Bennett David: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
Bennett David: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
[Volume:657;Page:6094] 
DAVID BENNETT (National—Hamilton East) 
: 
 In regard to Part 2 of the Crown Retail Deposit Guarantee Scheme Bill I will touch on a point that the previous speaker made. The previous speaker from the Labour Party was talking about a so-called risk premium. Basically he was saying that international investors will require the New Zealand Government to maintain the scheme and that to get out of the scheme would be very expensive for our Government and our country. Well that shows the level of knowledge of the financial system that the Labour members have. Maybe I was wrong. Maybe Labour members do need an inquiry so that they can learn what is going on in the financial system. Maybe it should not have been an inquiry. Maybe it should have been an educational trip for the Labour members. Even better than that maybe they needed to create a forum where they could discuss things come up with a policy agenda and write up a series of reports to file amongst the Labour Party so that they could be framed and members could say that they are some of the great leaders of the Labour Party like Michael Cullen. He was known for doing a series of reports so that Labour members could be comfortable with some paper behind them. Unless they have paper behind them Labour members do not care. They do not understand— 
Stuart Nash 
: I raise a point of order Mr Chairperson. We are debating if I am correct—and correct me if I am wrong—Part 2 of the Crown Retail Deposit Guarantee Scheme Bill and so far all I have heard is Mr Bennett talk to those beside him. He keeps looking in their direction but I have not heard one word at all about Part 2 of this bill. 
The CHAIRPERSON (Eric Roy) 
: I think the point is well made but I could have directed it to some of the member’s colleagues at odd times as well. By and large they have been very good but there have been blemishes. I ask Mr Bennett to debate Part 2. 
DAVID BENNETT 
: I think that is fine leadership from our Committee Chair who has shown a good understanding of what both parties have been saying. 
In going back to the Crown Retail Deposit Guarantee Scheme Bill I point out that the previous speaker talked about a risk premium. Let us put it this way. If anybody had any idea of the financial system especially the Australasian financial system he or she would understand that in Australia and New Zealand the banks are trying to get out of retail deposit guarantee schemes. The banks in both New Zealand and Australia are in a situation now where they believe they have weathered the worst of the storm and therefore they do not think they need this kind of legislation. That is the reality of the situation. The Labour members needed that banking inquiry so that someone could tell them that but most other people would have found that information if they had been aware of the market and taken due diligence rather than having to argue it through the debate on the Crown Retail Deposit Guarantee Scheme as we have tonight. 
When we look at Part 2 we see that it essentially goes to the heart of the matter. It talks about what the bill entails in the sense of the Minister’s ability to specify the types of entity and criteria the Minister’s ability to give a guarantee recovery of money the assumption of creditors’ rights and payments in respect of the guarantee. The heart of this legislation is in Part 2. It contains the components that we have been talking about in regard to the Minister of Finance and the Crown Retail Deposit Guarantee Scheme. 
What has happened in the financial situation in New Zealand in the last few months and the situation is reflected by our Australian neighbour is that due to the stability afforded to the financial system in this region through the Australian banks performing extremely well the need for this guarantee scheme has in essence waned. This legislation is a very good sign for the New Zealand economy because it shows that we do not need the props of that guarantee scheme as much as we did 9 to 12 months ago. It shows the incredible stewardship of the economy by this Government which has managed to make the right decisions through its budgetary process and has continued through that process to give New Zealand and international investors a sense of security about the financial leadership of New Zealand and the security of our financial markets and our banking system. 
It is a good sign for New Zealand that we are able to do this. The Labour members are voting for it because they know it is a good sign. They should be applauding the National Government for making this good sign a reality within such a short period of time. But they cannot bring themselves to do that and they have to hide behind banking inquiries and suchlike to try to console themselves about their financial woes. The guarantee scheme was started by the previous Government at the end of its political term but it was a bit of a rush job and it was done only because the Australians did it.