Foss Craig: Financial Service Providers (Registration and  Dispute Resolution) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Foss Craig: Financial Service Providers (Registration and  Dispute Resolution) Bill — Second Reading In Committee 
[Sitting date: 23 September 2008. Volume:650;Page:19023. Text is incorporated into the Bound Volume.] 
CRAIG FOSS (National—Tukituki) 
: 
 Like earlier speakers and colleagues I say the debate on the Financial Service Providers (Registration and Dispute Resolution) Bill is like déjà vu all over again. We debated the Financial Advisers Bill this morning and for the record it was debated under urgency. It surprises me that we are under urgency on the Financial Service Providers (Registration and Dispute Resolution) Bill and that it is deemed to be more urgent than other bills. But I noted in the Minister’s speech the reason for moving this bill further up the Order Paper. She spoke about the cross-references between this bill and the Financial Advisers Bill which we passed a few hours ago. When I was looking through the Financial Advisers Bill it occurred to me that there are a lot of cross-references and in fact all the way through the process we have dealt with these bills in partnership. Anyway we are now debating the second reading of the Financial Service Providers (Registration and Dispute Resolution) Bill.  
An earlier speaker raised a concern that this legislation will come under the portfolio of the Minister of Consumer Affairs rather than that of the Minister of Commerce and I missed the bit about the Banking Ombudsman’s recommendation. I think it was that it be put under consumer affairs and not commerce.  
Hon Lianne Dalziel 
: It was preferred that it went under consumer affairs rather than commerce. 
CRAIG FOSS 
: I thank the Minister for clarifying that point. I realise this is not the Committee stage of the bill but it is all very friendly in here at the moment.  
On looking through the bill I see some issues that I started to raise in the debate on the Financial Advisers Bill are also pertinent to this bill. There was a part in that bill where we talked about information sharing and of course as the Minister earlier noted this bill forms a suite of measures—not only the Reserve Bank of New Zealand Amendment Bill (No 3) the Financial Advisers Bill and this Financial Service Providers (Registration and Dispute Resolution) Bill but also a raft of other bills. I think there were nine papers in total all around money-laundering etc. and a total review of all things financial in New Zealand. I think there are a few more discussion papers out there. That is good policy development and we are happy about that. We have enjoyed being part of the process around this bill and helping to make it better legislation.  
Earlier speakers have noted the events that have occurred subsequent to this bill appearing before the Finance and Expenditure Committee which I think was on 9 February this year. The financial crisis around the world has become much tougher. It has hit home here in New Zealand much deeper and quicker than many people thought it would but as we are part of the global financial system we will always be impacted on by what happens around the globe. The sad fact is that New Zealand as a debtor nation faces an increased interest premium that we have to pay and as we are No. 22 in the OECD we are at the back of the queue so any impacts and effects on economies around the world will be felt exponentially down here. Hopefully a change of direction—a change of Government—will start to address that position.  
I will look at just a few issues in the bill. There is a Supplementary Order Paper with this bill: Supplementary Order Paper 254 in the name of the Hon Lianne Dalziel. Again I give my apologies for missing this in my first speech but around the not-for-profit organisations in the Financial Advisers Bill there was a bit of sneaking in the door in that the only not-for-profit organisations that were originally to be covered were those that already had some contractual obligations or arrangements with the Ministry of Social Development. The Finance and Expenditure Committee in its wisdom did very well and turned that round talking about not-for-profit budgetary advice institutions etc. We had many many submissions from such groups and sometimes there were conflicting views which we found somewhat curious at the time. The core argument was about the cost of compliance for those organisations which may have annual budgets of only $25000 or so. The cost of initial set-up here would have been quite onerous for them.  
But I did note that the Minister had an amendment to the definition of a not-for-profit organisation in the Financial Advisers Bill. I have just glanced through Supplementary Order Paper 254 and although I may have missed something I do not see any new change there to the definition of a not-for-profit organisation. Perhaps I am missing something because like previous speakers I fully expected to debate this bill not tonight but perhaps tomorrow so I have not gone through that Supplementary Order Paper. I am quite happy to be corrected but I cannot see an amendment to that definition at the moment. Perhaps that issue may be addressed by officials or the Minister later on.  
There is good consistency between the two bills and again I say it would have been more consistent if we had debated this bill in conjunction with debating the Financial Advisers Bill earlier today. But much of the select committee’s work was about the consistency of definition and of process given what I have just said about not-for-profit organisations just to make sure the terminology we used was the same there was no arbitrage between the two bills and there was no opportunity for either bill to be exploited. Wherever possible across the select committee we did use the same definitions. We had the same discussions and in fact submitters spoke to both bills. As my colleague Simon Power noted earlier most of their energy was spent on the Financial Advisers Bill and this service providers bill was just sitting to one side important and pertinent though it is.  
There is a reserve scheme for disputes resolution which I find quite interesting. Basically that is the backdrop scheme if organisations have not found themselves the time or got themselves organised to do it but there is a very good point on page 11 of the commentary on the bill. It is again a credit to the select committee that the commentary notes that the disputes resolution body does not necessarily have to be a financial disputes resolution body because the issues are about resolving and mediating disputes rather than financial disputes. That is a small and subtle change and we took out just a couple of words along the way but none the less it is a good change because many people help to mediate or solve disputes in many fields. That is what they do and a dispute is a dispute is a dispute I would argue.  
There is a very good clause in this bill—and again there is a similar provision in the Financial Advisers Bill and in the Reserve Bank Amendment Bill (No 3)—which is the 5-yearly review clause. Again I highlight the consistency and tie-up between those bills and I presume any other bills that the next Government brings in will also be aligned to that time frame. I think that is very very healthy. Again that is because this bill and the Financial Advisers Bill are joined at the hip and then I guess holding hands with the Reserve Bank of New Zealand Amendment Bill (No 3). But also I say it is not a bad process to bring in for all bills that they have an ongoing review clause in them because particularly in the area of financial markets things change rapidly. What is being talked about in the headlines today was probably not even contemplated 4 or 5 years ago or even 3 years ago. So who knows what will be happening in 5 years’ time particularly with the globalisation of the financial markets etc.?  
I highlighted another point as to who must register. I spoke about the cost to the not-for-profit organisations so I will probably just end on that note. Again I say that we just found the amendment quite curious and I understood the Minister’s explanation earlier as to why it happened. But I would be intrigued to have it pointed out to me where the amendment or definition of a not-for-profit in Supplementary Order Paper 254 is the same as or aligns this bill with the amendment on the Supplementary Order Paper in respect of the Financial Advisers Bill that we saw earlier on this morning. Thank you very much.