Curran Clare: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Curran Clare: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
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CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak on the third reading of the Securities (Disclosure) Amendment Bill and Financial Advisers Amendment Bill. As outlined by the speakers before me this legislation amends both the Securities Act 1978 and the Financial Advisers Act 2008. It is intended to respond to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors. It also makes a number of minor changes to tidy up the Financial Advisers Act. 
Before I go any further I will comment on something the National member Jonathan Young noted in his speech earlier. He said that business confidence is what matters right now. I could not agree more. But I also note that the legislation being put before us by this Government is really a small measure towards improving confidence. It is ultimately tinkering around the edges—as are most of the bills that have been put before us in the House this year—and does not deal with or address the real issues confronting us right now. 
This legislation is the first I have been able to participate in from start to finish as a new member of Parliament. As a member of the Commerce Committee I was able to see the process in how the legislation has been shaped. What has amazed me most has been all the hard work that has gone into the legislation that is before us now. I thank all the submitters to the bill all the officials who advised on the bill and all members of the Commerce Committee particularly its very capable chair the Hon Lianne Dalziel. As the Minister of Commerce at the time she announced the Capital Market Development Taskforce in November 2008. The task force has shaped the legislation before us. Labour at the time launched the task force to identify ways to improve access to capital. Originally the task force had a year to produce its report but in response to the global financial crisis it produced an interim report in November 2008. 
The report outlined a package of proposals designed to boost access to capital for businesses and reduce the cost of raising capital. Getting access to capital is important for businesses to grow and in a recession it has become even more important that we enable access to capital. This importance was noted by Rob Cameron the chairman of the task force who said: “In response to the current financial crisis access to capital would be a key issue in the survival of many businesses.” Enabling businesses to grow will keep people in jobs. 
I have already said today and I will say it again that there are around 471000 businesses in New Zealand and 97 percent of those businesses are small businesses employing fewer than 20 employees. As I also mentioned in the Chamber last night unemployment in Dunedin has doubled in the last 3 months and has risen 161 percent in the last year. As the member for Dunedin South it is important that I stand here and advocate for greater support from the Government for putting people into work. 
This legislation attempts to respond to the current international financial crisis by removing unnecessary impediments to raising capital while ensuring the timely disclosure of relevant information to prospective investors. It is worth noting that the recession has created a need for strong Governments to act. It is a pity we do not have one here. Under a Labour Government the deposit scheme was put in place to give New Zealand depositors confidence that their money would be secure in the event that an approved financial institution failed. The finance industry as we know is at present facing huge distortions in the cost of money and is paying interest rates for money that because of falling demand or tightened credit approvals it cannot or will not lend. This legislation attempts to enable some of this capital raising to occur by endeavouring to remove unnecessary impediments. I hope that the legislation does enable some capital raising. 
As we have learnt over 310000 New Zealanders are currently reliant on Government support and we do not want that number to continue to grow. But if the trajectory of recent weeks continues there is no doubt that predictions of the numbers of unemployed growing from currently 53000 to 90000 by 2010 will instead be realised by early next year. Securing funding today is arguably the most critical issue for businesses as they come to terms with the current global economic downturn. That was the theme echoed in the submissions received by the Commerce Committee. The intention to streamline equity funding for listed issuers through the simplified disclosure prospectus proposal instead of an investment statement is one measure put forward under this legislation. 
I will turn back to finance companies that were down and out until the previous Labour Government’s deposit guarantee revived confidence in the sector. Until that guarantee scheme we did not see a recovery to the debenture downturn being faced by most of the sector. It is important for many New Zealanders particularly in the retail finance sector that this legislation is properly considered as getting it right. 
As a relatively new member I have enjoyed participating in this debate. Labour supports this legislation but has a particular specific concern with one part of it which has been referred to by all of the speakers on this side of the House. As members have heard this concern is with the wealthy investor category. Labour members of the committee were particularly concerned about that category. We have heard from the committee chair from Charles Chauvel and from Raymond Huo about it. As we have also heard from other speakers being wealthy does not necessarily or automatically make one informed or sophisticated about investing. Although not opposing the specific amendment some of us are concerned that changes are being made to the wealthy investor exemption when that exemption may be repealed as part of the review of the Securities Act noting that the relevant review of the financial products and providers discussion document described it as “the least principled of all the exemptions”. It is important that this concern is taken note of. 
Going back to the priorities that this Government should be looking at it is important that we are protecting the most vulnerable and that everything that is being put before this House is about confidence and also about job creation. But what we have seen under this Government instead has been cuts to the funding of New Zealand Trade and Enterprise grant programmes slashed research and development tax credits the slashing of the Fast Forward Fund and putting community skills training programmes on the back-burner which are all about undermining confidence. No one is blaming National for the recession but people expect a coherent plan focused on compliance costs rather than on investor protection. Building confidence in general should be the focus of the Government right now. 
As a nation we do not save enough. Initiatives such as KiwiSaver were designed by the previous Labour Government to help address the imbalances in our economy. As I mentioned earlier in this debate the global pressures have had an impact on the recovery of household savings which should contribute to an improvement in New Zealand’s external balance over the next few years. But measures that focus on ensuring that our savings regime is protected such as KiwiSaver investing in infrastructure to create jobs and introducing measures to protect investors are some of the things that this Government should be focusing on. 
Finally amending the Securities Act 1978 and Financial Advisers Act 2008 is a significant undertaking. I make the point that what is ironic about this legislation is that similar recommendations were consulted on in the review of the financial products and providers and are included in the current review of the Securities Act. Labour supports this legislation. I have enjoyed working with the Commerce Committee on seeing it through the House. Again I thank the officials who supported us in the endeavour and the submitters who provided us with their analysis of the issues.