Tremain Chris: Westpac New Zealand Bill — Second Reading 
Tremain Chris: Westpac New Zealand Bill — Second Reading 
[Volume:672;Page:18365] 
CHRIS TREMAIN (National—Napier) 
 on behalf of  
Craig Foss (National—Tukituki) 
: I move  
That the Westpac New Zealand Bill be now read a second time 
. I move the motion on behalf of my colleague the chairman of the Finance and Expenditure Committee Craig Foss who is currently representing the Government in Hanoi at the Asian Development Bank annual general meeting. Craig has been shepherding the bill through the House and will continue to do so as it progresses from this point forward. 
The bill is a private bill promoted by Westpac New Zealand Ltd. The bill provides a mechanism to enable certain assets and liabilities of Westpac Banking Corporation in New Zealand—principally assets and liabilities of Westpac Banking Corporation’s New Zealand institutional banking business—to be vested in its New Zealand subsidiary Westpac New Zealand Ltd. 
Westpac is one of New Zealand’s oldest financial institutions. This year it is celebrating its 150th anniversary in this country. Westpac is one of four banking groups that have dual banking registration in New Zealand. It operates in New Zealand through both the Westpac Banking Corporation New Zealand branch and a locally incorporated subsidiary Westpac New Zealand Ltd. 
Westpac New Zealand Ltd was incorporated and became a registered bank in 2006 in order to comply with the Reserve Bank of New Zealand’s local incorporation policy. The policy provides that systemically important banks should be incorporated in New Zealand. A bank is regarded as systemically important if it has liabilities other than those to related parties in excess of $15 billion. Westpac Banking Corporation’s New Zealand branch has a condition of registration that provides that its external liabilities are not to exceed that amount. 
Having regard to the local incorporation policy Westpac Banking Corporation and Westpac New Zealand Ltd have agreed with the Reserve Bank that Westpac Banking Corporation will transfer certain assets and liabilities—principally assets and liabilities of its New Zealand institutional banking business—to Westpac New Zealand Ltd. The transfer will reduce the size of the New Zealand branch and help to ensure that it continues to remain below its external liability cap both in periods of growth and in periods of market volatility as we go forward. 
The transfer will also mean that Westpac New Zealand Ltd will increase in size. That is beneficial in terms of the local incorporation policy as it will allow the Reserve Bank to have greater control over the assets and liabilities being transferred were there ever to be a bank failure event. 
When Craig Foss moved the motion for the first reading of the bill he noted that legislation is the only means by which the designated assets and liabilities can be invested in Westpac New Zealand Ltd efficiently and economically without disrupting the conduct and continuity of Westpac New Zealand’s banking business. The bill also ensures minimal disruption to Westpac’s customers employees and suppliers. 
The Finance and Expenditure Committee has made some minor amendments to the bill. They are marked on the bill that is on the Table. I am sure Amy Adams and other members of the Finance and Expenditure Committee will pay close attention to the detail of those amendments to make sure they are clear to the New Zealand public as we go forward and I look forward to Amy’s speech in that respect. 
I offer my thanks to members of the Finance and Expenditure Committee for their thorough examination of the bill and for ensuring the timely return of the legislation to the House. The Finance and Expenditure Committee is an excellent committee with members from across the House who do extremely good work and I commend them for their work in the committee. 
I also acknowledge the constructive cross-party examination on this issue. It is important when dealing with these sorts of matters to reach consensus where possible. A strong and functional banking system is important to New Zealand and as Craig noted when he moved the motion for the first reading of the bill in a small but important way the bill helps make the banking system of New Zealand stronger. I commend the bill to the House.