Wong Pansy: Securities Legislation Bill — Second Reading 
Wong Pansy: Securities Legislation Bill — Second Reading 
[Volume:629;Page:1339] 
PANSY WONG (National) 
: 
 Reflecting on the contribution made by Russell Fairbrother I cannot help but hope that Labour will bring back Mark Peck. I am sure that he would give the House a lot more inside information and more intelligent feedback on this legislation. I will be followed in this debate by a very hard-working intellectual National member Chris Tremain. I am sure that he will show the House further why he won the seat of Napier over Russell Fairbrother judging by the quality of that speech. 
The first thing I noticed from the report back of the Commerce Committee on this securities legislation was the extensive amendments that have been made to the bill. I acknowledge the members of the Commerce Committee in the last Parliament which my hard-working colleague Brian Connell who has great flair was part of. A technical bill of this nature is hard to digest and it takes members a lot of effort to get their heads around the issue. It is also a sad reflection on the fact that the Minister and the ministry could have done a much better job with their resources to make sure the legislation got it right in the first instance. 
I remember that not that many years ago the Hon Paul Swain when he was the Minister of Commerce made a lot of song and dance about riding into Parliament armed with a raft of amendments to the Takeovers Act and the securities legislation and he said that he would end the wild Wild West of the New Zealand securities market. That was not that long ago yet suddenly the House is faced with another raft of amendments to the takeovers and securities legislation. I have not seen many trophies paraded by the former Minister as to the benefit of his ending the so-called wild Wild West of our securities market. Indeed I have in my hand a press release from the Securities Commission today. The Securities Commission conducted a financial surveillance programme and it has picked 46 issuers of various financial instruments and according to the commission out of that number 19 have some shortcomings. One of them has a large discrepancy between actual and prospective information. Another one is an apparent overstatement of the value of property intended for sale. But apart from that the other 17 issues that it identified were to do with wording naming and failure to sign the financial statements. 
I agree with the Securities Commission that what is needed to improve the integrity of New Zealand’s security market is nothing more than ensuring high-quality reporting standards and making sure that the market is well informed. I actually disagree with the former president of New Zealand First Doug Woolerton who continues to think that the New Zealand mum and dad investors need a whole raft of legislation from the Labour caucus—which has no appreciation of how business is conducted—to protect them and advise them. I think that individual New Zealand investors are very intelligent. All that they need is a good disclosure information regime for them to make those intelligent decisions. 
The reality is that the Labour Government never has any idea about and no respect for reward for risk taking and return on capital hard work and innovative ideas. Without that attitude Labour members continue to try to pass legislation. They think that they can legislate the economy to grow to motivate investors and to divert investment from property to other financial instruments. One has only to reflect on the Prime Minister’s opening statement when she said that her answer to growing the New Zealand economy is to have not just a review but a major review of business structure and a fresh look at the regulatory environment whatever that means and whatever it would contribute to the growing economic cycle. For example earlier today the Labour Government introduced the Insolvency Law Reform Bill to introduce certainty in the financial failure and business recovery process in order to allow early intervention. Those types of lofty ideas certainly do not connect with the real business environment. 
It is true that New Zealand investors tend to favour property but that is not a new or unusual phenomenon because it happens overseas. Most individuals want to own their own homes plus more investment in properties. In some countries property prices are so high that individuals cannot afford to do that and also there is the attraction of other investment products. So overseas investors tend to diversify their portfolio more than New Zealand investors back here. Therefore the key is to encourage the availability of more diversified and attractive investment products and confidence in the capital and financial markets. But that confidence can only be partly provided by the existence of laws that spell out the rules and the penalties for breaching those rules. The other part has to be the enforcement of the law. We have learnt of the heavy workload of the Commerce Commission. My colleague Brian Connell has just raised the issue of enforcement. The Labour Government is particularly interested in passing legislation but it is the enforcement and the resourcing of the agency to enforce that legislation that really amounts to something. 
We have learnt of the heavy workload of the Commerce Commission. I want to know whether the Securities Commission etc. will get additional resources with the passage of this legislation. What is most important is that New Zealand has a vibrant environment and an open disclosure regime to allow investors to make an informed decision. A prime example is that we have seen the formation of small shareholding groups that are holding companies to account at AGMs. They are not funded by Government or by bureaucracy. They are individuals who have a stake in the company and all they need is consistency of law and a disclosure regulatory framework for them to have the information to hold those directors to be accountable. 
So no matter how many bills Labour aims to introduce to improve the market its attitude of anti-business and return on capital will ensure that New Zealand’s capital and financial markets continue to lag behind. Imagine the obstacles facing any small business wanting to grow and wanting a listing on the stock market and the bureaucracy tied up in the growth of business. I think that the barriers to the thriving of New Zealand’s securities and capital markets are due to the contempt and distrust of Labour towards business and investors getting rewarded for taking risk or wanting returns on their capital. Unless that type of attitude is changed we can spend lots of time in this Parliament passing various bills but I am not too sure the financial and capital markets will benefit hugely from those changes.