Calvert Hilary: Third Readings — 
Text is incorporated into the Bound Volume 
Calvert Hilary: Third Readings — 
[Sitting date: 07 April 2011. Volume:671;Page:17854. Text is incorporated into the Bound Volume.] 
HILARY CALVERT (ACT) 
: 
 I rise in support of the legislation arising from the Financial Markets (Regulators and KiwiSaver) Bill. I sat on the Commerce Committee which considered that bill and I would like to commend the officers and everyone else involved who conducted the whole process excellently. New Zealand has the dubious distinction of being the first Western country to go into recession several months before the global financial crisis started. A big part of the reason was the collapse of dozens of finance companies since 2007 costing investors many millions of dollars. It was my colleague John Boscawen who led the campaign for an inquiry into finance company failures. He has heard many stories of mum and dad investors losing large portions of their savings due to actions that although not illegal were certainly unethical. The bills before us are in part a reflection of these stories as well as of course the recommendations of the Capital Market Development Taskforce. They are a recognition that the current fragmented regime did not have the ability or power to hold trustees to account for their often dubious actions. 
These bills also recognise that to have a growing economy we must have financial and capital markets that encourage people and institutions to invest. The establishment of the Financial Markets Authority will help foster such investment. The authority will not only replace the Securities Commission but also incorporate several other functions previously delegated to various other agencies. It makes perfect sense to bring these related responsibilities under the control of one organisation. 
The mission statement of the Financial Markets Authority particularly resonates with the ACT Party. Clause 8 of the Financial Markets Authority Bill requires the new Financial Markets Authority “to promote and facilitate the development of fair efficient and transparent financial markets.” As a defender of the free market ACT is definitely in favour of this. In order to thrive participants in the market place require confidence to invest. To have this confidence they need information and accountability—more than they are getting at present. If the Financial Markets Authority succeeds in its objectives we will hit hard those trustees who play loose with the rules. As a result we will have financial markets that mum and dad investors will want to invest in. 
We also welcome the crackdowns on unsolicited securities offers. In case we needed reminding of the importance of this a couple of weeks ago one such person a Mr Bernard Whimp made a timely reappearance with his latest lowball offer. Mr Whimp has made over $1 million by sucking in the unsuspecting. As business commentator Liam Dann said in the  
New Zealand Herald  
on 12 February: “The unsatisfactory part of the Whimp transactions is that despite being legal the imbalance of knowledge between the buyer and the seller seems too large and the degree of unfairness too great to stomach.” 
This legislation redresses this imbalance by requiring that warnings of a lowball offer be published on offer documents and on the website of the person making the offer. There will also be a minimum cooling-off period during which such investors can see the light. The select committee also recommended the disclosing of the market price of the securities. If investors after all these red lights forge ahead then so be it. The problem becomes theirs. That is fair. These bills after all will not make us immune to future individual and institutional failures nor should they. There is always a degree of risk and without risk there is no prosperity. 
I was alerted to a  
Breakfast 
 interview from a fortnight ago with  
Fair Go 
’s Gordon Harcourt—a man who has no doubt seen a few dubious business practices in his time. When asked about the problems of company failure he replied: “Company failure is not a crime and that is a good thing because allowing failure encourages success. If we wanted to live somewhere where company failure was a crime we could all go and live in Cuba or Venezuela where capitalism is illegal.” 
These bills represent big improvements on the current regulatory environment. Let us be clear. They take a dim view of costly regulations and red tape. As Minister for Regulatory Reform Rodney Hide has a bill coming before Parliament to prevent such follies before they happen. If passed the Regulatory Standards Bill will play a huge part in increasing the efficiency and transparency of the lawmaking process and will in turn make our economy more productive and prosperous. 
As the party of those opposed to pointless and costly red tape ACT does not accept new regulations lightly but it was ACT that led the drive to sort out our finance companies and although there is no such thing as the perfect law anything that increases the efficiency and transparency of our capital and financial markets is to be applauded. Such steps will help our fragile economy to attract the investments it needs badly to recover. Accordingly we support these bills.