Dalziel Lianne: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
Dalziel Lianne: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
[Volume:658;Page:7099] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am really disappointed with the comments of the Minister Simon Power. He does this continually. I now have to acknowledge all my colleagues who said that I was wrong about that Minister and to say that I was in fact wrong and they were right. There is an increasing level of arrogance about that Minister that has completely surprised me. Not once did he mention the work done by my predecessor in this portfolio the Hon Clayton Cosgrove on the cost-benefit analysis that was critical to fixing the disastrous bill that that useless Minister introduced. The second thing he failed to acknowledge was the work by my colleague the Hon Pete Hodgson who I believe was able to work very collaboratively with members of the Government on the Foreign Affairs Defence and Trade Committee in order to make the changes that needed to be made to this Anti-Money Laundering and Countering Financing of Terrorism Bill. 
This bill is nothing like the bill that was introduced into this House some months ago. The reason it has had to change so substantially is that to put the kindest expression that one could put on it a very busy Minister took his eye off the ball and let a bill be introduced into this Parliament in a shape that was completely and utterly unacceptable unworkable and totally out of line with the cost compliance that one would expect to see given there was a process across the Tasman in Australia that we should have been able to work with right from the outset. This bill was introduced in really bad shape. I guess that is the point I want to make and I want to know why. That Minister has not once addressed in all of his contributions on this bill why he took his eye off the ball in that regard. The fact that he has not even acknowledged that he did take his eye off the ball just shows how arrogant he has become. I am truly disappointed because I thought he was one of their better ones and I hate to be proven wrong. 
I think the problem actually arose when the Government shifted away from that focus on harmonisation with Australia. Again that surprises me because the Minister of Justice who is responsible for this bill is also the Minister of Commerce with responsibility for the single economic market agenda. So it seems utterly surprising to me that he did not pick up that it was fundamentally flawed legislation until it was able to be rectified by the select committee. 
The Foreign Affairs Defence and Trade Committee did I think a very good thing. It was not the committee that would normally be dealing with technical matters such as these; they would normally be within the purview of the Finance and Expenditure Committee or the Commerce Committee. But I congratulate the chair of the committee John Hayes and the members of the committee who I think worked very collaboratively on the bill on bringing in outside assistance to enable them to address the complexities of the issues. 
I think that if we want to really understand the difference between the bill as introduced and the bill that came out of the select committee we have to look at two quite different approaches. One is a risk-based approach and that is the one that has been implemented in Australia. The other is a very prescriptive set of rules—one ticks the boxes and one has to do things in a particular way in order to proceed. I think the Australian risk-based approach is the right way to go. It is usually the right way to go in the commercial area because of course pacing the prescriptive requirements can actually mean that businesses are not alert to the real issues they should be alert to when trying to manage the risk of things going seriously wrong. 
What are we trying to manage here? I think it is important to remember that this bill is the Anti-Money Laundering and Countering Financing of Terrorism Bill so it is about identifying the risk of large sums of money being laundered through our banking system which of course has to have integrity in order to be effective and it is also about countering the financing of terrorism another important issue that our country has to be part of in terms of our international obligations under the Financial Action Task Force. I think that it made absolutely no sense to me whatsoever that this National Government of all Governments which says it is the friend of business introduced a bill with a whole set of prescriptive rules. In fact banks could not even enter a casual business relationship with somebody from overseas who might be in the process of migrating to New Zealand and wanting to set up a bank account without first having done some background checks. That would of course have been ridiculous and would have meant that a lot of people who wanted to migrate to New Zealand would have found it very difficult to comply with the requirements of the legislation as it was first set out. 
When Labour members were in Government we were very concerned to see that this legislation had a very detailed cost-benefit analysis with it. That is why my predecessor in this portfolio the Hon Clayton Cosgrove made sure a detailed analysis was undertaken so that the costings would be known. We knew that this bill would impose costs on business; we wanted to make sure that it was the most cost-effective way of delivering the kinds of outcomes that we were seeking in the anti - money-laundering space. But the problem was that when the Government changed the nature of the bill itself provisions against which the original analysis was measured bore no resemblance to the bill as introduced. That of course made a total mockery of the regulatory impact statement in the original bill. I do not think that the Government members picked up on that anywhere along the line. If a detailed cost-benefit analysis is undertaken by an independent financial agency—as was done by the previous Government—and a Government then introduces a bill based on an entirely different set of requirements from those measured in the independent analysis then the cost of compliance is completely understated. That was the issue that we had with the bill as introduced. 
I have some notes from one of the banks that I certainly spoke to about that particular issue. The bank identified that the cost of the anti - money-laundering project in Australia just for that one bank alone was $35 million to complete. If the bank had been able to project that cost into the New Zealand environment simply leveraging off the work that had been done in Australia then just for that one bank in New Zealand the cost would probably have been another $5 million to $7 million. With the bill as introduced that cost suddenly skyrocketed to $10 million and even up to $22 million. That is the size of the difference in costs that would have been imposed if the bill had been allowed to proceed in the way that it was introduced by the Government. 
I would have thought that the Minister of Justice would think it was necessary to explain to the House how we got into the situation where such a significant change to legislation was able to go through Cabinet. I bet that Cabinet was not actually told the extent of additional costs that would have been imposed on the banking sector by the shift from the risk-based approach to the prescriptive rules that were introduced. 
I place on record the Opposition’s gratitude to the advisers who supported the select committee in the work it did. It is not usual to have external advisers particularly those who might seem to be interested parties to be providing that degree of support and assistance but the Government had got the bill so fundamentally wrong that it was important for a different process to be adopted at the select committee. As a result we now have a good bill that Labour can support and that can meet New Zealand’s international commitments on the Financial Action Task Force framework. So I am very pleased to support the final reading of the Anti-Money Laundering and Countering Financing of Terrorism Bill.