Nash Stuart: Third Readings — 
Text is incorporated into the Bound Volume 
Nash Stuart: Third Readings — 
[Sitting date: 07 April 2011. Volume:671;Page:17856. Text is incorporated into the Bound Volume.] 
STUART NASH (Labour) 
: 
 I stand to speak on the third readings of these bills. I have spoken in the first and second readings and in the Committee stage on this legislation. I think everyone knows that this legislation has cross-party support. It is most important legislation. This is quite an unusual reading because the Financial Markets (Regulators and KiwiSaver) Bill has been divided into five separate bills. We have the Financial Markets Authority Bill the Securities Amendment Bill (No 3) the Securities Markets Amendment Bill (No 2) the KiwiSaver Amendment Bill and the Financial Advisers Amendment Bill (No 3). There is a reason for this: the bills are quite similar in their intent and it makes a lot of sense to clump all of these together basically for the integrity of the legislation. The legislation establishes the Financial Markets Authority and sets out the wider enforcement and surveillance powers that are currently available to regulators. It also makes changes to the regulation of registered exchanges and improves the regulation of KiwiSaver schemes. 
Other members have spoken on the absolute importance of enhancing the confidence of our financial markets. A single market regulator should contribute towards this end. Labour launched the Capital Markets Development Taskforce and we are pleased that this Government is acting on its recommendations. We are concerned about the lack of transparency around the current security commissioners though. 
One thing I would say is that this legislation is from the Hon Simon Power. It is good legislation and as highlighted by Simon Bridges about 2 weeks ago I think 40 percent of the legislation that this Government has passed through the House has been brought in by the Hon Simon Power. It is a real shame that he is leaving Parliament because he appears to be the only Minister in this Government who is doing any work. There has been a lot of conjecture as to why the Hon Simon Power is leaving. I suspect that he is leaving because he is sick and tired of carrying the workload for the rest of the National Government. If one Minister is putting 40 percent of the legislation through the House then I ask what the other Ministers are doing. In fact when I looked through the Order Paper I thought it was more like 50 percent of the legislation that Mr Power is handling. So whether he is rushing stuff through to get it done before he leaves or whether the other Ministers are just so lazy and do not have a plan for anything Simon Power is doing everything. 
Having said that I note that Mr Power was the Minister who put forward the plan for selling off State assets. That is a real shame but fortunately for New Zealand that legislation will not be passing through this House. But I do congratulate the honourable member. He has done a good job with this legislation and he has taken on board a lot of the recommendations from the Capital Market Development Taskforce. He consulted widely I believe with the Hon Lianne Dalziel and it is very much good legislation and necessary legislation. Members can tell Mr Power is such a hard-working Minister; he is the only one who is in the House. I do not know where all the other National Ministers are— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
STUART NASH 
: I apologise. But I offer my congratulations to Simon Power. He is a good hard-working Minister. I am sure that the National Government will be sad to see him go because he is the only one who is carrying the can and the only one who seems to have a plan for certain areas. 
Labour supports this legislation. As mentioned it establishes the Financial Markets Authority and in principle we support the idea of consolidating all the different regulatory bodies into a single agency. The concentration of power in the hands of the Financial Markets Authority—the FMA—means that all its officers must be beyond reproach and its processes must be fully transparent. I think that is something the people of New Zealand have really demanded: a much higher level of transparency. The integrity of the markets depends upon the integrity of the Financial Markets Authority and its personnel. This is especially true and most important as I believe our financial markets are still struggling under the perception that cowboys and crooks run the show. Hopefully this is no longer true and I think a lot of those people have been weeded out but it is up to the Financial Markets Authority to act in a way that totally dispels that perception over time. I know it is a cliché but the proof of the pudding is in the eating as they say. The Financial Markets Authority has the very important task of letting the confidence return to our financial markets if we are to grow as a country and deepen our capital markets. 
Labour started the financial markets reform process and we are pleased that the Government is continuing this work. As mentioned Lianne Dalziel set up the Capital Markets Development Taskforce in 2008 in order to develop a blueprint and an action plan for the development of our financial system. We are pleased the Government is starting to act on the recommendations in the task force’s report one of which was to create a single market regulator. 
I could go through a number of measures that the previous Labour Government recommended that this legislation picks up but the whole process was accelerated by the global financial crisis and the spate of finance company collapses. I think that there have been up to 61 collapses now. It is quite astounding to think that there are even 61 finance companies in the country but 61 finance companies have collapsed. I have spoken about the consequences of the collapse of those finance companies in this House many times and certainly of the consequences that has had on a number of New Zealanders who have lost their life-savings. Some of the stories are diabolical; some of them are incredibly sad. In fact we are still dealing with the fall-out from South Canterbury Finance which looks like it might end up costing taxpayers well over $1 billion—some say up to $1.6 billion. There is a widely held belief that if the Government had managed this process properly then the cost would not have needed to be so high at all. But South Canterbury Finance will end up costing taxpayers about $1.6 billion. 
Labour’s view on the Financial Markets Authority is that enforceable principles such as integrity skill reasonable care and financial prudence are needed. Principles are flexible. Unlike rigid rules which are made to be broken it is important that the ethics that underpin the new regime will help rebuild the trust and the confidence in the financial sector that is so important in terms of developing our capital markets and our financial markets as well. 
This legislation gives the Financial Markets Authority new powers that were never available under the Securities Commission including the ability to take action against those directors it believes have acted illegally when to do that is in the public interest. That is the most important point. It is about what is in the public interest. As well the authority has the power to seek search warrants and to raid offices and seize documents. This is not about an ambulance at the bottom of the cliff; this is getting to the nub of the issue and solving problems before they become another South Canterbury Finance incident and cost us about $1 billion or more. 
The removal of the New Zealand Exchange’s regulatory role is sensible. Although there may never have been an actual conflict of interest the NZX’s dual commercial and regulatory roles have created the appearance of a conflict of interest and as mentioned this legislation is a lot about perception and appearances. We need to create an environment where the people of New Zealand actually have trust in the people who are controlling and regulating these markets. 
Regulators have attracted some blame for recent troubles in our financial markets and we believe it is necessary to reshape New Zealand’s regulatory environment. The Financial Markets Authority will have powers to require that warnings about financial products and providers be included in offer documents and be published by the people involved. This provides investors with the information required to make sound decisions. That is most important. I remember that legislation was passed within the first 6 months of this Government I think that stripped away a lot of the information that needed to be required in prospectuses in order to raise funds from the public. I had major reservations about that legislation because I believe there needs to be as much information as possible in a prospectus that allows the general public to make an informed decision. This legislation contains many far-reaching powers and this underscores the importance of its transparency and rigour. 
This is very important legislation and Labour is backing it wholeheartedly but there is one thing I would like to see. I would like to see more robust legislation in this House that shows the Government has a plan in areas outside the portfolios that the Hon Simon Power manages. I have not seen an economic plan that will allow the development of our capital markets. I have not seen any sort of plan whatsoever that will encourage the development of our financial sector. The only conclusion I can come to is that the Government has no plan. If mining national parks and selling State assets is its idea of a plan then New Zealanders need to be very very worried. That Government over there actually has no plan whatsoever for economic growth or job creation. 
I commend this legislation to the House. Thank you very much.