Key John: Reserve Bank of New Zealand Amendment Bill — First Reading 
Key John: Reserve Bank of New Zealand Amendment Bill — First Reading 
[Volume:632;Page:4222] 
JOHN KEY (National—Helensville) 
: 
 On behalf of the National Party I say that it will be supporting this omnibus legislation amending the Reserve Bank of New Zealand Act and the Racing Act. I start by saying that this legislation will be going—as Dr Cullen indicated to the House—to the Finance and Expenditure Committee. I say on behalf of my fellow colleagues on that committee that it is a very hard-working committee indeed. 
Although I cannot comment absolutely about the number of submissions we have received on the other little trick that Dr Cullen’s is trying to pull at the moment—the introduction of a capital gains tax on foreign-held shares—I can say that the number of the submissions we have before that committee is stunning. I think that if the committee were to listen fully and diligently to all of those submissions then there is no way we could possibly make the time frame of 6 October that Dr Cullen indicated. On top of that we also have the KiwiSaver legislation which members of the public will know is very very technical and again full of a lot of issues. Ironically enough also sent to the Finance and Expenditure Committee has been the Telecommunications Amendment Bill and the changes to the local loop unbundling that the Government is proposing. 
All I can say is that I know that Dr Cullen has great faith in the new chairman of the Finance and Expenditure Committee Shane Jones. I know there is a lot riding on Mr Jones’ shoulders possibly as the replacement to Dr Cullen when Dr Cullen ekes out his retirement in the next few years. It will certainly be a challenge for Mr Jones to chaperone all of these pieces of legislation through the select committee. 
I also say that we support the legislation because it does what we believe is necessary which is forging closer integration between the banking systems of New Zealand and Australia. Around 85 percent of banks in New Zealand are owned by Australian parents and it makes a great deal of sense for the central banks on both sides of the Tasman to be working closely together so that they understand the intricacies and so that the integrity and the heart and soul of our banking system comes to it with the best information available. 
I say to the House that I suspect that this legislation is actually not what Dr Cullen wanted. He stood and put a brave face on it as he read out the speech that his Treasury officials had written for him but indeed Dr Cullen actually wanted a single banking regulator. In fact in his meetings with Peter Costello in Australia I suspect he told Peter Costello that he would make it happen that it was a done deal and that a single banking regulator—that banking regulator being the Australian Prudential Regulation Authority—would in fact regulate the New Zealand banking community. That single banking regulator the Australian Prudential Regulation Authority would have regulatory powers over here probably through something like the establishment of the “Australian Prudential Regulation Authority (New Zealand)”. In fact the supervision capabilities that are undertaken by the Reserve Bank of New Zealand would be taken away from the Reserve Bank of New Zealand just as they have been taken away from the Reserve Bank of Australia and from the Bank of England. 
I suspect that over a cosy chardonnay in the lodge in Australia with the future Prime Minister of Australia Peter Costello Dr Cullen nutted out an interesting deal. Sadly for Dr Cullen though when he came back to New Zealand he was unable to agree with his good friends at FinSec yet another union that acts as a lapdog for the Labour Party or with the Governor of the Reserve Bank who he is also having some difficulty with at the moment—and I want to move on to that in a minute. Interestingly enough they were unable to agree on that so he backtracked. Well that did not make the future Prime Minister of Australia Peter Costello a happy little chappy at all. He was very disappointed that he had poured a glass of Grange Hermitage down the throat of the outgoing Minister of Finance for New Zealand. He said to himself what a waste of Grange Hermitage it was as he glugged back the last of the good summer Penfold’s wine. He said to himself: “I don’t think so. Michael Cullen is not going to come over here and tell me that it’s a done deal. I was going to give him streaming of imputation credits. That is out the window.” 
Then in a rather fiery display we had Michael Cullen saying: “I’m too busy to go to the single economic leadership market debate here in Auckland New Zealand. I can’t fly from Napier to Auckland to go to that because it’s a wailing wall of self-interest and you people from the private sector who have even bothered to show up are a waste of space.” It was so bad that Helen Clark the Prime Minister of New Zealand had to cancel her functions and come and apologise to and grovel for the forgiveness of Alexander Downer and the other fine Australian politicians who were over here because Michael Cullen was too busy having his hair and nails done in Napier at his normal Friday night manicure to go up there and spend a bit of time with the Australians and break bread with them. So I do not think this bill is actually what Michael Cullen wanted but I think it is just another example of what Michael Cullen has failed to do. 
All we can infer from what we have seen in the House this afternoon is that there are definitely moves afoot in terms of the finance ministry in New Zealand. I have high hopes for Shane Jones. He is a new member; I worked closely with him on the select committee. I have high hopes for Shane Jones but I have to say to him that he should watch the tea leaves and read the messages. Trevor Mallard is not a man who is known for shopping at the finest establishments around town. I do not see him at Zegna; I do not see him at Working Style. I do not think he has bought a tie that has cost more than about $25 in his life. But today Trevor Mallard came down to the House in his loving and caring fashion that he so often treats this Parliament to dressed up like he had had Karen Walker giving him a bit of advice. 
The word on the street is that Helen Clark had said: “Michael is off Phil is waiting waiting waiting in his caravan and this is your opportunity Trevor so if you want to step up here get yourself a decent suit and for once in your life look like a Minister of Finance then you might even have a chance.” So I say to Shane Jones that he not a bad looking sort of bloke if we could just dress him up a wee bit. He will have to get down to Zegna and get himself a decent suit and shirt and tie and polish his shoes because if he does not do that then he has no show of seeing off Trevor Mallard when he becomes the next Minister of Finance. The second thing I want to say in relation to the Reserve Bank Act is the interesting situation concerning the range of inflation. I looked at the policy targets agreement and it states that inflation should be between1 to 3 percent. It used to be a range of 0 to 3 percent but when Michael Cullen became Minister of Finance he decided—in his typically endearing and loving fashion—that target was wrong and he increased it to 1 to 3 percent. That was very interesting because it came about at the time of Dr Bollard’s appointment as Governor of the Reserve Bank. Michael Cullen said to Alan Bollard over a coffee in his office that there can be a bit more inflation in the system; Don Brash has been a bit hard about raising interest rates a bit hawkish on those matters. Dr Cullen said he would like Dr Bollard to allow the reins to be a little freer to allow more growth and that we could achieve it with less inflation. 
Lo and behold mortgage-holders of New Zealand will be shocked to know that not only will their mortgage not be going down any time soon it will be going up. If they want to know why it is going up they should look no further than the present Minister of Finance as he carries out his swansong activities. He is the man who told Alan Bollard that there was room to allow for more inflation in the system. He is the man who primed the pumps and went out there and drove up capital spending and Government spending. He is the man who has been hiring bureaucrats like there is no tomorrow and the man who interestingly in the House just a few weeks ago told New Zealanders in the private sector not to ask for a pay rise and to accept that 4 percent inflation means they will be going backwards if they accept a pay round of about 2 percent. Yet a couple of weeks ago we heard that the Department of Corrections had settled for 14 percent as a wage round. I am not arguing about whether corrections officers deserve more but I do know that Michael Cullen says one thing to the private sector and another thing to Government departments. He is the man who has had his foot firmly on the pedal of Government spending. 
I shall move for one moment from the important parts of the trans-Tasman banking regulations to changes that the legislation makes to the Racing Act. As I go around the racing industry I am constantly congratulated. It is not often that I feel like a bit of a rock star when I go places but when I go to the races like Ellerslie I see people like Sue Moroney's brother. He came up to me and said: “John I want to put politics aside and shake the hand of the man who made it happen for the racing industry of New Zealand. In forcing New Zealand First to force the Government to adopt that policy racing can offer something much better for New Zealanders.” 
David Bennett 
: That’s right. 
JOHN KEY 
: Lindsay Tisch and David Bennett are to be congratulated on their efforts. David Bennett comes from a wonderful part of the country where there are many stables as does Lindsay Tisch. They have spent years working for that change. It has made a huge difference to the racing industry. The racing people of New Zealand are very very grateful. The Racing Board will have authority over whether it rounds down or rounds up dividends. For the sake of punters who have supported that industry so strongly I say to the board to round up be generous. Although we know that Michael Cullen is not generous the Racing Board can be.