Watts SimonSIMON WATTS (National—North Shore): Mr Speaker thank you very much for the opportunity this afternoon on a Thursday to discuss the Financial Markets (Conduct of Institutions) Amendment Bill second reading. One thing that you notice when you listen to speeches that go before you is that a lot of the conversation today one relatively short—but in terms of the actual ability to add any specific detail in regards to what actually is going to happen as a result of this legislation it's pretty narrow. So I want to talk a little bit in regards to this legislation because my background and experience is in banking and finance having spent most of my career working in banking. Looking at this legislation in effect the purpose is in order to require financial institutions—so banks and other institutions like that—to comply with prescribed regulations regulations that mean that they need to do things around sales incentives or meet conduct or licensing. For those at home I'll give you a clue what that is. That's just regulation compliance and burden on business. And what you'll hear from the other side of the House is that this legislation is out to protect the consumer. But what I heard listening to some of the speeches that have come before is actually an ideological attack on these big entities saying they are big bad banks. Well one of the biggest banks in this country employs 9000 Kiwis hard-working people across this country that work in that institution. So when you attack that big business" you're actually attacking all of those individuals within that entity. This legislation is absolutely a legislation or a solution looking for a problem. And I'll tell you why that's the case. Because the Reserve Bank of New Zealand and the Financial Markets Authority (FMA) undertook two projects looking at the conduct in regards to financial institutions in this country and that was off the back of what was rightly so inappropriate behaviours that were occurring across the Ditch in Aussie. But I can tell you what: New Zealand is not Australia and luckily it isn't. But I can tell you in regards to the way in which our financial institutions act it is night and day in regards to that. Our financial institutions in regards to this legislation actually have a number of controls and monitoring and processes in place to deal with some of the issues around conduct that this legislation is meant to deal with. This legislation is not necessary in this country. It's regulatory oversight and burden on a business trying to deal with a problem that doesn't exist. It's not just me that is saying that this is a problem that doesn't exist. The actual findings of the Reserve Bank NZ and FMA review did not find major systematic misconduct when they looked at New Zealand's financial markets. I'm not sure how much clearer one needs to be in terms of a report but as I said this bill is looking for a problem.The challenge that we see with this Government time and time again is the increase of cost burden on hard-working Kiwis in this country. Middle of New Zealand is squeezed at the moment and this legislation will bring an increase in burden an increase on red tape on businesses that will be passed on to consumers. So you hear the lovely comments on the other side about "Oh this is going to be great." Well I tell you what: for those hard-working Kiwis in Hamilton in the North Shore in my electorate or in Southland with my colleague in front of me they're the ones that will end up being burdened by the cost impact of this regulation and compliance in this bill. It is legislation that is unnecessary. It is ideologically driven by a Government that says "Well Aussie's doing it; we might as well do the same." Well I tell you what: we are different in that regard and there is no need for us to go down this path because the value created is not going realise the benefits that are needed and have been realised in other countries because we don't have the same problem.The legislation also looks at sales incentives. And I heard from the other side "Oh we can't have sales incentives; that's a bad thing." Well that shows you a number of individuals have never worked in business would not have a clue how to try and incentivise people to sell things. I don't need to go back to the people that you know in terms of a sales culture—but a little bit of incentive financially in order to get things done is not a bad thing you know? We shouldn't have Government overreach in order to try and put regulation like this bill that is going to force and try and control that aspect. The other aspect is that the Reserve Bank and the Financial Markets Authority (FMA) conduct and culture review found little evidence of widespread banking-conduct issues in New Zealand. And the small number of issues that they found actually related to individual people. It wasn't widespread or systematic issues with the system. And you'd expect that; it's a complex business—it's a big business. I mentioned one of the banks has got 9000 staff. So you don't need to be a rocket scientist to expect that you're going to have a couple of people in this country that maybe haven't followed the rules appropriately. But what I am confident about is that the banks and the financial institutions in this country treat this very seriously already. They don't need this legislation coming in and putting a burden on them and side tracking them from focusing on what they want to be focusing on as well and that is supporting their customers. I tell you what: business do things quite well. They actually understand how to focus and work with their customers how to get value how to achieve outcomes and how to deliver. But again this legislation is going to place a burden and red tape on those businesses. And then when the FMA and the Reserve Bank did not find evidence of systematic failure in the current model of sales incentives why are we trying to put in place through this legislation limitations and restrictions in that area? It simply does not make sense.In the short amount of time that I've got left I wanted to reflect on the fact that the backdrop of this bill is in the backdrop of where Mr Grant Robertson is going to prepare and announce a Budget with $6 billion of additional spending. Kiwis are under a lot of pressure and legislation such as this conduct bill on financial interest on financial markets is going to put more burden on those hard-working Kiwis. And it simply shows that we have got a number of aspects that we could be focused on in this House but we aren't using the opportunity to put that through because as I said before there is very little evidence or they did not find any evidence at all in regards to the problems that this legislation is meant to be dealing with. So that's a real great shame. It's a disappointment in terms of the fact that the opportunity here by this Government is actually to do something positive. They've decided in this case to focus on the ideology of attacking a big business a big bank because they're "big and bad" which is not the case. Who funds the mortgages of hard-working Kiwis? Who funds the loans and finances of our agri-sector? Who funds the investment required across our businesses? Well our banks do. They're part of a system. They're part of the solution. And they do a good job in terms of supporting those people and they employ a heck of a lot of Kiwis across this country Kiwis that are hard-working and that I for one am proud of. I am going to finish it there. The National Party strongly oppose this legislation. It is unnecessary legislation. It is not required. It is not going to add value. It is a solution looking for a problem and I do not support this legislation. Thank you."