we support a review of business taxes to facilitate greater employment, better wages, and higher investment, research, development and innovation; and we urge the government to heed the call of the Global Entrepreneurship Monitor to provide the support to Maori businesses after the initial flush of business start-up has worn thin, for, as Pita Paraone is happy to say, “what’s good for Maori, is good for the country.”

ENDS


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