Young Jonathan: Third Readings — 
Text is incorporated into the Bound Volume 
Young Jonathan: Third Readings — 
[Sitting date: 07 April 2011. Volume:671;Page:17858. Text is incorporated into the Bound Volume.] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The legislation arising from the Financial Markets (Regulators and KiwiSaver) Bill as well as the raft of other legislation that we are looking at today is sponsored by the Minister of Commerce Simon Power of whom the previous speaker Stuart Nash spoke so highly. It is very good to hear Labour members speak so highly of Government Ministers. 
A tremendous work programme and a tremendous commitment have been undertaken by the Minister and also by members of the Commerce Committee who have the privilege in essence of reviewing the engine room of the New Zealand economy in so many different ways. The financial markets legislation establishes a new financial sector regulator the Financial Markets Authority and makes some very important changes to the governance of KiwiSaver schemes. The overriding focus in the commerce portfolio is to restore investor confidence in our capital markets after the global financial crisis. One of the first constituent inquiries that I had as the new MP the MP for New Plymouth was when a retired couple came to me surrounded by a disaster that had not only cost them in regard to where they had invested but also cost them their personal home. We have heard stories such as this one that have necessitated such an extensive review of the regulations surrounding the financial sector. 
We often hear the classic phrase “the mum and dad investor”. Essentially this is the investor who has a bit of spare cash which has been saved for retirement by a person who does not see investment as something that he or she is necessarily highly specialised in. Coming out of the global financial crisis it is important to have those improved protections for such investors because they are imperative for their future confidence in their ability to invest in New Zealand. Notwithstanding that one of the things we discovered through the select committee process of looking at this legislation was that investor education and awareness is very important. Last year Professor David Mayes who is the recently appointed chair of finance at the University of Auckland business school—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Courtesy is contagious. 
JONATHAN YOUNG 
: Thank you Mr Assistant Speaker. Professor Mayes recently said that New Zealanders are average. We do not like to hear that we are average do we? But he was making a comment that we are average when it comes to financial literacy. It is a problem that is not unique to this country. He commented that a lot of the finance company collapses occurred before the global financial crisis which shows that New Zealand was ahead of the curve on this one but any company that indulges in risky finance gets into trouble when the economy turns downward. 
We need to understand and acknowledge that this problem has been in existence for some time and that this country was in recession months or even a year before the global financial crisis happened around the world. We were ahead of the curve. That means our financial markets regulatory framework was somewhat fragile; some would even say that it was shonky in different parts and places. This all occurred under the watch of the previous Labour Government even though some have made the comment that the situation was observed and that that Government wanted to improve it. Essentially we were not fit for purpose to trade in the modern world where opportunities are global but accountability is local. Investment in “New Zealand Inc.” needed to have some tremendous work done on it. 
A substantial disincentive for people to shift from a borrowing-based way of thinking which has dominated New Zealand in the last decade to an investment-based way of thinking is a lack of confidence in a system that fails to ensure professional effective ethical and accountable oversight of that system. When we try to convince New Zealanders not to invest simply in the housing market with money that has been borrowed from overseas but to save and invest in our economy our industries and our businesses many people have asked whether they can trust that investment to be protected. It is important to acknowledge that following the introduction and passing of this legislation we will have a framework and an environment that will encourage that level of confidence and will see the capital base of our nation be released more for business. Even this morning as the select committee heard the financial review of New Zealand Trade and Enterprise its chief executive said that although we have enough market opportunity globally we do not have enough companies of international scale that are able to face and conquer the known challenges of size and distance. So we need a stronger capital base that will enable our companies to internationalise and to grow in scale and capacity in order to take advantage of the commodity boom happening around the world and to build the wealth of New Zealanders. 
This raft of legislation which has been sponsored by the Minister of Commerce the Hon Simon Power is leading us in that direction and is a great step forward for us for our economy and for the future success of all New Zealanders. I commend this legislation to the House. Thank you.