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Macindoe TimHon TIM MACINDOE (National—Hamilton West): Kia orana Madam Assistant Speaker. During the committee stage of the debate on this Accident Compensation Amendment Bill I asked the Minister for ACC several questions about it which he chose to ignore and as he customarily does he chose instead to abuse me and to ignore the questions. He has just outlined the main provisions of the bill so I acknowledge that but unfortunately those questions went unanswered and there won't be any opportunity for them to gain answers now.He has of course today been celebrating the fact that some levy reductions for ACC earners and payers are possible. That of course is thanks to the responsible stewardship of the previous National Government and I was pleased that he has just acknowledged that much of the work on this particular bill was brought about by the Hon Michael Woodhouse. He didn't however of course today acknowledge that about two-thirds of New Zealand motor vehicle owners now face an increase in their levy—in the ACC levy.Hon Iain Lees-Galloway: I raise a point of order Madam Speaker. This is the third reading of a bill. The point of the third reading is to summarise the policy contained within the bill and I encourage the member to actually address the bill that is before the House currently.ASSISTANT SPEAKER (Poto Williams): You are correct. I was looking through the bill and I was struggling to find the section on the levies within it so if we could come back to the third reading of this particular legislation that would be great.Hon TIM MACINDOE: Of course. It is a very minor technical bill. It originated under the National Government. As I've just acknowledged the Minister has outlined what its main provisions are but I am very disappointed that he failed to answer any of the questions and now he's trying to interrupt my contribution.So I'll just make some very brief points. The first is that because it is a bill that originated under the National Government of course we will continue to support it. The fact that it is such a minor technical adjustment means that most New Zealanders won't even notice that it's passing this afternoon. More importantly this Minister has indicated in the past that he intends to make more substantial changes to the legislation. I have been hoping through this particular process that he would tell us what those are because those who came along to submit to the Education and Workforce Committee asked those sorts of questions and they're still waiting to hear the answers. Well clearly they're not going to get them today but there's no reason to delay the passage of this particular bill so I too commend it to the House.
O'Connor GregGREG O'CONNOR (Labour—Ōhāriu): This is a bill that really stands New Zealand apart as a very fair country. I think those of us who've watched different regimes around the world—we start I suppose with communism—I think we all agree there was no competition. The State ran everything; it was pretty much a failure. But look at the other side where perhaps most of our ancestors came from. Many of our ancestors came from Victorian England—the place was one big cartel. Look at the United States: the necessity for the anti-trust bills—the Sherman Antitrust Act of 1890. That was what happened when you actually had cartels. In fact the biggest losers were farmers. The biggest people who pushed that legislation in the United States were actually farmers because the result of those massive cartels over there brought about the antitrust.New Zealand's a very fair country; we're a very balanced country and I think as we're seeing the world is looking at New Zealand as a country that generally gets it right. So this is about making sure that we do have that fair environment; that we get the balance right between what is competitive behaviour and what is too much State interference and I think this is actually getting it about right.One of the questions asked by the previous speaker Lawrence Yule was: where does this make a difference? Many of them presumably have sat on boards and as we all know—and we've seen many of the criminal cases; many of the cases where organisations have gone broke for want of a better word—when they've been dissected often it's one individual. Often it's the CEO; it may be the chairman of the board. Those decisions are made and many of the directors have probably been relatively unfairly treated. They have been dragged into this. When it's actually been dissected it's often been one individual or two individuals who have actually dragged the organisation into the position they've found themselves in.This is where the criminality comes in. Those people go; they can be sacked. The company and shareholders of the company will have to pay the fines. But this way it ensures that those who are sitting around that board table those who are advising the board those who are sitting around making these decisions will just look over their shoulder and think Actually it's not only a sacking in this it's not only a bit of reputational damage; I may end up in Rimutaka Prison." I suspect that's probably why after all those magnificent speeches by those opposite when the criminal provisions were being considered and agreed with it was pulled at the last minute. I suspect there were those who were afraid that it would be—those who would go to jail those that would end up sitting in Rimutaka where they belonged were afraid that that would actually happen.So that is why having a criminal element to this is actually essential. It means there are some things you simply cannot walk away from. I commend this bill."
Yule LawrenceLAWRENCE YULE (National—Tukituki): It's getting late in the day but I think the real issue we're dealing with here is whether in fact adding a criminal element to the existing legislation will make any difference whatsoever. We can hear about other countries—we can hear about that—but I'm yet to hear in a speech or through any of the select committee material of an example in New Zealand where criminalisation would have made a difference or where it couldn't be dealt with under the civil proceedings. So what this is going to do yet again—and this new Government is very good at doing this. When you go to do something you have another tick-box exercise and you ask another lawyer another accountant or another business analyst Can you check out this? Can you check out this before I go and buy that company or expand into another region because how this might work could come back to bite me?" I think we as New Zealanders don't always have to follow what other countries are doing particularly if our culture is different and particularly if there is no discernible risk and I haven't seen any of that explained throughout this whole process. So we have a civil proceedings arrangement. It has substantial fines as Mr Falloon my colleague said previously that have never been fully used. Then I listened to the Hon Andrew Little who talked about the consumers being ripped off by cartels. You name those organisations where by sending somebody to jail it would have made any difference and where that can't be dealt with under the civil proceedings regime. So we don't support the bill. On this side of the House we actually don't like cartels but fundamentally we see no value whatsoever in criminalising the behaviour nor throughout this whole process have we been shown any examples of where putting somebody in jail in a criminal way would have made any difference to that behaviour. So we can't support this bill on that basis."
Tinetti JanJAN TINETTI (Labour): I'm delighted to stand here this afternoon and speak in favour of this bill. I am delighted to have followed so many good speakers on this side of the House and on our Government benches who have been an absolute positive strength to this bill. I think it is a great bill. It is not one as I've stood here and said before that I've actually sat on the select committee of but I remember sitting in the committee of the whole House being absolutely fascinated at the arguments that were being put forward. I reiterate that this bill is an important element in this Government's reform programme and it strengthens New Zealand's competition law in line with some of our major trading partners. I'm not sure why the Opposition don't understand that. Internationally most of our trading partners have criminalised cartel conduct. Let me read some of those out: Australia Canada the United States and the UK—all very very important trading partners. The fact that we are bringing this regime in now is something as my colleague Mr McAnulty has previously said that the previous Government just didn't have the confidence I guess to do. I'm not sure they had said—they chickened out.Greg O'Connor: Your own mates were going to jail.ASSISTANT SPEAKER (Poto Williams): Order! Order! Mr O'Connor not appropriate.JAN TINETTI: Bringing this particular piece of legislation in means that we will see greater collaboration with other jurisdictions. We know that cartels can cross borders; we understand that. This means that aligning our laws with those in other jurisdictions will allow the Commerce Commission to participate more fully in international cartel investigations. It's not hard to understand that. On that case I have no hesitation in supporting this bill and commending it to the House.
Walker HamishHAMISH WALKER (National—Clutha-Southland): I just want to acknowledge Kieran McAnulty that last speaker on the other side there—that was very passionate. Unfortunately the claims the evidence and the facts just don't stack up but I can tell that member one thing: there will be a criminal cartel between the Labour Party and the National Party this weekend at the parliamentary rugby game as that member and I are both playing. If you look at the facts and if you look at the submissions we had 20 people submit including Business New Zealand the Franchise Association of New Zealand Horticulture New Zealand and the Institute of Directors. Not all of them opposed this bill. Eleven were opposed and nine were in support but most of those nine in support did support criminalisation only in some circumstances. Just a couple of them: submitters who opposed the bill said there was no evidence of a problem here with the current regime and Andrew Falloon the MP for Rangitata made some very good points. They were concerned that criminalisation would have a chilling effect on competition and business and for that fact National does not support the bill.
McAnulty KieranKIERAN McANULTY (Labour): Oh do I only get five minutes Madam Assistant Speaker? That is bitterly disappointing. Oh I probably won't use them because it's a great bill and there's no point in going on and on about that on a Thursday afternoon. This is a marvellous bill and another example of this Government doing what needs to be done and doing what the previous Government didn't have the courage to do because of course they had the opportunity. The previous Government brought to the House criminalisation provisions in their own bill and they chickened out. They chickened out for whatever reason. They've had the opportunity to explain it and I don't think they've done so adequately. They had the opportunity to bring in these provisions and they pulled them out. I believe it was the Hon Paul Goldsmith. He became the Minister of Commerce and I believe he took over from the Hon Craig Foss. Now that was a top bloke. The old Craig Foss—bring back Fossie". So Paul Goldsmith came in and he took them out through a Supplementary Order Paper and it seems they failed to recognise that Australia Canada the United States and the UK—our main trading partners—had criminalised cartel behaviour because cartel behaviour is quite outrageous really when you think about it. You've got price fixing. That's the sort of behaviour that not only consumers but also businesses do not want to see in a market and it's about time that we had a progressive Government that came in and actually took a stand on these sorts of things. I note but I won't go through the long long list of quotes that I have written down here from the Hon Craig Foss from Simon O'Connor from Brett Hudson and from the former Minister of Commerce the Hon Jacqui Dean all of whom at various times when discussing the criminalisation of cartels were in favour of doing so. Now when they're in Opposition and it's this Government that's bringing it forward they don't like it. I think it's another example of when it's their idea they like it but when it's our idea they don't. What a shame. I've got no hesitation in commending this bill to the House."
Falloon Andrew; Williams PotoANDREW FALLOON (National—Rangitata): Thank you Madam Assistant Speaker. I sat on the Economic Development Science and Innovation Committee that considered this bill and I went into it with quite an open mind but two particular issues really stood out for me during the process that we went through when meeting with officials and also discussing it with submitters. The first one is the chilling effect that this bill would have on well-intentioned individuals and well-intentioned businesses and the second point that really came out was just in relation to the very substantial regime that's already in place for civil proceedings. I listened with interest to the previous member Jan Logie and she mentioned some of the low fines that have been handed out. Well I'll just read for that member some of the evidence that was presented to the select committee which is that As at 2011 only 16 alleged price fixing cartels had been the subject of civil decisions by the New Zealand courts during the preceding 25 years and the maximum civil penalties have never been imposed."—they have never been imposed the maximum penalties. So I ask the Government what is the problem that they are trying to fix? If their concern is that there aren't substantial penalties well you just have to look to the courts and see that the maximum fines have never been handed out to anyone. So that's where the problem lies not with the legislation. It's never been handed out; so we don't believe that this bill is necessary and we won't be supporting it on that basis. ASSISTANT SPEAKER (Poto Williams): I understand that this is a split call. Kieran McAnulty—five minutes."
Logie JanJAN LOGIE (Green): Thank you Madam Assistant Speaker. The Greens are happy to join the other parties on this side of the House to in fact celebrate this piece of legislation that's been a really really long time coming. I understand that the legislation first came into the House to criminalise cartel behaviour in business in this country in 2011 introduced by the then National Party Minister the Hon Craig Foss and that was in recognition that cartels are economically damaging and that criminalisation of that behaviour would lead to a higher duty of care by company directors and protection for the interests of consumers in New Zealand.Now for people who may not be like incredibly over the language of this and these kinds of ideas a cartel conduct is agreements between rivals to lessen competition between them and it includes agreements to fix prices or restrict output or allocate markets. So I think in terms of just linking back to the previous speaker Melissa Lee the point that's significant is between rivals" to make agreements around fixing prices not internal pricing decisions of companies. So that is one point.I would also say that the idea that this will have a chilling effect on competition also seems strange when this criminalisation of cartel behaviour is recommended by the OECD and is in place in many countries around the world. We're actually quite far behind other countries like Australia the US Canada the UK Japan Ireland and Korea. They've all already criminalised cartel behaviour. So finally now we are in 2019 after the first attempt to do this by the National Government started in 2011 and I'm sure many more countries have actually caught up with what the OECD's been recommending.So it's good good good that New Zealand is finally getting to the point of doing this because we know that New Zealanders lose out when we don't have a strong prevention regime in this area. I do acknowledge that the previous Government did manage to strengthen the penalty regime because what they had back then was a pretty low fines structure and even I think the first case of using the legislation resulted in a $5 fine for the businesses who were found guilty of price fixing. But we know that actually there needs to be a disincentive and that the best practice is to criminalise the behaviour. I think it really is an issue of a form of white-collar crime because it is looking to maximise the profit for businesses at the expense of New Zealanders. I think it's fair that this House criminalise that behaviour as is best practice internationally and so the Greens are very happy to support this."
Lee MelissaMELISSA LEE (National): Thank you Madam Assistant Speaker. I stand in opposition to this bill. One of the things that the member who just took his seat Fletcher Tabuteau actually talked about was in terms of promoting competition. Well that is the question. You know we have to actually understand: does the cartel regime promote competition in the long-term interests of consumers? Does it in fact do that promote competition? Because competition is a good thing but the thing is that this cartel criminalisation regime will actually have a chilling effect on competition. For example joint bids for contract could be deemed a cartel behaviour. It could be anti-competitive or pro-competitive depending on the perspective of the person who actually looks at it.Brett Hudson: Anti-business.MELISSA LEE: It is very anti-business thank you Mr Hudson. I totally agree with Mr Hudson that this bill is actually anti-business. The earlier example that the Hon Jacqui Dean gave was a mistake by a business who was trying to promote his business online to sell a particular product but he was deemed a cartel.When you actually think about the word cartel" often you think about things like a drug cartel you think about some sort of a criminal conglomerate but the thing is that with this statutory definition that we currently have cartels are currently regulated. The kind of behaviour we're talking about is price fixing and often price fixing happens in a business that is trying to do a sale for example. McDonald's up and down the country will be fixing a particular price for a particular event for example—that could be considered price fixing. Restricting outputs and allocating markets—these are currently regulated. Cartel conduct is a civil offence.Recently there was an award made by the Commerce Commission of $7.5 million against a body corporate that was found to have acted in a sort of cartel behaviour and an individual was fined $100000 and not allowed to be in a management position for five years. That is a civil regime that is working I would have thought—$7.5 million that a body corporate has to pay I would have thought was a huge deterrent for any body corporate to act in a cartel-like behaviour. These civil deterrents—the way that the National Government has put in place the civil regime—are actually working. This cartel criminalisation is actually—I've just learnt this terminology—a sledgehammer cracking open a walnut. This will not work."
Luxton Jo; Williams PotoJO LUXTON (Labour): Thanks Madam Assistant Speaker for the opportunity to stand and take a call. I'm actually very pleased to take a call in extreme support of this—Hon Members: Extreme support!JO LUXTON: —of absolute support of this piece of legislation. I find it quite interesting that the member who has just taken his seat—Kieran McAnulty: What's his name?JO LUXTON: I can't recall. I'm so sorry. I'm not sure if it's that much of a big deal but anyway he's just taken his seat. He said that he was pleased that the Minister had quoted previous Government members and that it showed that they opposed the ideal of cartels but they did not make it a criminal offence. Actually I'd just like to go on and just quote a little bit more from Mr Brett Hudson when he said it does address the negatives of cartel behaviour and it is important that it does so because if we did not we could end up with a terrible situation where the tiny minority—the nameless and the faceless—are controlling outcomes delivering things that many do not want." This just goes to reiterate what the Minister said: that this Government supports honest business. We know that cartels cause harm—absolute harm—and it's very hard to detect cartels because they often conduct in secret so it's very hard to detect them. Making it a criminal offence is certainly going to deter this type of behaviour and we actually owe it to our consumers as well as our honest businesses because cartel behaviour is unfair to consumers also.Hon Jacqui Dean: Really?JO LUXTON: Yes yes really Mrs Dean—really really absolutely. So when people engage in cartel behaviour they increase their own profits but it is the consumer that misses out. So we are committed to implementing this reform. There is absolutely no place in New Zealand for cartel behaviour and on that note I absolutely commend this bill to the House.Hon Jacqui Dean: Madam Chair?ASSISTANT SPEAKER (Poto Williams): I call the Hon Jacqui Dean."
McAnulty KieranKIERAN McANULTY (Labour): It's not the first time I find myself agreeing with Lawrence Yule; I hope it's the last. The point is that he's absolutely right as are many other people that have spoken on this bill because this bill has a very clear objective and that is the desire to lift the financial capability of New Zealanders. I don't see the need to go on about it for too long; I agree with what's already been said.The fact is that not everyone is born with a great array of skills. I can only speak for myself; I was born with very little. But one of those skills that not many people hold is financial capability. So like previous speakers Lawrence Yule and my friend here Greg O'Connor have said as people reach a certain age they start to want to ensure that the money that they've saved away for their retirement is in good hands. I think that just makes absolute sense. So you're looking to ensure and give people the confidence that the financial advisers that are assisting them to make decisions about their money are doing so under a regime that instils them with confidence. So on that note I'm very pleased to speak in favour of this bill and I look forward to it passing into law.Bill read a third time.
Financial Services Legislation Amendment Bill — Third Reading
Yule LawrenceLAWRENCE YULE (National—Tukituki): It's a real privilege to be able to take a short call on this third reading of the Financial Services Legislation Amendment Bill. It's easy to forget the genesis of where this came from and the misery that was caused at the time: the high-profile case here in Wellington two high-profile cases I'm aware of in Hawke's Bay and the genesis of people being ripped off by in my view advisers that were more interested in their own personal circumstances in the end than the clients they were servicing.So this bill provides a clear duty for anyone giving advice to ensure a good customer outcome as a priority. I do acknowledge various Ministers along the way. I acknowledge what National did: the detailed process of engagement with the community the draft legislation and the way it was consulted. I also acknowledge the Hon Kris Faafoi and the way he has brought it back to the House.In this new regime financial providers carrying on a business of giving financial advice will be required to be licensed with the Financial Markets Authority to give advice to retail clients. Any person giving financial advice on behalf of a financial provider will need to either be engaged—employed or otherwise—by a financial provider or be registered themselves. Having sat on the Economic Development Science and Innovation Committee these types of details were important because it became obvious that if somebody gave you a piece of financial advice and then moved to another provider—where was the liability if that advice was substandard or not correct? There is also a fundamental requirement in this bill that implements conduct and competence requirements to all those giving advice both the firms and the individuals.I do want to acknowledge in closing that anybody that is giving financial advice particularly as our population gets older has an immensely important role as people plan for their retirement particularly. There is an absolute duty of care on those people and that's being enshrined in this legislation.In closing I would just like to personally acknowledge the Hon Kris Faafoi because I have had providers of services in my own electorate who have seen some holes in their view where the legislation could be amended. Minister Faafoi has met with them and they have been addressed in the Supplementary Order Paper. So I think this is a very good example of how legislation that is very complex can be drafted how it can be worked through a process where select committee all work together and the Minister was open to making changes from both the select committee and members of the public. I commend this bill to the House and I think it's a very exciting day.
Willis NicolaNICOLA WILLIS (National): It gives National great pleasure to support this bill because as the previous speaker has said ensuring adequate protections and rights for New Zealanders seeking financial services is a very important principle. I do want to pick up on that example of David Ross that the member for Ōhāriu Greg O'Connor just raised because I have known individuals who were impacted by the terrible financial advice that he gave. The impact for them was incredibly detrimental because the impact of very bad financial advice is not just financial and material; it's emotional it breaks families it creates depression it can really ruin lives. So this while a dry bill on the surface of it is actually dealing with issues that have substantive relevance for the lives of many New Zealanders.Of course issues like this are technical. So this is a technical and complex bill; it is establishing a new regulatory regime. So I want to take just a moment to commend the process that National followed having introduced this bill in August 2017. That had actually followed a three-year process and it was incredibly comprehensive. There were issues papers there were options papers there was an exposure draft of the legislation and I commend that process because what we know with technical financial issues of this sort is that if there are inappropriate loopholes or technicalities are left unaddressed then there can be ways that people can work around the system. None of us in this House want that; so by allowing all of that exposure allowing all of that submission allowing all of that debate we iron out any wrinkles as we go so that we then come to this House with a piece of legislation that both sides can support.The bill of course does a number of things that have already been canvassed by previous speakers and before I sit down I just want to highlight the modern aspect which is removing the requirement that only a natural person can give financial advice. That of course allows for the provision of online advice in the future or robo-advice. I know not having sat on the select committee but having spoken to colleagues who did that this has been an issue of debate and contention but I think it's important that we think about the regulatory principles first and then allow those to be adapted towards the technology so that people can get affordable advice that is effective and that can be relied on. I commend this bill to the House.
Falloon Andrew; Williams PotoANDREW FALLOON (National—Rangitata): Thank you Madam Assistant Speaker. I rise to take a very brief call this afternoon on the Financial Services Legislation Amendment Bill's third reading. I won't add too much more to what's already been provided by the House this afternoon; there have been some excellent contributions laying out what the changes are in this bill which really provide a clear duty for anyone giving advice to ensure a customer outcome is the priority. I did sit on the select committee that considered this bill and we received 71 submissions and heard about half of those in oral submissions. They recommend a number of changes several of which we took up particularly in relation to the definitions of financial advice.The most significant change I think in this bill was mentioned previously by the Green member Jan Logie which is in relation to removing the requirement that only applies to an actual person and that it does now also cover the provision of robo-advice which of course is something that's growing and will continue to grow. So in a lot of ways this legislation will futureproof future arrangements. I would like to congratulate my colleagues on the committee. We all worked in a very collegial manner as we often do on the Economic Development Science and Innovation Committee. I would also like to acknowledge Minister Kris Faafoi for shepherding it through the House and acknowledge former Minister Jacqui Dean. Thank you.ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Greg O'Connor you have five minutes.
Logie JanJAN LOGIE (Green): Thank you Madam Assistant Speaker. So it's with pleasure I rise to take a call for the Green Party on the third reading of the Financial Services Legislation Amendment Bill. It's nice to mark these moments in the House where we seem to have unanimity. I too would like to acknowledge both Ministers who have been involved in this—the Hon Jacqui Dean and the Hon Kris Faafoi—for getting this bill through the House to this day. The bill as has been stated by others is making amendments to the financial services legislation which has really only been in place for about eight years so it's relatively new legislation but in I think an encouraging way the ministry through monitoring picked up that there were issues with the legislation and some gaps; and this bill is addressing those.At a high level it brings financial adviser regulation into the Financial Markets Conduct Act 2013 and it creates new types of financial advisers allowing also for the provision of robo and digital advice and the intent of that—for some of us who may just associate anything that says robo" with robocalling and the desire to disconnect from landlines altogether—is about setting out that not all financial advice should come in the same medium; that we need it also to be appropriate for the decisions that people are making and not everyone needs a full prospectus; and that actually sometimes robo or digital advice will be the best way to get information across to people. We should be ensuring that our legislation enables that. It also requires providers of financial advice to be licensed at a firm level and puts in place in effect a new code of conduct that will apply to everyone providing that advice and it addresses the historic offshore abuse of the Financial Service Providers Register by requiring providers to have a stronger connection to New Zealand. As Melissa Lee the previous speaker mentioned I think it's encouraging that it's been picked up that there have been some offshore providers who have in effect been misrepresenting themselves as more closely grounded in New Zealand than they have in fact been. When people are making decisions in a New Zealand context I think it's reasonable that they have the ability to discern how close to the market in New Zealand the people they're getting advice from are so this tidies that up. Also I just note that through the select committee they added in subcontractors which the Greens were really pleased to see which I really think strengthens the legislation to stop people using that as a backdoor in terms of avoidance which would have undermined the intent of the legislation which is really to provide an even playing field around our expectations of good-quality financial advice. I also note that the Supplementary Order Paper that came in at the committee stage provided for a staged disclosure regime that also seems to have support from everyone in the House. So it's good to see that we're all on the same page—it would be hard to think why we wouldn't be—in making sure that New Zealanders can have confidence in the financial advice that they're getting."
Lee MelissaMELISSA LEE (National): It's a pleasure to rise in the third reading of the Financial Services Legislation Amendment Bill and I'd like to commend all of the members who've actually stood up and cordially congratulated all of the Ministers who were involved. In particular I'd like to obviously congratulate Minister Kris Faafoi but obviously our former Minister of Commerce the Hon Jacqui Dean did an amazing amount of work. She did jokingly actually suggest that somebody else was taking the glory after she's done all the work so I just want to acknowledge the amount of work that she's actually done.This bill is an omnibus bill that makes amendments as other members have said—changes in the way that businesses change their conduct when they're dealing with their customers. As earlier speakers have actually said for members of the public—you know ma and pa investors or anyone who is making a financial decision—it is a major risk that they actually face and having good advice from professionals who should have the nous to advise their clients without thinking about their own pocket should be the way to go but it hasn't been always the case.This particular bill changes that and puts the client care obligation at the forefront of the work that people in this industry actually do. Other members have said many things but one of the things that this bill does that I am particularly proud of is the issue in relation to offshore providers with tenuous links to New Zealand who were in fact able to register as New Zealand financial service providers in the registry and one of the things that we do in this particular bill is remove them—so for example some odd outfit who is trying to utilise the good name of New Zealand. They don't even exist in New Zealand and yet they were able to register their company to make their clients believe that they were a New Zealand company because they were able to register here as a financial service provider but they don't even have an office in New Zealand. So we are preventing these shysters from being able to register here without providing those services in New Zealand.It would also remove the place of business test. One of the interesting debates that we had in select committee which I found very interesting is that there are some legitimate New Zealand businesses who were in fact providing financial services to offshore clients. We continued to actually look at those businesses and make sure that legitimate business could still register but that the shysters who were using the good name of New Zealand could not actually do so.This bill is a good one and I am very proud to have actually worked on the select committee and I commend the bill to the House.
Dean JacquiHon JACQUI DEAN (National—Waitaki): What an excellent bill this is—an excellent bill and—Hon Kris Faafoi: If only you'd introduced it. Hon JACQUI DEAN: Yes it is a shame but I want to congratulate Minister Kris Faafoi for really picking up this piece of work and bringing it to fruition. It happens all the time you know—one Minister initiates the work maybe another one takes it the way through and then some lucky guy gets to bring it to the House and bask in the glory. I'm not hurt—ha ha! It is good. Look it's a good piece of work and when we do talk to members of the financial advice industries—I did just last evening—there is a good understanding of the regime and there is a good understanding and acceptance and enthusiasm for the new compliance requirements new standards of financial advice and also for putting the needs of the client right at the very forefront of financial advice provision in New Zealand. The parts of this bill have been well gone over. The part I'm particularly interested in is an emerging part of financial advice which is robo-advice and to me that is an exciting enabler in this piece of legislation. Having said that actually the Financial Markets Authority (FMA) did authorise—or was it the Commerce Commission? No it was the FMA—the provision of robo-advice ahead of this legislation. I can't remember. Maybe the Minister can remind me—FMA? I think it was yeah. So already there is an emerging market of robo-advice. Well what does it mean for me when I want to make an adjustment to my KiwiSaver for example? I can do that perhaps online. I might not need to use a person to do it. It might be quicker and easier and more convenient for me and it may be anonymous if I want that to be able to get some advice which I need at the level which I want quickly easily sitting in front of my keyboard. It also opens the door for innovation and I will be very interested in the future to see just what form that takes. I know there was a lot of interest in the insurance industry financial advice industry obviously and banking about what the potential is for providing that robo-advice because any advice is good advice. So I do commend the bill. I commend the Minister for his good sense in picking it up and running with it and I commend the bill to the House.
Luxton JoJO LUXTON (Labour): Thanks Madam Assistant Speaker for the opportunity to speak on this the Financial Services Legislation Amendment Bill. Whilst I came into the Economic Development Science and Innovation Committee part-way through the consideration of this bill I've appreciated seeing firsthand how well Minister Faafoi has done with introducing and bringing this piece of legislation—Hon Jacqui Dean: Just say Thank you."JO LUXTON: —to the select committee. Yes thank you Minister Faafoi. I'm really pleased because it shows that he is forward-thinking and he is looking after New Zealanders and he has a desire to make sure the regulation of financial markets is fit for purpose.What this piece of legislation does is it reforms the regulations of financial advice. It repeals the Financial Advisers Act 2008. It's really important that people today have access to extremely high-quality financial advice. Whether it be someone looking to take out their first-home mortgage or just a mortgage in general this is a really big decision that one makes in life. There is a lot of money involved and potentially some risk also so it's really important that you have good-quality sound advice when making these decisions.One of the things that this piece of legislation does that I think is really good is it takes away the incentive for the advisers to sell or promote—I guess "sell" might not be the right word—a particular product because they may get commission from that and have their own interests at heart. But what this piece of legislation does is ensures that financial advisers have to put the clients' interests first and that is really important because we do need to prioritise their interests and that they only can give advice where they are confident to do so.This is also really important I think for people who are looking to start a business because it's a big risk when you start a business and there's a lot of money involved. It's really important that you do get extremely sound high-quality financial advice. So without further ado I wish to commend this bill to the House."
Hudson BrettFINANCIAL SERVICES LEGISLATION AMENDMENT BILLThird ReadingDebate resumed from 2 April.BRETT HUDSON (National): Thank you Madam Assistant Speaker. I won't take long. I would like to just take this opportunity to thank Minister Faafoi for finishing his contribution approximately one minute before the House rose that day. I was just talking at the time when it was interrupted about the information asymmetry that exists in financial services from the perspective of the consumer. You could call them the investor but I think consumer" probably fits better in most circumstances. Those selling the services tend to know a great deal more about those services—the intricacies of them the pitfalls the advantages—than the purchasers the consumers. So for the bill to place the obligation a very clear obligation on those providers to put the interests of their customers first I think speaks to the very heart not only of the intention of the bill but in fact of what the bill does.Just before I close I would note that the rather large Supplementary Order Paper 195 that the Minister did introduce in the committee of the whole House which allows for staged disclosure over the course of a piece of advice and a transaction is actually a really good idea I believe. The idea is the investors the consumers should know all that is relevant about the person providing the advice but rather than give them a great tome right up front disclosing relevant advice at relevant points should actually make it better and easier for the consumer which fits to the point about putting the consumers at the heart of the services and certainly of the legislation. We commend this bill to the House."
Henare PeeniHon PEENI HENARE (Minister for the Community and Voluntary Sector): Tēnā koe Madam Assistant Speaker. Look I don't wish to labour the point but I want to thank many of the members across the House for their contributions. If I can add something it's an admiration of how brave the Minister Tracey Martin is. As she mentioned in her speech in this the second reading of this bill she will be introducing a Supplementary Order Paper which no doubt will cause some robust debate in this House.Everyone in this House knows that when you undertake—when one undertakes; sorry Madam Assistant Speaker—a first-principles review you're looking at something very significant here. You want to be able to give it the time where I'm sure members of the public and other people relative to the Fire and Emergency New Zealand sector will be able to make a contribution to bring their voice to the debate. She's already set out the deadline or the time line in front of us for that piece of work and I admire how brave the Minister is to take on such a challenge.A first-principles review of legislation is something one doesn't take on lightly and I hope that isn't missed on members right across this House. So I want to acknowledge her and of course share the acknowledgments of the House in praising the fire and emergency services across this country. I look forward to seeing this bill continue on into the House. As one member has already previously mentioned it's taken some time to come this far already. I remember in the last term of Parliament we debated a significant change in Fire and Emergency New Zealand and it's important that we continue to do the good work. I look forward to being part of a good Parliament that will make sure that this bill goes through the test that it deserves.Bill read a second time.
Fire and Emergency Levy Amendment Bill — Second Reading
Dean JacquiHon JACQUI DEAN (National—Waitaki): Touching—touching—from Kieran McAnulty. A touching faith—touching faith—in the Government. This side of the House not so much—not so much. I think the fears that were expressed by Lawrence Yule over a funding mechanism yet to be determined and his fears on the impact on local community are well founded. I also share and endorse the comments of Lawrence Yule who should know a thing or two about local government and the impact of Government policies in terms of added costs to ratepayers. We—I can guarantee this to the House—will be keeping a very close eye on what Minister Martin brings through in terms of a funding model towards 2024. We will have a very very close interest unlike the touching—touching touching—trust of the list MP based in Wairarapa. Thank you.
Yule LawrenceLAWRENCE YULE (National—Tukituki): It's my pleasure to take a short call on this bill at this stage and in doing so I also reiterate what other members have said. I have the utmost respect for our men and women in New Zealand young and old that are firefighters whether they're volunteers or in the professional brigade. Many of you may not know about the transition to get to where we got to in 2017. It did involve some significant amalgamations of local authority forces who principally supplied rural fire services with a professional service. I was quite heavily involved in my former role in getting to that point and it is not surprising to me that we are asking for some more time for the insurance industry to adapt because what has fundamentally happened is we have changed the way fire and emergency services are funded and we have at the same stage put a new onus on the insurance industry to look at what is funded and what is not. But in this very short call I wish to make I do want to acknowledge one point and the Hon Ron Mark will probably be aware of it. When you look at how you fund fire and emergency services there are really only three ways. The first is through an insurance-based product the second is to a direct levy somehow on to the household or the third is through local authority rates. And all those options have been looked at. They were all looked at in 2017 and before. While we're happy to support what's being proposed at this stage I think there's going to be a very serious conversation around the committee of the whole House to look at why those options were looked at in 2017 and we've arrived at this option. It is a surprise to me to hear from the Minister the Hon Tracey Martin that she's seeking to extend things out to 2024. All these issues were looked at before. None of them are perfect. But despite the lack of perfection the insurance-based model was chosen as being the best and I'd very much doubt that in the next stage of the committee of the whole House we're going to see another model. I think we need to be careful as a previous colleague of mine has just said. We need to be careful what we ask for because I know that if you ask local authorities in New Zealand as to whether they want to be responsible for the funding or new rating of fire and emergency services on top of their rates when they are not accountable for the service themselves you're going to get into a very interesting conversation. Thank you Mr Assistant Speaker.
Yang Jian; Rurawhe AdrianDr JIAN YANG (National): Fire and Emergency New Zealand or FENZ was established on 1 July 2017. The purpose of that was to better meet the needs of New Zealanders. So basically we have evolving or changing needs for emergency services. Now the new unified entity is based on forty organisations with 14000 people—so a very large workforce. And we can see the benefits now as we have seen in FENZ's response to the Nelson-Tasman fire.Now under the Fire and Emergency New Zealand Act a new levy system is supposed to take place on 1 July 2019—this year. It has become clear that this date will not work and therefore we need to somehow postpone or delay the commencement of that particular new regime. So that's the purpose of this particular bill. So this bill—all the amendments—are related to the new levy-based regime the system. Now we understand the Government is planning to introduce a Supplementary Order Paper (SOP) at the committee stage extending the date of commencement of the new levy-based system until 1 July 2024 so we'll see what's going to happen there. But at this stage we support this postponement or delay because we believe that is more practical. Of course the Governance and Administration Committee received about 10 submissions; six of the submissions made comments about this particular amendment relating to the postponement of the commencement date. All of them supported this particular amendment. The committee of course unanimously supported this amendment. Now the question is: what will happen after this? So at this stage we will support this bill and at committee stage we'll see what's going to happen for that SOP. Thanks.ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. Five minutes—Greg O'Connor.