Dalziel Lianne: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Dalziel Lianne: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
[Sitting date: 22 June 2010. Volume:664;Page:11962. Text is incorporated into the Bound Volume.] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to take another call because I am a little disappointed that we have not had any response from the Minister in the chair the Hon Tony Ryall. We have worked very collaboratively on this bill and I do not want it to turn to custard now. I have asked a serious question of the Minister and have not had the courtesy of a response. To be honest it is the Hon Simon Power who should be standing in the Chamber and explaining how the Supplementary Order Paper dovetails into the legislation that we have. I am not referring to anything that is out of order in saying that— 
Chris Tremain 
: I raise a point of order Mr Chairperson. It is taken in good taste that the Standing Orders prevent members from talking about other members who are not in the Chamber. The Minister is at the CER meeting in Australia and is genuinely unable to be here today. 
The CHAIRPERSON (Hon Rick Barker) 
: Firstly that is not a point of order. That is an explanation which is not about the order of the Committee. Secondly the Hon Lianne Dalziel did not say that the Minister was not in the Chamber and was absent. She said it was a pity he was not in the chair and making explanations. Now that is different but anybody who knows the Standing Orders knows very clearly that if the Minister were in the Chamber he or she would have to be in the chair and by joining the two facts together could conclude that the Minister was not. I am not saying that that was wrong but I just encourage the Hon Lianne Dalziel to continue and not to make reference to the Minister being out of the Chamber. But I do not want members to interpret my saying that as having said that the member did because I am saying she did not. 
Hon LIANNE DALZIEL 
: Thank you Mr Chairman. By way of that point of order and I am not referring to your ruling an explanation has been offered and it is one that I was not aware of. I think it is a shame when we have legislation of such significance as this. I am not objecting to the urgency. I have never objected to having urgency for this particular legislation because I know that the desire is to have it passed by 30 June and I have indicated to the Minister of Commerce that the Labour Opposition will support the passage of the legislation. But there is a serious issue to do with two matters in particular that have arisen since the bill was reported back. I have already mentioned the first one which is the question of the Mortgage Brokers Association. The way that this is being dealt with by way of Supplementary Order Paper—which is why I wanted a Minister to stand in the Chamber and put this on the record—is that new paragraph (d) has been added by Supplementary Order Paper 146 to new section 55(1) which is to be substituted by clause 13B. It states: “providing in any case that is specified in the regulations for the purposes of this paragraph services of the kind referred to in paragraph (a) or (b) or both but in relation to any category 2 product specified category 2 products or specified classes of category 2 products.” 
This is the provision that adds into the authorisation provision and I think that having a Minister read this into the record in the Chamber would be useful to the Mortgage Brokers Association. It is a shame that the chair of the Commerce Committee has to do the work of the Minister in the Chamber on this particular occasion. I am a little bit annoyed about that because I think it is discourteous to the Committee not to have the Minister respond to a very technical and detailed Supplementary Order Paper and read into the record which changes are being made. 
A debate is to be had about the methodology chosen by the Minister to address this issue because it requires those operating in the category 2 space to wait for regulations. No others have to wait for regulations in the way that section 55 has been used. So I think we are entitled to an explanation. I think the explanation probably is that it is at relatively short notice and we would like to put a regulation-making power into the legislation so that we can resolve this matter after the fact and do so in a way that indicates to the sector that it will have its needs addressed by way of regulation. That would certainly send a very positive message to the mortgage broking sector. Again I place it on record that I am very happy that it wishes to improve the quality of advice it is providing and that it wants to increase the level of qualifications its mortgage brokers will be providing by lifting those qualifications to the authorised financial adviser level. 
Having section 55 amended in this way may just simply be because of the pressure of time. If that is the case we should have that read into the record. Then there will be comfort going to the sector that the regulations will be forthcoming from the Government in due course and in time for the legislation to be implemented. 
What we do not want to see happen is that the people enrolled for these higher-level qualifications are pulling out of the qualification course because they no longer need to do it. There is a risk of that happening and I have heard that it has happened. Well I think that is pathetic and I do not think that anyone worth his or her salt should even consider contemplating pulling out of a course that he or she has enrolled in. That person has committed to a particular course of action and I think he or she should continue down that path. I want to discourage people from doing that. 
As a result of this amendment in Supplementary Order Paper 146 and once regulations have been passed this legislation will enable those operating in the category 2 space to be authorised financial advisers and to therefore meet the requirements set by the Securities Commission for their authorisation in that space. It means that they will be authorised in that space for the products they are dealing with. I think that sends a very positive and powerful message out there to the wider industry in terms of quality standards and that is a very good thing. But it would be helpful to have a Minister in the chair who was prepared to right the record as it were in the manner I am proposing. 
The second area relates to a concern expressed in an email that has been sent to the Minister of Commerce. It was sent on Monday and it was copied to me other members of the committee and other Ministers. It relates to the concern that we still have not quite carved out those who need to be carved out—and we have done quite a bit of carving out with this bill. We wanted to make it clear that some things in the area of financial service are not really financial advice. We identified services performed by those operating as retail assistants for example. They help people to fill out their applications for hire purchase for the goods they have purchased. This is in the credit space gathering information for an application for credit. It was not seen to be covered by this. Other law deals with that subject. That sits very clearly with the Minister of Consumer Affairs and changes need to be made there. 
I should just put on the record that after the comments we have already heard in the Chamber on this bill the Government should support Carol Beaumont’s member’s bill on loan sharks. We definitely need to have some tightening of the regulations in that area. I think that is important and I will make the point that the Government should definitely support Carol Beaumont’s member’s bill when it comes up for a vote. We will certainly be repeating back some of the comments that have been made today about those who are vulnerable in the financial sector and certainly those who are the victims of loans sharks are vulnerable in that sector. 
The concern has been drawn to our attention—and this is on behalf of Farmers Trading TaxiCharge the New Zealand Taxi Federation and Telecom—that we have not quite undertaken the carve-out sufficiently. Concerns are being raised that we have not quite got that exactly right. I would like the Minister to place on record a response to Marketing Law which has raised these particular issues with us. The first issue is that the Act will apply to many industries that were not contemplated by the Financial Action Task Force on Money Laundering requirements and that have not been consulted. We heard its submission in a very positive way. We took it on board. We were very clear that we had undertaken the carve-out so that is why we need to have it on the record that the Minister agrees that we have appropriately carved them out. 
There is a question around access to justice denied to financial service provided. This is around binding rulings of the dispute resolution scheme which is in new section 49D of the bill. This is where the complainant can apply to the District Court for review of the final settlement. The dispute resolution scheme provider can apply for a review but there is no provision for the respondent financial service provider to apply for a review. Even though the District Court is empowered to amend a manifestly unreasonable provision it can do this only on the application of the complainant or the dispute resolution scheme provider. The District Court said that this conflicts with section 27 of the New Zealand Bill of Rights Act which is why it has copied this to the Attorney-General. That section addresses the right to justice for every person. The District Court said that there is no mutuality of rights and the financial service provider legislation will prevail over section 4 of the New Zealand Bill of Rights Act.