Boscawen John: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
Boscawen John: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
[Volume:657;Page:6048] 
JOHN BOSCAWEN (ACT) 
: 
 It is a pleasure to stand on behalf of the ACT Party to take a call on the Crown Retail Deposit Guarantee Scheme Bill. The ACT Party it would seem is the only party that is prepared to stand up and represent those 87 percent of people who voted No in the last referendum. ACT is the “87 Percent Party”. 
Hon Tariana Turia 
: What has that got to do with the bill? 
JOHN BOSCAWEN 
: It has a lot to do with it because we have heard comments this afternoon about “listening”. 
I have been listening very carefully to the debate and the first comments I would like to debunk are the comments of Clayton Cosgrove. In fact Clayton Cosgrove Russel Norman and David Cunliffe talked about the banking inquiry but had Clayton Cosgrove been a member of the Finance and Expenditure Committee had he taken a closer interest in its deliberations and the issues the select committee had been discussing and had he read some of the press releases of his own finance spokesperson Mr Cunliffe then he would have heard that the only concern was the rate of interest on floating loans. There was no argument whatsoever that the cost of borrowing long term was in any way outside the normal margins that banks should charge; the only argument ever if there was an argument was the concern about margins on floating rates. 
In evidence the committee was told that had the Government just left things as they were had it waited and continued to apply pressure to the banks that issue may well have been addressed in the course of normal market operations. We saw evidence of that last week when one of the big Australian banks moved to reduce its margins by 40 percent on floating rates. Mr Cosgrove has turned up at Parliament and talked as though he has some knowledge of the banking inquiry and what it was required to achieve but the reduction in floating rate margins would have been achieved without the Opposition’s so-called banking inquiry. 
I listened with great interest to the speakers prior to me—the Hon Bill English the Hon David Cunliffe Craig Foss Clayton Cosgrove and Russel Norman. 
Paul Quinn 
: Quite a list! 
JOHN BOSCAWEN 
: What a list! There is one thing that those people have in common and I wonder whether members can think what it is. I will tell them. 
Craig Foss 
: I have nothing in common with Clayton Cosgrove. 
JOHN BOSCAWEN 
: The member does have something in common with Mr Cosgrove because the member—like Mr Cosgrove Mr English Mr Cunliffe and Mr Norman—came to Parliament and achieved fewer votes in the general election than did constituents who voted No in his Tukituki electorate in respect of the referendum. Mr Foss may smile but that is a very serious issue. The last five speakers stood for electorates and received fewer votes than the number of their constituents who voted No in the last referendum. The members in this Parliament may not like hearing that fact but let me say to them and to members on all sides of the House that they will continue to hear that comment from the ACT Party because the ACT Party is prepared to stand up and speak for the 87 percent who voted No. 
Hon Tariana Turia 
: Ask the right question. 
JOHN BOSCAWEN 
: There were 87 percent of them. [ 
Interruption 
] I am hearing interjections from the Hon Tariana Turia and I give the member credit because she is just one of 14 MPs in this House who received more votes in her constituency than had constituents vote No in the recent referendum. She is just one of 14 members. We have 122 members in this House and 108 received fewer votes in the general election than had constituents who voted No. Of those 14 four are Maori Party MPs. 
Let us look at some of the things Mr Cosgrove said. He was frustrated by the fact that the National Party would not participate in the Opposition’s shadow banking inquiry. He thought that politics aside they would have listened to the people. He could not understand why National would not support an inquiry. Well I cannot understand why Mr Cosgrove and his colleagues will not listen to that 87 percent. 
Last night I held a public meeting in Mount Roskill and I deliberately chose Mount Roskill because that is the electorate of the Leader of the Opposition. Like those five previous speakers whom I have mentioned Mr Goff also scored fewer votes in the 2008 general election than the No votes in the referendum. But if Mr Cosgrove wants to lecture this House on the subject of listening I will give him an opportunity. 
Paul Quinn 
: Are you campaigning already? 
JOHN BOSCAWEN 
: I will come back to that. I intend to hold a similar meeting to the one I held last night in Mr Cosgrove’s Waimakariri electorate. 
Hon Tariana Turia 
: I raise a point of order Mr Speaker. I would like you to ask the member to stay with the bill not to talk about hitting children. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member makes a fair point. The member is entitled to make indirect references but he has become rather repetitious. I draw the member back to the Crown Retail Deposit Guarantee Scheme Bill and ask him to focus on that. 
JOHN BOSCAWEN 
: Thank you Mr Assistant Speaker. I am more than happy to do that because I have made the points I wanted to make. I might add that I intend to continue to make them. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: When the Speaker has ruled the member does not refer to the ruling. I invited the member to continue on the bill and that is why I offer the member that option to do so. If he does not wish to do so then I will discontinue his presentation to the House. 
JOHN BOSCAWEN 
: Thank you Mr Assistant Speaker. I should have made myself very clear. When I said I would continue I meant continue in the future and in future debates and in future sittings of the House. I certainly was not intending to challenge your ruling and I am sorry that the way I said that may have presented that opinion. 
I do intend to talk about the Crown Retail Deposit Guarantee Scheme Bill. This scheme was introduced at a time when the world was in turmoil as Mr English said. We had seen the collapse of Lehman Brothers we had seen the collapse of a number of major international banks and we had seen a time of financial turmoil like nothing in living memory; certainly for most members of this House and I think Mr English referred to the fact it is like nothing since the 1930s Depression. Clearly action was required and that action followed immediately after the action of the Australian Government. Of course the Australian Government and other Governments followed the initial action by the Irish Government. There is no way that the previous Labour Government had the option of not pursuing what was happening around the world and following those actions. 
One of the issues that overhung the market for financial deposits in recent months is how the country actually moves away from this deposit guarantee scheme—how it trades out of it. A system is being presented in the bill that enables the guarantee to be extended. It will be on tighter terms and the fees and charges made by the taxpayer will be market-driven. Sadly there will be losses. I expect there will be losses. Smaller companies will not be able to meet the requirement for a BB grading. They I suspect will be forced to call in the receivers. Their depositors who have loans that would otherwise be in default prior to October next year can be paid out in full. But undoubtedly those companies will also have depositors who have advanced those deposit-taking companies’ funds beyond October 2010 and those funds will not be guaranteed. Clearly they will not be paid out by the taxpayer so there will be losses for those bondholders. The Government is damned if it does and damned if it does not. If it simply decides to suspend the scheme and not allow it to continue beyond October next year I suspect many more finance companies will go into receivership and the cost to the Crown will be even greater. 
I commented earlier on speeches made by Mr Cunliffe and Mr Cosgrove on the banking inquiry. They used this opportunity to talk about the evidence submitted to the banking inquiry. One of the reasons this bill was needed was the worldwide collapse of confidence. We also had a collapse of confidence in our own market. Earlier this year I called for an inquiry at Commerce Committee level into finance company collapses and I am very pleased to say that last month the Commerce Committee chairperson the Hon Lianne Dalziel announced that the committee would be having an inquiry. I am very grateful to the National members of that committee and to the Maori Party member of the committee for their support.