Nash Stuart: Financial Service Providers (Pre-Implementation Adjustments) Bill — First Reading 
Nash Stuart: Financial Service Providers (Pre-Implementation Adjustments) Bill — First Reading 
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STUART NASH (Labour) 
: 
 I must admit that it is humbling for me a poor boy from Hawke’s Bay to follow the second most sexy woman in Parliament but I will do my best. I rise in support of the Financial Services— 
Melissa Lee 
: You could be No. 3. 
STUART NASH 
: Well I have to ask myself if Bill English is No. 3 what the validity of that poll is I must admit! We cannot believe every poll we read. Jacinda Ardern must be No. 1 and there is no doubt about that but let us get on to the substance of this bill. 
Hone Harawira 
: You’ve got to be No. 3—the sexiest woman. 
STUART NASH 
: It is worth noting I tell my friend that this bill is designed to further tighten the rules and regulations around financial advisers. I congratulate the Hon Lianne Dalziel on her excellent work as Minister of Commerce in the previous Government and now as chair of the Commerce Committee. It is her work that has got us here today; let us not beat around the bush and let us be clear about that point. 
But why are this bill and the overall tightening of regulations governing financial advisers important? Quite simply they are right for the people of New Zealand. There are many many sad sad stories of ordinary New Zealanders who have worked incredibly hard all their lives only to have someone masquerading as a financial adviser provide them with advice that has cost them their savings. There is a fundamental difference amongst the groups of people who have lost their money in the spate of very public finance company collapses. There are savers and there are investors. Investors are those who have or should have knowledge of risk and who seek advice from different sources to make decisions after weighing up the odds. But what they have not assessed as a risk is the negligent behaviour of people who had no financial knowledge except for the knowledge that the more they sold the better off they were. Advisers have been conflicted in the extreme. Savers however are people who have put their hard-earned dollars which they had built up over 20 30 40 and 50 years of working hard and paying their taxes into the hands of unscrupulous operators only to see their life-savings vanish. And with their savings have gone their dreams of a retirement with dignity a retirement spent enjoying the fruits of their labour. They have seen what should have been that reality cruelly taken away. 
Savers do not necessarily price risk as investors do; they pay others to assess risk and expect competency diligence and honesty. Is that too much to expect? No it is not. Investors understand that risk equals return whereas savers—mums and dads grandmothers and grandfathers—who have lost all their money in the financial sector were not pricing risk. They have been putting their money away ready for their retirement and for their grandchildren’s education. This travesty has resulted in an increase in ill health and a decrease in the well-being of a huge cohort of New Zealanders. 
Last year I spoke in this House of at least two people who had committed suicide because they had lost their life-savings. I spoke of the tremendous hardship and mental anguish of those New Zealanders. I spoke of the tremendous loss of wealth from the nation’s bottom line of over $5 billion. I cannot imagine being 65 and losing my life-savings. I cannot imagine the feeling of utter devastation. It is no wonder that ill health has plagued these unfortunate Kiwis. So Labour did something about it and passed the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act. 
This current bill under debate makes minor proposals that are machinery in nature but that does not make it any less important in protecting the most vulnerable in our society. This bill is important for other reasons too. One of the problems in this country is the do-it-yourself or DIY attitude or mentality to investment and savings that many of us have. We think we know how to earn our own optimal return on our savings without seeking advice from those who are expected to know the markets and the different investment options. The level of investment in the housing market is evidence of this trend because we all know how to buy a house do we not? Now we are told that as a nation we have to invest in the productive economy—buy into stocks invest in capital markets and put our savings into areas that will lift New Zealand’s economic growth. I agree with this advice but the problem which has been recognised by this bill and by the other two bills I mentioned beforehand is that the level and quality of advice from financial advisers has been of such poor quality—and I think we know that we are talking here about the finance company sector—that many New Zealanders have now had their worst fears realised: no one can be trusted with their money. 
The stereotypes and generalisations that people had about financial advisers have been realised. I feel sorry for those in the sector who acted with competence and who always advised their clients in their best interests because they have been tainted with the same brush as those who advised that a balanced portfolio meant investment in five different finance companies. However not all who acted in an unscrupulous manner were those who operated out of the back of a tin shed; there were those in glass towers who also gave advice that was as devious and self-serving as that found anywhere. This bill will be I am hopeful another step in the process of rebuilding the confidence of ordinary New Zealanders in the investment advice sector because it is exactly what is needed. 
If we are to grow our country it will not be because this current Government is giving tax cuts to the top 9 percent who earn the top marginal rate and is giving very little of anything to the other 91 percent who are not. It is interesting that the  
New Zealand Herald  
poll on Saturday said that only 22 percent believed that the proposed increases to GST—so that the Government can give tax cuts to those most privileged in our society—will be good for economic growth. Do members know that in the Napier electorate over 75 percent of people earn under $40000 a year and that only 5 percent earn over $70000? So three out of every four people in the Napier electorate got no tax cut last year but this year they will get an increase in GST to pay for tax cuts for the top 5 percent of income earners. That is not fair in any language. 
These proposed tax cuts will not do anything for economic growth;  
New Zealand Herald  
readers know this. As mentioned more actually said that the proposed cuts were unfair than said they were fair. Do members know why the cuts will not do anything for economic growth? Well the Government obviously does not. It is because they are based on outdated and disproved economic theory. Friedman and his supply-side free-market approach to macroeconomic theory died with the downfall of the Thatcher and Reagan Governments. It is rather interesting that other countries that we are very very fond of comparing ourselves with like Australia have adopted a Keynesian approach— 
Hon Simon Power 
: Don’t go picking on Ronald Reagan; it’s an outrage! 
STUART NASH 
: —I tell Mr Power—where they provide tax relief to the most vulnerable not the most affluent. 
This bill is absolutely necessary because it starts the process of rebuilding the confidence of ordinary Kiwis in the financial advisory market. Kiwis need to know that when they take their hard-earned money to a financial adviser they will get independent competent advice from a person who will walk them through all the risks and benefits in a transparent and meaningful way. The past was the Wild West; a city full of cowboys is not a good place for the vast majority of Kiwis to be. As a collective we need to ensure that people are encouraged to diversify through their portfolios into the productive economy and that they are encouraged to save and invest in a prudent manner. Anything that helps to ensure that process we are duty-bound to support. There is a long way to go I tell Mr Power before the industry will have the full confidence of the investing and saving public again but this bill along with Lianne Dalziel’s two Acts is at least a start. Thank you.