Dean JacquiHon JACQUI DEAN (National—Waitaki): Thank you Mr Assistant Speaker. I want to congratulate Stuart Smith and I know a number of members in the House have done the same thing. But Mr Smith well done because you have brought—well you've called it dry yourself in the media and it could be described as a bit of a dry and complex issue but it's an important issue not just for credit unions and friendly societies but also for their members and the people that they serve.As I was reviewing my notes for this contribution I thought I would just perhaps reflect on the benefit that to my knowledge credit unions have brought into my part of New Zealand which is the lower South Island. So I'll just tell a story about how credit unions can be so very useful to the communities that they serve and more so now that there are changes to the legislation which will be able to improve the service that they provide for their communities.So a number of years ago well over a decade ago there was an incident in the small southern rural town of Palmerston which is roughly halfway between Dunedin and Ōāmaru. It's a small rural service town. It's on the coast. It's the gateway to Central Otago. But it lost its last bank and it lost its last money machine. So that left the people who work at Macrae's gold mine it left farming families and it left people who live within the Palmerston township without any banking services at all unless they were able to go into McGregor's tearooms and get some change or cash a cheque or something—I'm going back a wee bit now. So it caused a lot of consternation within the community and we do see this happening through smaller communities in New Zealand as banking services rationalise modernise and withdraw from rural New Zealand and provincial New Zealand. But going back 10 years or more technology has actually moved along away from then.I was the deputy mayor of the Waitaki District Council at the time and we cast around for a solution—how do we serve our community of Palmerston who are losing their banking services? So we approached the trading banks; they were not interested because it wasn't a good financial proposition for them to run a cash machine in a small rural community. In the end we ended up having a cash machine installed by the Otago credit union and that cash machine is still there today. It served to prove that credit unions and friendly societies are there to serve their members and their members' families associates and affiliates. If you wanted a concrete example—and I'm sure there are many and I know that the member in charge of this bill Stuart Smith is very familiar with all the circumstances around this—of how a credit union could serve a community then I would say that serving the community of Palmerston was one. I've used the machine as do the locals. It's in the library. It's a community facility and it is well used and well appreciated.The principal Act was introduced around the same time as cash machines were first installed and so the story I've just told really is a piece of history now. Banking services have changed exponentially quickly since cash machines were first installed. So the Friendly Societies and Credit Unions Act desperately needs updating for a number of reasons but I want to focus in my contribution on why it is so critically necessary for credit unions and friendly societies to have a modern structure in which they can operate to the benefit of their members and communities but also compete with modern banking services.If I were to pick out one exciting development in banking services it would be things like obviously contactless credit cards which are revolutionising the way people transact and shop. There are many many innovations in banking that credit unions and friendly societies can avail themselves of; they just need the legislative framework to do it in which is why I'm so pleased that Stuart Smith has brought this bill to the House.I also want to acknowledge the Finance and Expenditure Committee for working so well on this piece of legislation. Now Stuart Smith—he probably regrets saying it because it will be repeated endlessly—did say it's a dry piece of work; hmm maybe. But actually it's got a significant reach into every community around New Zealand.Under the current Act credit unions have a very complex supervisory and oversight regime. This inhibits innovation and the last things we want to do in the banking sector in New Zealand are to create an unlevel playing field but also to inhibit innovation. I think credit to Stuart Smith is that this bill addresses that on behalf of the credit unions.I also want to acknowledge the credit unions themselves. I know this has been a difficult pathway for them to come to this House and they must be sitting at home feeling pretty hopeful that this House will support through its final stages this bill on their behalf so that finally they can put to rest their history and they can address the future and be that supportive community-based banking facility that their members desire and which is beneficial for communities around New Zealand.If I just pull out one example of the benefits—so currently at the moment credit unions aren't able to provide financing to small and medium sized enterprises (SMEs) that are related to members of that credit union. It's quite convoluted because at the moment currently the loan must be made to the member who on-lends it to the small to medium enterprise with the credit union having to take collateral security from the SME as well. Well that's clunky it's old-fashioned and it's an inhibition to development and the last thing we need in New Zealand is measures in the banking system which inhibit development and growth—particularly in rural and provincial New Zealand. So that is a measure which has been addressed in this bill.A further issue is the number of credit unions necessary to form an association. There is a need to gain economies of scale which has seen the number of credit unions decline to 20 while under the current Act a minimum of seven is needed to form an association. So what the bill does is reduce compliance costs reduce unnecessary operating costs promote greater efficiency promote innovation—we know innovation is happening so very quickly in the banking sector—but also very importantly promote accountability accountability to the agencies who have oversight over credit unions but also accountability to their members. It is also very important—and this bill achieves this—to bring credit unions into alignment with other financial service providers in New Zealand.There's also the stated aim and this is something that Stuart Smith has been so strong on throughout the process: to maintain the element of mutuality and the requirement of having a common bond between members. That is why credit unions were started in the first place and I do applaud all those involved in the long long passage to bring this to the House. So at this reading of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill in its second reading I do commend the bill to the House. But just one last comment perhaps: it is a great privilege in this House for a member to bring a bill to the House which has a great deal of meaning throughout New Zealand. I have to say that Stuart Smith has achieved this. I congratulate him and commend the bill to the House.