Jones Shane: Westpac New Zealand Bill — In Committee 
Jones Shane: Westpac New Zealand Bill — In Committee 
[Volume:672;Page:18808] 
Hon SHANE JONES (Labour) 
: 
 Tena koe Mr Chair. I stand now at a quarter to 5 to make a contribution on this private bill the Westpac New Zealand Bill. I go back to the year 2000 when the Reserve Bank originally announced its intention in respect of a requirement of our banks especially those that—well we do not have any serious banks other than Kiwibank—could at this stage be what we might call Kiwi indigenous banks. Of course Kiwibank faces the threat of privatisation of sale as a consequence of the current Government but that is another matter. 
When the incorporation policy was originally introduced it was designed to deal with systemically important banks. There was a sense that if banks were large enough to materially affect the operation of the financial sector as a whole they needed to be incorporated here in our country so that the people who might suffer—perish the thought—in a run on a bank and a collapse of that bank had access to the assets and that the parent company would be unable to wriggle off the hook. Not that I am suggesting that the Aussies would do that to us but who knows. Secondly it was designed to deal with the issue of those banks that take a significant level of retail deposits that come from our own contributors and to ensure that at the point of a winding up the deposits remain available for those of us who have had the privilege the good luck or the fruits of good stewardship and who enjoy savings—savings that may be soon to disappear as a consequence of foolish decisions likely to be revealed tomorrow but that is another matter. 
It was pointed out that the Australians and the Americans had this standard in their banking sector so it was not unrealistic that New Zealanders should embrace it. It is rather strange that we should be focusing on the Westpac Bank because no one fought this more doggedly than Ann Sherry the chief executive officer in the early period of time who felt that it was an overreach that it was far too intrusive and that no Aussie bank would turn its back on Kiwi depositors etc. A great debate went on during that period of time. I cast no personal aspersion on that woman who is currently running a successful cruise line company but during her period of time there was spirited defence of the position and not surprisingly it is an expensive exercise when a bank has to go through this incorporation process. 
I am talking about points that were announced in 2000. We have lived through the last 3 to 4 years and we have seen how close we came as a country with our banking sector clogging up and other countries far richer than ours suffering runs on their banks. Full marks go to the advisers and the governorship of the Reserve Bank who contemplated at a time when none of us thought that we would go through the kind of economic downturn that we are now suffering. 
This is technical legislation and we have no compunction whatsoever in standing with our colleagues on the other side of the Chamber to support it. Indeed I think I was the chair of the Finance and Expenditure Committee in 2006 when we dealt with the first dare I say it variation of this legislation. 
It is important when dealing with the preamble that we isolate one of three things so that those MA students of the future look back to the contributions that are made today. Unfortunately these contributions will be overshadowed by the negativity of tomorrow. I repeat one of three things that were said by our colleagues: it is a vesting of liabilities and assets. It is about the stability—or should I say the solidity—of the system. A number of those assets and a number of those liabilities pertain to a sector that the front page of the  
Dominion Post  
has accurately captured this morning. It is extraordinary when we are talking about the banking sector—the assets and liabilities and the concerns about the importance of incorporation—that members opposite are not making any reference to the large burden that lies on the banks’ balance sheet from the farm sector.