Hague Kevin: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Hague Kevin: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4989] 
KEVIN HAGUE (Green) 
: 
 I agree with the analysis that has just been presented by the Hon Lianne Dalziel but I differ from her conclusions. The origins of the Securities Disclosure and Financial Advisers Amendment Bill predate the financial crisis. I have spoken in the Chamber on a couple of occasions now about the events that have occurred in the world since 2006. The crisis if anything must surely have taught us that the balance proposed by this bill between access to capital for businesses on the one hand and protection for investors on the other hand has been struck in the wrong place. The events of the crisis should have caused the Government to rethink where that balance is to be struck. In this case the increased risk to investors on the one hand outweighs the marginal benefit to businesses from somewhat increasing their access to capital. The Green Party opposed the bill at its first two readings and will continue to do so. 
I will talk about one of the matters at the heart of the bill because it is a fundamental matter of political philosophy. It is the extent to which people should be protected from the consequences of their own decisions when those consequences are adverse. This bill touches precisely on that point. It is all very well to say a fool and his money are easily parted and the fool should take those consequences but the reality in this case is that actually we all pay for the cost of those poor decisions. In excess of $7.1 billion worth of New Zealanders’ wealth was invested in the finance companies. Now at least $1.7 billion worth of that wealth is tied up in the various finance company moratoria. That represents an enormous erosion of national wealth. In other words we all face the consequences of the poor decisions made by those individuals. There are other consequences. Those individuals who were relying on those investments for their retirement savings will now be coming to the State and saying they need support. The issue is not as simple as saying the individual must face the consequences of his or her actions because we all face those consequences. 
I want to draw the House’s attention to the report by the Morningstar Group which reviewed a number of countries for their friendliness with regard to investment. The report looked at Australia Canada China France Germany Hong Kong Italy Japan the Netherlands New Zealand Singapore Spain Switzerland Taiwan the United Kingdom and the United States and it looked at a variety of criteria. Overall New Zealand ranked dead last of all of those countries in relation to our friendliness to investment. In particular the issues on which we ranked the poorest—with a D minus—were in relation to our disclosure provisions and investor protection. Those are the very provisions that this bill seeks to relax. 
I know that the Government will say that the bill does not represent a relaxation of the disclosure provisions because investors can still find the same information through the continuous disclosure procedures. However the reality is that that represents an erosion of the accessibility of the disclosure information and a reduced accessibility of the information effectively amounts to the same thing as a relaxation of the provisions. The bill is relaxing the disclosure provisions at the precise time when around the world everyone is saying we need to increase transparency and disclosure. It is clearly the wrong direction for New Zealand to be moving in to relax those provisions. 
I will conclude by also referring to the wealthy investor provisions and to heartily endorse the comments made by Lianne Dalziel. There is no place for those provisions. I have spoken previously in the Chamber about Madoff’s Ponzi scheme and about the very compelling demonstrations that have been provided both in New Zealand and around the world of the relative inability of wealthy investors to make wiser decisions than the rest of us. Once again I say we all face the consequences of their poor decisions. 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Simon Power to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to.