Willis NicolaNICOLA WILLIS (Deputy Leader—National): Thank you Mr Speaker. As my colleague Andrew Bayly outlined National is continuing to support this bill. We want to see a stable and efficient financial system for New Zealand and we think it's important for the stability of our financial system that depositors have confidence that they will be able to obtain and use their deposits despite events that may occur in the financial system.We're conscious that the debate on this bill is occurring in the shadow of the collapse of banks overseas and that those collapses have potentially been exacerbated by the reality that in modern times with digital banking once there's a run on a bank it happens extremely quickly and that development is the reality in which this bill is being debated. However we are also conscious that this is an area where in a desire to protect our fellow citizens against risk and to ensure that they can be confident in being able to obtain their deposits we could potentially overregulate to the detriment of deposit makers such that the cost of banking is increased not only by the cost of the regulatory impost and the levies needed to secure the scheme but also potentially by suppressing the competition that we wish to see in a healthy financial sector by advantaging those who are able to operate within a detailed or a complex regulatory environment and making it much harder for smaller deposit takers to compete in that environment.So taking that balance of the need to protect deposit makers but also to ensure thriving healthy competition and low cost for bank users this is an area where detail really matters and so I want to join other speakers in commending the members of the Finance and Expenditure Committee who have worked I think very hard to strike the right balance between those competing challenges to make sure that the cost imposition and the adverse impacts or unintended consequences of regulation in this area have been thought through and to the extent possible minimised.I think that—and I certainly hope that—in the back of the minds of those sitting on the committee are other recent well-intentioned exercises that have related to banking regulation. The case that I think of and that New Zealanders raise with me weekly is the changes made to the Credit Contract and Consumer Finance Act the CCCFA which as legislative instruments were very well intended which was to go after loan sharks and those who are predating upon New Zealanders in their lending. While the legislative instruments may have had a good intention in practice the detail of the regulation in that area was so prescriptive that it has not only cut off credit to many low-income and low-wealth New Zealanders who are now in many cases seeking alternative credit through less appropriate unregulated forums—including I'm reliably informed the gangs—but has also added huge amounts of cost and potentially lessened the ability of banks to compete appropriately in this area.Hon Dr David Clark: Point of order.NICOLA WILLIS: Returning to the bill at hand as David Clark makes his point of order—DEPUTY SPEAKER: Point of order David Clark.Hon Dr David Clark: Thank you Mr Chair. I'm just seeking your guidance: the member's talked for quite some time on a completely different—DEPUTY SPEAKER: Yeah Mr Clark that's what the Speaker's job is. Sit down.NICOLA WILLIS: Thank you Mr Speaker.DEPUTY SPEAKER: I will say I was just about to say: time we did come back to the bill—without the assistance of that member.NICOLA WILLIS: Yeah thank you Mr Speaker. Look to make my point about why this is important for this bill this is a bill which the select committee grappled with because part of what we had to do was think about how the Reserve Bank how officials would create regulations within the scope we put in legislation. What we had to think through in detail is how we would ensure that Parliament's intent was properly reflected in that regulation. The reason I make my point about the CCCFA—and I understand the Minister previously responsible for it is sensitive about it—is that there can be a gap between intention and practice.So coming to the detail that we did discuss at select committee and that is important here the first point that I think the select committee was focused on appropriately is the desirability of a diversity of institutions in the deposit-taking sector which is to say we didn't want to have a regulatory framework which unintentionally made it very difficult for those who weren't large banks to operate within that sector and which created barriers both to their entry and to their operation in practice. The select committee also shared a view that it was going to be better for New Zealand consumers and New Zealand users of bank services if there were different options for accessing finance.It's from there that the proportionality framework that the previous member also referred to came from. An example of that that we discussed is the current requirement that there be a credit rating for an institution which can be waived under the current settings. There are currently exemptions for it but in this bill those were not necessarily going to be carried over and what we considered as a committee was the gap between us relying on the fact that the Reserve Bank would put those into practice and whether or not that needed to be explicitly in the legislation. The point here is that we are with this bill handing over considerable regulatory judgment to officials and I think what you've seen through previous speakers and what I would also put on the record is the very clear intent of the parliamentarians on the select committee that we want to see that that regulatory framework doesn't have an overbearing impact such that it precludes competition or such that it precludes some deposit makers having access to a diversity of financial options.I think that what we have in front of us now having come through the select committee process is a bill that is much friendlier to smaller non-bank financial institutions than it would otherwise have been because of the good efforts of people on the select committee. But despite and because of those intentions I do want to once again put on the record the concern certainly from members on this side of the House that it will be particularly important that regulations made in this area live up to those intents and that the effect of the regulation is monitored carefully to ensure that it isn't having perverse effects.You know I say this against the backdrop of an issue that I think is relevant to this debate which is the concern many New Zealanders have had about whether or not there is adequate competition in our banking sector. It is obvious to me that we do have a banking sector in New Zealand that has had a huge amount of regulatory change all of which has been well intentioned but about which there is a question that needs to be asked: what is the price that New Zealand bank users are ultimately paying for that regulation? So therefore we as parliamentarians do need to strike the right balance on these matters.I'd note that as we discussed the bill at select committee and even as this bill continues to pass through the House there is the ongoing discussion about the adequacy of competition settings in the banking sector that's gone on and while there's been a lot of heat on the other side of the House they are yet to initiate any form of inquiry into that. We on this side of the House continue to think that this is a matter that it would have been prudent for a select committee to look at in some detail the observations from which could've potentially fed into making this also a better bill with better guidance for those creating the detailed regulations.So in sum National continues to support this bill as a step to promote the stability of the financial system and to protect New Zealand bank users. We have been concerned to ensure that the regulatory framework is not overburdening and that it continues to support healthy competition in the sector. We think the regulation in this area will be critically important and we will continue to be watching this very closely.