Hon TODD McCLAY (National—Rotorua): Where to start? Because what this member who's brought the bill to the House really has said is that, actually, he's not sure what companies are for and that he has written this bill himself but he's not sure of quite what he said in each of the clauses and that the select committee should go away and try and fix this for him because he's not a lawyer. He's then gone on to say that, actually, although it's not written in law and that it's not necessarily the case because it's not required by statute that all companies in New Zealand maximise profits above all else. What absolute rubbish. He quoted something that somebody said there supposedly in support.
Actually, if we look at what's happened since the bill was drawn from the ballot, those of legal mind who work in this area every single day who go out on behalf of shareholders to prosecute companies' directors that are not doing their jobs properly, but who advise companies large and small in New Zealand, including the Government, have said—at best, Roger Partridge, the chairman of the New Zealand Initiative, said, "The directors duties bill is well meaning but harmful." I think he's wrong; I think it's well-meaning but, actually, will make no difference at all with the exception that what we know is when this Parliament passes a law, even when the law says you may do something—in this case, everything the member said they may do actually is already possible, and Companies New Zealand already consider these things. Many of them consider all of the things that he said that he wants them in law to say they may. But, actually, what happens—the courts and advisers to companies and lawyers and others say, "Parliament's passed a law that says you may, but that means you actually must take it into account and consider it whilst you go about your duties."
Now, he would say that's a good thing, the member who's brought the bill before the committee, but the problem with good intentions is actually the consequence thereafter when it enters into law. All we need to do is look at the Government backtracking quickly a short time ago around the Credit Contracts and Consumer Finance Bill (CCCFA), which was well intended; it was actually well-meaning. We were told by the Minister in the House that it was really only to clarify, and nothing would change, but, actually, what has happened is banks have decided they have to take completely what Parliament has suggested to an extreme, and people can't get their mortgages, who previously would have been able to. And there's extra greater cost there—so much so that the Minister has said that we're going to have to fix that, less than year after it's come into effect.
So the problem that we have when a member stands up in this House and says, "I've written this bill myself; I'm not a lawyer. These are the things I intend it to do. However, I'm not sure it will do that because there's lots of ways to read it. Please, select committee, can you make sure you can fix this for me, as the unintended consequence will be actually greater challenge and cost and altering of what businesses do."
Now, here's an example of how it could go so very, very wrong, because in saying "may", there will be companies around the country where directors say, "Well, Parliament says we may do this, so we should consider it." And they may take action which means they're not able to pay their debtors, they're not able to pay their bills, and they've had to weigh that up and say, "Well, we think we want to consider the Treaty and environmental impacts and other things." And they make decisions that mean they're not able to pay their bills. No, it's not about insolvency as the member has said; it's, actually, directors of a company have a duty to make sure, yes, they're solvent; and, two, they can pay their bills.
Actually, what this is doing where they're already able to consider these things but they have an obligation—not about profit but about running a company properly, paying their tax, paying their bills, making sure that their debtors are not put at a disadvantage and that they will receive payment for their services, they now will have other things they need to consider. And there will be cases—just as we saw with the CCCFA which had a different consequence than we were told as a Parliament—where people don't pay their bills to directors and they will have a defence.
Chapman Tripp, who I have a lot of respect for—I don't have a lot of respect for all lawyers or law firms, but, in this case, this is a very, very serious company—has gone through this bill in detail, talked about the bits that could be helpful, the bits that are not harmful, but the bits actually that not necessarily could cause harm, and have come to the conclusion and said it's virtue signalling: "In our view, the bill adds nothing to existing law of directors' duties, and is a virtue signal to the stakeholder theory of corporate governance."
Well, if that's the case, why didn't this member actually take the time to talk more widely, seek advice, talk to those that are experts in this area who know about drafting, and come up with something that would actually have the intention of what he wants, which is better corporate governance? This won't do it. This House passing a piece of legislation, merely saying you may do some things that you're already able to under law but we're going to confuse this by writing it in law, rather than a company director being able to consider things that are important for that company, actually is not a good use of the House's time, and it's not a good use of the member's bill process, because there are so very many important issues that this House actually could do something about. Sadly, this is not one of them.
You know, directors have to uphold ethical standards already. They must do. They must meet the requirements of New Zealand law when it comes to the environment. They must do that—they must do that. If the law says there's an environmental standard, they must meet it. If they don't, they are breaking the law. We heard an example from the member who's moved the bill who said earlier—
Dr Duncan Webb: Do better. Aim higher.
Hon TODD McCLAY: He's very angry now because he realises he should have done a bit more work. But we've heard from the member earlier that there are companies that go out there who wilfully promote their products, knowing that they won't do what they've said. That's already against the law. This is not a good piece of legislation. It's not a good use of the House time. In essence, at best, it is virtue signalling, but it will end up being harmful, and the National Party will be voting against it.
DEPUTY SPEAKER: The debate is interrupted and set down for resumption next sitting day. The House is suspended and I'll resume the Chair at 9 a.m. tomorrow for the extended sitting to consider Government orders of the day. Thank you everyone for your day's work.
Debate interrupted.
Sitting suspended from 9.58 p.m. to 9 a.m. (Thursday)