Genter Julie Anne: Credit Contracts and Consumer Finance Amendment Bill Financial Service Providers (Registration and Dispute Resolution) Amendment Bill — Third ReadingsText is incorporated into the Bound VolumeGenter Julie Anne: Credit Contracts and Consumer Finance Amendment Bill Financial Service Providers (Registration and Dispute Resolution) Amendment Bill — Third Readings[Sitting date: 27 May 2014. Volume:699;Page:18360. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): Tēnā koe Mr Assistant Speaker. Tēnā koutou e te Whare. I rise on the third reading of the legislation arising from the Credit Contracts and Financial Services Law Reform Bill to give a contribution from the Green Party. The Green Party is working towards a smarter greener economy to support all New Zealanders. What we really want is a fairer New Zealand and one where everyone has a chance and has a fair go.At the moment unfortunately New Zealand like many other rich countries is seeing an increasing concentration of wealth amongst a small group of people and things are becoming more and more difficult for those at the lower end of the spectrum those who are on a lower income. The minimum wage is not really high enough to meet all of the needs for people to raise a family and that is unacceptable. It is within this context of inequality and worsening inequality that this legislation has come before the House to deal with the problem of third-tier lenders or loan sharks. It is only when you have people having a difficult time making ends meet that suddenly there are the right conditions for people to set up shop and start ripping them off as loan sharks do. So we know that we have a serious problem.We have increasingly seen a proliferation of third-tier lenders or loan sharks in areas like South Auckland and Porirua—those communities where people have been struggling and where there has been a loss of jobs and increasing power prices and house prices. It is for that reason that people very understandably are susceptible to the idea of a short-term loan. Third-tier lenders are able to prey upon the fact that people are not as financially literate as the lenders may be and do not fully understand the implications of compounding interest. It is for that reason that this legislation has come before the House.I have to congratulate the officials whom I do believe were working very hard on this for very many years. It did take many years for this to finally come through the House. I know that they are working with the affected communities and are out there trying to address this problem. I have to especially congratulate the hard work of Carol Beaumont my colleague on the Commerce Committee who I feel really led the charge and is incredibly passionate about this issue. The Green Party supported her Supplementary Order Paper 430 which would have introduced interest rate caps.I think that the biggest regret I have about the legislation that is going to be passed in the House tonight is that it does not introduce a mechanism by which we could have put in place interest rate caps. Of course interest rate caps have been introduced in recent years in many comparable jurisdictions: in Australia the United Kingdom Canada the United States Japan and Finland. Most other rich countries that have the problem of third-tier lenders have responded with interest rate caps. Unfortunately the argumentsthat we heard at the select committee were quite spurious. The two arguments that were mounted against interest rate caps were that firstly the interest rate cap would become a target and therefore all lenders would suddenly raise their interest rates up to the level of the cap. Of course that certainly has not been the case in other jurisdictions. There is no reason to think that that would be the case now.The second reason was that interest rate caps would reduce access to short-term credit. This is where I come back to the problem of inequality and the problem of a lack of a living wage in this country. People should not have to access short-term credit to put food on the table. They should not have to access short-term credit to pay the power bills or to pay the rent or to make sure that their kids have shoes to go to school in. If these households do not have the means for the basics then that is the fundamental problem that we need to address. Not putting in interest rate caps means ultimately we are going to continue having the problem of spiralling out-of-control debt which is not good for our economy and it is not good for our people. That is what will happen. It is entirely possible.I would like to believe that the principles and the framework that has been set out in this legislation will be enough to address the problem—I hope that it is—but in the case that it is not how many years are we going to have to wait for a real solution? It took several years for this to come before the House. That is what would have to happen again if after several years we find that this simply was not enough. We should have at least put in place the possibility of introducing an interest rate cap—let it be completely independent from the Government let it be the Reserve Bank or someone else who decides. At least you would have the framework in place and you could try it and see what happens see if it works see if it does not work. Unfortunately it could take years. If this is not enough it could take years for us to actually address the problem.I think that the problems that we need to address are not simply interest rate caps; they are ensuring that families in New Zealand have what they need so that their kids can go to school and not be hungry so that they can learn and get a great education and have every opportunity that other kids have kids whose parents have higher incomes. They should all have the same opportunities. That is why the Green Party has introduced a number of positive solutions like our school hubs plan which would look after kids—Hon Simon Bridges: No that’s not on topic.JULIE ANNE GENTER: We would be continuing to roll out the home insulation programme which the Minister is quite happy to cut short. The Minister is not interested in extending the home insulation programme even though it has been very successful and it has achieved great health outcomes economic outcomes and job creation benefits. We would like to see that extended in Christchurch in particular because it is going to be a very cold winter for the people in Christchurch. So the Green Party has a number of positive solutions that would help address inequality in this country.We would also like to see further improvements in looking out for those communities that are the worst off the most vulnerable communities. This legislation goes some of the way but it does not go all the way. So the Green Party will be working towards a smarter greener economy and a fairer New Zealand for all New Zealanders not just those at the top. Thank you.