Dalziel Lianne: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
Dalziel Lianne: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
[Volume:657;Page:6086] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am disappointed that the Minister of Finance has not responded to the questions we have put to him. I think it is important that he responds. The question that I really have been looking for an answer to is why we cannot have a limited select committee process for the Crown Retail Deposit Guarantee Scheme Bill. That was recommended by Treasury in the regulatory impact statement. It is not often that Treasury recommends something and the Government simply turns a blind eye to it unless there is a reason. But we have no reason; nothing has been presented to us by any of the Government members who have been asked to get up and speak on that particular matter. For them to seek closure motions after a very short debate and to have no response at all from the Minister is quite strange. I am surprised because I thought this Minister was capable of responding to the questions. 
I will go back to the details about the consultation which are in annex 3 of the regulatory impact statement. Banks raised their concern about the extension of the scheme saying there was “mixed support for extending the Scheme to match the Australian scheme … Banks tend to think it is not necessary for them and risk of depositor flight to Australia is low. Finance companies”—surprise surprise—“tend to support extension. Some Credit Unions have chosen not to opt into the DGS because they have a relatively sticky depositor base.” That is obvious. The regulatory impact statement continues: “Entities operating outside of the DGS (e.g. fund managers) are concerned about the competitive disadvantage that the Crown guarantee puts them at.” That is exactly the point that has been raised by the Hon David Parker and must be answered in this Committee tonight as the bill progresses under urgency. 
I raise another issue that was also raised in the various engagements with stakeholders as Treasury and the Reserve Bank have described them. A workers union and an economic thinktank—they are not described by name—have said that this bill is an opportunity to attach conditions on institutions’ behaviour for the extension. The two particular examples that were raised with the officials were employment protection and mortgage holiday provisions. I can understand why unions and any economic thinktank worth its salt would want employment protection at a time like this and also that mortgage holiday provisions are absolutely vital to enable some people to survive the first redundancy their family will have experienced in a lifetime. That genuine concern has been expressed to me as a constituency MP and I am sure constituency MPs on the other side of the Chamber will know exactly what I am talking about. 
I will read the officials’ response to that suggestion. They said: “We have assessed the idea of introducing conditions on the guarantee but consider such conditions may undermine the objectives of the guarantee e.g. it may stop firms downsizing when that sort of change is necessary to ensure their future viability.” That may well be in terms of the direction the Government wants to point some of the non-bank sector to but when we are talking about the banks I understand very well why certain unions would be pushing for a removal of the risk of outsourcing to other countries. The banking sector has seen a lot of that. If the Government is to provide this guarantee we are talking about the taxpayers of New Zealand basically underwriting performance in this regard. It is important that we have a bit of a debate around these conditions. 
The mortgage holiday provisions are another issue. As I say that issue is not even responded to by the officials which is a bit unfortunate because we are trying to protect depositors over the period of uncertainty that has been created by the global economic environment. That is exactly what the banks would be protecting by giving a mortgage repayment holiday on favourable terms. That in itself is a protection that could be offered during this period of economic uncertainty. It is unfortunate that we have not really been given an opportunity to debate these matters. That is what a short time—1 or 2 days—at a select committee would enable us to do.