edithatogo/nz-hansard-corpus huggingface dataset:
Shaw JamesHon JAMES SHAW (Minister for Climate Change): It's a pleasure to rise on behalf of the Green Party to support the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. The submissions were largely in favour of the bill. We know that passive smoking particularly in closed environments leads to higher mortality rates particularly from cancer—in other words passive smoking in motor vehicles carrying children. This bill will save lives. Given all of that we commend this bill to the House. We're looking forward to its rapid passage through the committee of the whole House stage and on to its hasty conclusion—it's that simple. Thank you Madam Speaker.
Marcroft JennyJENNY MARCROFT (NZ First): Tēnā koe Madam Speaker. It's a pleasure to rise and take my call on behalf of New Zealand First on the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. It was a pleasure to sit on the Health Committee as we took a good look at this piece of legislation through that process. I'd just like to really point out that this bill is very narrow in its focus because it is all about protecting children and that is the sum total about this bill. It is sensible and practical and very pragmatic to take care of our tamariki. The first and foremost thing we must do is to change the social norm around smoking in vehicles particularly when there are children and those under 18 years of age in that vehicle. So we are very pleased to be able to support this bill. One hundred and forty-seven written submissions were presented to the committee 19 oral submissions were heard and of those most were overwhelmingly supportive of this bill. A couple of things that struck me through that process in select committee were that when we put our focus on children children absolutely add value to our thinking. They enhance our policy development. So it was an absolute pleasure to hear from all of the rangatahi all of those that came to speak to us in the committee. We learnt about how they want to ensure that any young people don't sit in cars and suck in that second-hand smoke. We also heard that winding down the window is not a clear air solution. So literally stubbing out those cigarettes and not lighting up in the first place in a car is ideal if there are children in it. We also heard about their concerns about vaping. I haven't really come across a lot of vaping and it was interesting to hear from them how so many young people are vaping and it's all about the biggest cloud you can create. So they had concerns and actually wanted to have vaping included in this legislation. All in all really it is a very narrow bill which is all about taking care of the health and wellbeing of our children because when they're in a car and an adult or a person is smoking they do not have a choice. This now gives them that choice. I commend the bill to the House.
Wall LouisaLOUISA WALL (Labour—Manurewa): Tēnā koe e Te Māngai o Te Whare. Tēnā koutou katoa. It was my absolute pleasure as the chair of the Health Committee to be involved in the deliberations on the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. The reason I enjoyed that process so much is because a group in Northland led by the Cancer Society young people and Māori who are passionate about auahi kore petitioned this Parliament. They petitioned this Parliament because they saw through their own evidence that a lot of the adults in the Northland community were smoking in cars with children. And that's where this bill came from. I implore colleagues to read the select committee report. In highlighting the 147 written submissions and the 19 oral submissions I want to read a list of groups that incorporated the voices of our children. So in addition to Cancer Society Northland it was Wellington community justice Holistic Action Sustainable Through All Generations Hāpai te Hauora Māori public health Empower Tangata Trust the Office of the Children's Commissioner Meremere holiday programme Invercargill City Youth Council and the students of Wainuiomata Intermediate School. So this bill—if you ever were to look at one which puts children at the centre of a piece of legislation that actually listens to the voices of children it is this particular piece of legislation. Underlying what they told us was—I used that in the select committee—#wecantbreathe and #pleaseprotectus and it was also #pleasehelpourparents: please help those adults in our world that smoke that are finding it difficult that need resources they need a bit of tautoko. Which is why to be quite frank the 18 months allows the community through public health promotion initiatives to change behaviour before we actually need the enforcement by the police. So there are no changes to this piece of legislation; that is a truism. There were a whole lot of other things discussed including the differential between what is public space and what is a private space and us being very clear in the smoke-free environments bill that we would never infringe on people's private spaces. We can get into the debates about you know the scenario that colleague Michael Woodhouse brought up and the National Party can sell its own Supplementary Order Paper but the reality is we need to pass this bill. We need this done urgently and so I commend this bill to the House. Kia ora.
Mitchell MarkHon MARK MITCHELL (National—Rodney): If there was ever a bill that was a solution looking for a problem it's got to be this bill. What a complete and utter waste of Parliament's time. That's why the Minister stood—he could only speak for 2½ minutes. What does the bill do?Hon Iain Lees-Galloway: Sit down then.Hon MARK MITCHELL: Don't worry Mr Iain Lees-Galloway. Of course he wants me to sit down—of course he does. Every time I get up he's in trouble; he's running for the hills. He's blowing raspberries now—classic response from the Minister.This is a complete total utter waste of time. This is a waste of this Parliament's time. This bill affects absolutely no one. All the good legislation's been through Parliament. All our legislation's come through. This Government that was meant to be transformational with a Minister that was going to be transformational to our justice sector brings an ombudsman's bill.Who does this actually affect? Do you want to know why it's here? The reason why it's here is because there is no proliferation of the use of the name but there was an organisation that it passed the hurdles passed the tests should have been able to use the name quite legally. The Ombudsman and the Minister for some reason thought it wasn't appropriate. It went to court. They won it in court. So what do they do? They bring the legislation into the House to change it.Bring some serious legislation to the House Minister that we can get up and speak to. The reason why this Government's in trouble is if you look at the Order Paper there's nothing on the Order Paper. There's one more bill. We won't be taking calls on this—waste of time. Watch the Government now start to filibuster it. Let's see. Let's see the Minister now continue to take calls on this fantastic ombudsman's bill. It's a complete and utter waste of time. It's a sham from a sham Government. Thank you Madam Chair.
Little AndrewClauses 1 to 6 and ScheduleHon ANDREW LITTLE (Minister of Justice): This is a very simple bill achieving to do a very simple thing: to prevent very simple people from abusing a very important office—that is the Office of the Ombudsman. We have a provision in the current legislation that allows the Chief Ombudsman to grant others the use of the term ombudsman". Previous Ombudsmen have done that on at least two occasions to private organisations. So for example we have what used to be known as the Banking Ombudsman—I think it is now the Banking and Insurance Ombudsman—and there is at least one other whose name and purpose eludes me for the moment. But there are others who have been queuing up to use the name.The current Chief Ombudsman is concerned that the whole heritage of the role of the Office of the Ombudsman which carries the important role of ensuring that the State and its agencies not only comply with the law but conduct themselves ethically and properly and in a way that best serves the interests of the citizens who those organisations are serving. It would be very easy for the gravitas of that office to be diluted were it not to be properly protected.The motivation for this bill comes from a decision of the Court of Appeal in the last couple of years. The reasoning of the Court of Appeal appears to be that because previous Chief Ombudsmen have granted the use of the name of "ombudsman" to private organisations then other organisations seeking to use the name should not be denied the market advantage that goes with it. It almost sort of requires the Chief Ombudsman to compulsorily or mandatorily give the name grant the use of the name that the legislation seeks to actually allow to be protected.So this takes the power of the decision away from the Chief Ombudsman and puts it in the hands of the Minister but is very very clear that it is not expected that this name would be used for anything other than organisations or relevant agencies in the State sector. Therefore we won't have this proliferation of various ombudsmen or offices of ombudsmen. The real Office of the Ombudsman will continue to have the importance and gravitas that it now has. On that basis I think it will make a very important contribution to the pantheon of law change that this Parliament will have achieved."
Little Andrew; Dyson RuthOMBUDSMEN (PROTECTION OF NAME) AMENDMENT BILLIn CommitteeHon ANDREW LITTLE (Minister of Justice): I seek leave for all provisions to be taken as one debate.CHAIRPERSON (Hon Ruth Dyson): Leave is sought for that purpose. Is there any objection? There is none.
Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): Thank you. E Te Mana Whakawā tēnā koe. Look I just wanted to touch on one point really and it is this scaremongering around the concept of unconscionability and the suggestion that it's in some way loose. This concept has a long tradition in the law in equity and it's also found I must say in the Credit Contracts and Consumer Finance Act. The provision in that Act says that financiers can't act in a way that's unconscionable or in contravention of the standards of reasonable commercial practice. So over that time both in case law alone but also through kind of legislative interpretation the concept is very well understood and very clearly applied. There's only a few elements to it. One is very obvious: that there's some advantage taking going on. Another element of it is the vulnerability of the person being taken advantage of and the kind of nexus between that is a knowledge or a wilful blindness of that weakness. And if you put those things together we can see that we've got some real wrongdoing. Added into that there's almost always an inequality of exchange that goes hand-in-hand with it that the bargain simply isn't a fair one and when you put all that together and stand back we get the fact that this transaction overall as a whole is simply inequitable; that a person in good conscience could not enter into it and take advantage of it. So along with clauses 7 and 8 in the amendment bill it was very clear that this will be a really useful tool. It's one that should have been there a long time ago. It doesn't just apply to entering into contracts; it also applies to the performance and enforcement of those contracts. It's a really useful addition to the tool kit that is found in the Fair Trading Act: protecting consumers from the abuses the caveat emptor the imbalance of power that often exists. A fantastic bill—I commend it to the House.
McKelvie IanIAN McKELVIE (National—Rangitīkei): Thank you Madam Speaker. I've got to stand up straight after McAnulty's spoken. Now I want to address a couple of issues in this—Kieran McAnulty: I don't even know what that means McKelvie.IAN McKELVIE: I didn't mean that at all Kieran—ha ha! There are a couple of issues in this bill. First of all I'm not on the select committee that's going to have to deal with it so the piece I say on it tonight will be the last say I have on it I guess. But I just want to refer to an issue that Jamie Strange raised which I think is quite important but I don't think this bill unfortunately deals with it. If you think about the door-to-door salesman in my day when I was young. They sold eggs bacon sausages newspapers and that was about it. We now have as society evolves a very different type of door-to-door salesman. And if you think about unconscionable—if I've pronounced that correctly—acts in the course of sales I don't think this bill has got a show of capturing those people that we've designed it to capture. I assume that a lot of that has got to do with clause 9 also which talks about entering premises against the will of the property owner or the person or the resident of that house. I don't think this bill will deal with those issues. And the reason I think that and we've referred to Australia a lot already tonight is that in 10 years and in an economy 10 times the size of ours there have been two successful prosecutions under the Australian piece of law. So if you think that they've had two successful prosecutions in 10 years in Australia it's highly unlikely we're going to get one in 10 years given that we're going to adopt the same criteria they use. So I think the intent of this legislation—I think the intent of most legislation that comes to this House is good but I don't think this bill is going to do what it sets out to do and I don't think it's going to achieve it. Actually if you read clause 9 quite carefully I suspect it does cover politicians knocking on doors and we'll probably get a few notices shoved in front of us to send us on our way. I also think that I can't read it in any way where it doesn't cover the Girl Guide biscuits scenario for example. So I think it's going to capture things we don't want it to capture and it's going to let the people that we really want to get through the loophole. That's my small contribution to the bill and we clearly aren't supporting it at first reading and I hope the Economic Development Science and Innovation Committee can make something of it. Thank you Madam Speaker.
McAnulty KieranKIERAN McANULTY (Labour): Thank you much Madam Speaker. I'm very pleased to be standing here speaking in support of this Fair Trading Amendment Bill. I mean it seems pretty straightforward to me really. You know the other side of the House they call themselves the party of markets. The question I pose to the House is: how is it right to have a market that is acting where deception and bully-boy tactics and intimidation is OK? It's wrong. That's not a fair market. It's not a fair market. That's not fair trading. How is it OK where somebody can be intimidated into signing a contract that they didn't understand the terms of? You know there are provisions currently in law and what this Government is saying within this particular bill is that we want to strengthen those. We've heard tonight that there is a claim that we don't know what sort of activity this bill would capture. So let me provide some examples if I may. Photographers for example being threatened verbally abused and blacklisted after asking for payments that were due. That sort of behaviour is unconscionable and it should be.Hon Andrew Little: The Nats like it.KIERAN McANULTY: Well evidently they do Mr Little. Evidently they are comfortable with that sort of behaviour because they've got an opportunity to support this bill and they're not. I'm surprised by that because really there's no ideological position to take on this. You're either for fairness or not. And that side of the House just evidently aren't. I mean they've got an opportunity to prove otherwise but they're voting against this bill. They're trying to position themselves on the fence and say Look we'll have a rigorous discussion and we've made some points and we'll look at improving it." Vote for the bill. They're not going to. Here's another example: supermarkets penalising suppliers for promotion runs with other retailers by demanding compensation for perceived losses caused by other retailers' promotions and deducting it from the payments to suppliers. How should that be tolerated? It shouldn't and this bill the Fair Trading Amendment Bill is going to address that. That's why I have absolutely no hesitation in supporting it tonight."
Falloon AndrewANDREW FALLOON (National—Rangitata): Thank you Madam Speaker. Like my colleagues Jonathan Young and Clayton Mitchell over the other side I'm looking forward to this bill coming to the Economic Development Science and Innovation Committee. When it does come to our committee the thing I'll be looking at in particular is what I want to talk about tonight which is this definition or lack of definition of unconscionable conduct".As we've heard tonight this bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade. The problem of course with the bill is it doesn't define what unconscionable conduct is; and in fact the Minister admitted as much in his contribution earlier tonight. Instead of defining it he instead suggested that we look to Australia. So we have this extraordinary situation where not only will traders in New Zealand have to comply of course with all New Zealand laws but they'll now have to if this bill passes look to Australia to see how the legislation there or how unconscionable conduct there is defined by the courts in Australia before they can decide how they'll operate in New Zealand which I find a pretty extraordinary situation. It's also a very very poor way of making legislation. We will be voting against this bill tonight. I do look forward to it coming to the select committee though because there are some I think really important points that MPs on both sides of the House have actually raised about the Fair Trading Act so we would like to get I guess a thorough thrashing out of some of those issues. But as the bill as currently drafted where there is no definition of what unconscionable conduct is despite prohibiting it I can't support the bill and nor can my colleagues."
Strange JamieJAMIE STRANGE (Labour): Madam Speaker thank you for the opportunity to take just a brief call on the Fair Trading Amendment Bill. I agree with the previous member around financial literacy. I guess it loosely relates to this bill but I think it is something that we do have to have a good look at in our education system and starting right from the primary school age. Financial skills are a key life skill and I think that they are underrated at times. We've heard a lot of arguments for and against this bill. What this bill comes down to is around fairness around removing the potential for bullying. There was something that the Minister said that those companies who engage in fair and reasonable contracts have nothing to fear from this bill; it actually doesn't relate to them. That is the majority of companies. The majority of companies do have fair and reasonable contracts but there are some who don't and that's what this bill addresses. Look I'd just like to touch specifically around the mobile traders. We've heard a little bit about this around the do not knock" stickers and that people working for a company who disregard the "do not knock" sticker will potentially be liable for a fine of up to $10000 and their company up to $30000. Now that is a large amount of money. However that is a very important issue. Consumer New Zealand have welcomed this proposal. This is something that they've been lobbying for for quite a while because they've seen the vulnerabilities that people often feel when they open the door to someone and they're asked to leave and that person does not leave. There's often quite a strong power imbalance and often a fear there. So this is an excellent bill an excellent piece of legislation. I'd like to congratulate the Minister Kris Faafoi and I commend this to the House. Thank you."
Smith Stuart; Dyson RuthSTUART SMITH (National—Kaikōura): Thank you Madam Speaker. Well I'm on the Economic Development Science and Innovation Committee so I'm looking forward to having this bill there albeit that we'll be voting against it. But Jonathan Young is a fine chair of that committee and I'm sure we will do our utmost to try and get this knocked into shape albeit that it is the herculean task it is.At last I understand why Kris Faafoi is not standing in the Mana electorate and is going to go on the list. He fears the do not knock" signs popping up on all the doors around in his electorate and he doesn't want to be caught by being fined for not leaving the premises. It is a rather silly provision really. Ultimately if somebody is on your property and you don't want them to be there that's called trespass. You ask them to leave. There's a legislative path there a legal path if you want to deal with that. To actually add in more legislation more rules which is totally unnecessary—it is really just a waste of Parliament's time and it really does heap costs back on to the consumers the very people that it seeks to protect. Everything as I said on the previous bill which has lots of similarities to this one—there is a symmetry in negotiations there is a symmetry in sales and transactions. That is a fact of life.We would be better to help financial literacy through our education system rather than teaching our students to go out and get on the streets and protest about climate change. They'd be far better off being taught about financial literacy. The changing of the terms of a contract which was mentioned by the New Zealand First member earlier and how unfair that is—and I agree. If the terms of a signed contract are changed then that is absolutely unfair. But that's effectively what the Minister is asking Parliament to give him the power to do to give the Minister the power under regulation-making powers a job that should be done here in Parliament and in the legislation. That is shoddy lazy Government and it shouldn't happen and yet it's increasingly happening in legislation because they haven't done the work beforehand. This is a terrible bill and I'm voting against it. Thank you.ASSISTANT SPEAKER (Hon Ruth Dyson): This is a split call. I call Jamie Strange."
Lee MelissaMELISSA LEE (National): Thank you very much Madam Speaker. Before I actually get on to the purpose of the bill and you know some of the other explanations I just want to take on what Clayton Mitchell has just spoken about. His definition—I just want to do this because I might forget. He just explained that his idea of what unconscionable behaviour was was that when a farmer signs a contract with another farmer—and the contract is signed—and the bigger entity decides to change the terms of the contract and the smaller entity is going to have to wear that—I thought that was a ridiculous example because once a contract is signed how can you change the terms of the contract? You can't. I think that is something that you could potentially take to court and sue the person. I'm afraid that that is just not a very good example.This bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade—misconduct that goes beyond commercially necessary or appropriate conduct the bill's explanatory note says—and extend the Act's protections against unfair contract terms so that they also apply to small trade contracts of less than $250000 in a 12-month period.We all know that when people are in business there are costs to be met. When regulations are introduced in this House often the cost goes to the business and they have to wear that. In reality businesses often can't wear that because it costs them money. It will be passed on to the consumers and ultimately the decisions that we make in this House end up costing consumers more. And that is one of the reasons why this side of the House oppose legislation that actually build on more regulations for businesses to deal with and which will end up costing consumers more. That is one of the reasons.We are very proud of the improvements that the former National-led Government made to the Fair Trading Act in 2013. They actually benefit the consumers and we're very proud of it.Earlier Dr Deborah Russell explained that the select committee's role is to refine the definition of unconscionable conduct" and that she was going to do this at select committee. The very basis of this bill she says must be to protect the small businesses from unconscionable conduct. What this speech that Deborah Russell gave and what that side of the House is actually saying is that this Government is a solution looking for a problem. It is a solution that is looking for a problem because they're saying that the unconscionable conduct that they're trying to fix is not even defined that they can actually try and define it at select committee. So what is the real problem? I think this is a bad bill. I stand on this side with my colleagues opposing this bill."
Clark DavidHon Dr DAVID CLARK (Minister of Health) on behalf of the Minister of Commerce and Consumer Affairs: I move That the Financial Markets (Conduct of Institutions) Amendment Bill be reported to the House by 23 June 2020.Motion agreed to.
Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e Te Mana Whakawā. Ngā mihi nui. It's good to be here in this new year. Look this is a really important piece of legislation. Stuart Smith stood up before and talked about caveat emptor and then made a quite unusual comparison between buying financial services and buying a pair of jeans. I just want to pick up on that because when you buy a pair of jeans you see exactly what you get—although having seen his attire perhaps he didn't look closely enough. When you're buying some insurance product you're buying something which is entirely impossible to understand exactly. You're buying a promise—you're buying nothing more than a promise—that a faceless company will do good and indemnify you—will make up any losses that you suffer.The document—and let's be honest: who's read cover to cover their insurance policy? I suggest—[Dr Deborah Russell raises hand] Perhaps Dr Deborah Russell but no reasonable person. The fact is we take it on trust that the insurance company has written fair and reasonable terms. Then when a claim comes along all of the power is in the hands of the insurer—as Stuart Smith should know given his electorate. So in fact we've got a situation where we're buying a product. We don't actually know what it's going to deliver. We don't know when it's going to deliver it or whether the insurer will stand behind it when the time comes and deal with this fairly. And what does this bill do? What's its central precept? That when selling these products—these complex products—the interests of the consumer should be taken into account.We've heard that old term caveat emptor" bandied about by the other side. There's a reason that it's Latin and hasn't been used for 100 years: it's because it's a pretty useless term. What it means is it's a licence to cheat to manipulate to misrepresent and basically to rip the other side off if they're not as smart as you are. Frankly the law has moved on and I'm glad to see it. That is why we have a bill like this which is here to protect consumers to impose a duty on insurers and other financial service providers to take into account and take care of consumers. It's how it should be—a great bill. I commend it to the House."
O'Connor GregGREG O'CONNOR (Labour—Ōhāriu): I'd just like to correct that previous speaker Andrew Falloon—that we've had an inquiry into New Zealand. What Australia had was a royal commission of inquiry with the ability to summons people to the inquiry and anyone who has been subject to a commission of inquiry particularly a royal commission of inquiry will understand they leave no stone unturned. In New Zealand what happened was the Financial Markets Authority and the Reserve Bank wrote to the banks and asked them if they were engaging in the sort of behaviour that the Australians had done. Funnily enough they said they weren't. Well that was our commission of inquiry—a good old Kiwi one.I was once the chair of a mortgage company and that was in the good old days when the margin between lending and borrowing was around 400 percentage points or 4 percent. Now when that existed and that was the financial regime which existed and no one really needed to do this sort of thing because everybody was making so much money virtually overnight the percentage went down to less than 1 percent. When we exited that particular product we were actually getting less than 1 percent or 100 basis points between borrowing and lending and the reason we exited was the only other way we were actually going to be able to continue to make money was on value-added products like insurance etc. What quickly became clear was that we were going to have to incentivise a lot of people for us to make any money and the only people who were going to suffer were going to be our customers. So we exited. So I have a firsthand account or experience of that change in incentive. So this is a very essential piece of legislation. Nobody in banking is a particularly bad person. Nobody in there is out to rip anyone off. What they're doing is doing what humans do: they are out there to make a living the best way they can. Some people sell drugs because it's the only way they can make a living. The authorities—the State—stop them from doing that and so it is essential that just the ability the desire to make money the need to make money is not by itself a reason why the State the regulator should not become involved. The more incentive there is the more there will be an incentive for those to actually act against the interests of everyone else in the industry and that's exactly what happened in Australia and there's no reason to expect that largely it hasn't happened in New Zealand. This is to ensure it doesn't happen. This is to ensure we protect New Zealand customers. I commend this to the House Madam Speaker.
Strange JamieJAMIE STRANGE (Labour): Madam Speaker thank you for the opportunity to take a call on the Financial Markets (Conduct of Institutions) Amendment Bill—my second speech in the House this year. We've heard from the Opposition that they're not voting for this bill because it regulates companies to comply with ethical behaviour. Now I think there's some confusion over there because wouldn't we want companies to comply with ethical behaviour? And those were the exact words that came out of the mouth of one of the Opposition members. So I think the Opposition members do need to have a little bit more of a think about this.Look there is an imbalance of power between financial institutions and consumers—and yes in most cases the seller does have more knowledge than the purchaser—but trust and confidence in our financial sector is a vital part of our economy and even if the members opposite don't believe that we need balance or that we need fairness surely they believe that our financial sector must be strong and stable. If there is no trust and confidence in these services that are provided then we could have a whole lot of people not taking out life insurance for example and something like that you know could have a disastrous effect on our economy potential. So we need trust and confidence and at times the Government do need to provide some regulation to ensure that stability. This has stemmed out of recent reviews into banks and life insurers—and the Green Party member mentioned one of the reviews in Australia which quite clearly showed up that we do need some regulation. Just to close this is actually a win-win for banks and institutions and consumers and the reason it's a win-win is because it creates confidence and trust in the financial sector and that's what we need for our country. Thank you.
Smith Stuart; Tolley AnneSTUART SMITH (National—Kaikōura): Thank you very much Madam Speaker. It's great to have my first speech in the House for 2020. Unfortunately it's not on a particularly good bill but that's been well covered by my colleagues.Going back to the New Zealand First speaker earlier who spoke quite a bit about the lack of symmetry or an asymmetrical imbalance in terms of knowledge there will always be in a transaction an asymmetry in knowledge. The seller always almost always will know more about what they're selling about that product than the buyer. That is just commerce every day. Now to try and balance that up by putting in this overbearing regulatory regime is just nonsense.We have caveat emptor as my colleague mentioned before—the buyer beware. People have buyer's remorse all the time. They buy something as little as a pair of jeans perhaps or as large as a house a big transaction they can then have buyer's remorse the next day or in the coming days and have all sorts of regrets about that purchase. It seems a lot of that thinking is rooted into this bill.When we go back to the commission that looked at the banking in Australia and then the inquiry that was held here in New Zealand yes they found some issues in there. The main issue was there was a lack of documentation. It didn't satisfy the inquiry as to what the documentation around those transactions was not necessarily anything further than that. This is such an overbearing reaction. It shows a lack of understanding of commerce it shows a lack of understanding of business and I certainly am very suspicious of anyone going down this path. I always think back to you know the devil makes work for idle bureaucrats. That seems to be what they've done here try and find something to fill out their legislative programme because they didn't do the work when they were in Opposition to do some policy research. Fortunately we aren't falling into that trap.I just go back to the pursuit of profit. It is absolutely in a transaction. The seller is trying to maximise the price and the buyer is trying to minimise the price; that is how a transaction happens every time. This seems to be a surprise to people on the other side of the House. This legislation won't change that. In fact what really worries me about it is the regulation-making powers which as my colleague said may even allow them to seek to ban sales altogether. It is just a nonsense. This bill deserves to go in the bin. I'll be voting that way.DEPUTY SPEAKER: Right so this is a split call.
Sage EugenieHon EUGENIE SAGE (Minister of Conservation): Tēnā koe e Te Māngai o Te Whare. I am very pleased to speak on the Financial Markets (Conduct of Institutions) Amendment Bill and support it on behalf of the Green Party.The members of the Opposition seem to have their eyes wide shut. They seem to be unaware of the need to have a much greater standard of fairness in the financial sector as Deborah Russell alluded to. Yes there is already a licensing regime which the Financial Markets Authority can administer but what this bill does is build on the results of the Australian reviews and the reviews which have been done in New Zealand which highlighted that issues like incentives which were based around targets to sell particular volumes or to sell to a particular value which rewarded the adviser with trips overseas soft rewards like that ended up being to the detriment of the customer and focus more on benefiting the sales adviser rather than benefiting the customer. They resulted in as one of the reviews showed a tetraplegic being sold life insurance which excluded tetraplegia; so it was essentially meaningless.This Government is about fairness. I find it extraordinary that members of the Opposition are siding with the big people the banks the big insurers and not with the consumers. We all want financial markets which are fair. What this bill does by providing a regulation-making power is not using a sledgehammer to crack a nut but is ensuring that we have a fair market so that people can trust and if people trust the markets they are involved in because it's got a good regulatory framework they are more likely to buy those services rather than being vulnerable to exploitation. We know that these contracts are very complex that there is not a high degree of financial literacy in New Zealand and because of that people can be exploited. So this bill is about ensuring that we manage those risks that we have greater accountability and that we have an ability to enforce fair conduct and good conduct.The National Opposition did pass some legislation but like everything it did not go far enough. This through using the licensing system that already exists through using the ability to pass more regulations will ensure a much stronger standard of fairness throughout our financial markets. The Green Party is pleased to support it.
O'Connor GregGREG O'CONNOR (Labour—Ōhāriu): I think the previous speaker has alluded to what happened in 2008. I think what really happened in 2008 is that New Zealanders and indeed many around the world suddenly understood how vulnerable they were to what happened on the world markets particularly Wall Street. No one had heard of derivatives outside the financial markets at that stage. I do recall reading some literature about the lead-up to 2008—there was a meeting in Davos Switzerland where one of the leading regulators in the world stood up and some of the biggest greatest financial brains and investors were at that meeting. He explained derivatives to the crowd and at the end of it he asked: How many of you really have any idea what I've just said?" and there were very few hands that went up. Yet there was hardly a financial institution especially the major banks in the United States that didn't have extreme exposure to those derivatives. What they were was a gathering up of very poor quality loans mortgages into multimillion-dollar packages—the theory being that the good ones would offset the bad ones if anything went wrong. The problem being: they were all bad ones. These whole derivative packages would be made up of loans that had been made to what were called NINJAs—no income no job and no prospects. Bringing that forward then what it did is it made us all understand just how vulnerable we all were to this. So bring us forward to this piece of legislation: the Financial Market Infrastructures Bill. What we need to assure and reassure those who are in managed funds those who may even have their money in the bank is that there is a playing field which is being regulated so that those who were rendered vulnerable those who lost money—and you can think of any number of organisations in New Zealand. Blue Chip investments was one that again—so many of those who'd worked hard all their lives and had their savings and had those savings decimated through a number of these activities.So it's incredibly important that we those who have money that is moving through the financial systems have some confidence that there is some regulation. Just to give an example of what happens if there is no regulation—of course we've got the block chain bitcoin which is actually happening which is completely unregulated. We are continually hearing of problems in that industry if you will call it that which are a net result of absolutely no regulation; the jungle rules. That is why it is only the courageous who are putting their money into that area. So I have no hesitation in commending this bill as the last speaker on this the first reading of this bill today. And I think that those who are watching those who've survived this long through the debate should feel some satisfaction that there is now some work across the House being done to inure them against future financial shocks. I commend this bill to the House Madam Speaker.Bill read a first time. Bill referred to the Finance and Expenditure Committee."
Financial Market Infrastructures Bill — First Reading
Bidois DanDAN BIDOIS (National—Northcote): It's a pleasure to rise today and to give my first speech in the House in 2020 and can I say I'm looking forward to the year ahead. No matter which side of the House you sit on welcome back to Parliament. It's a pleasure.We're here today discussing the Financial Market Infrastructures Bill. We've certainly learned a lot today in the House whether it's from Andrew Bayly about derivatives whether it's about the definition of learnings or lessons from the Hon Judith Collins or whether it's the technicalities of FMIs—or financial market infrastructures—from Deborah Russell. But I just want to recap for the readers at home the purpose of this bill because it is a very important bill and important to the ongoing sustainability of our financial system here in New Zealand.The purpose is really to introduce a new regime to designate some financial market infrastructures as systemically important. For those of you at home you may remember back in 2008—and I remember very clearly—learning this terminology called systemically important". It was in relation to Lehman Brothers which of course is not covered by this bill. It's a bank; it's not an infrastructure. But the purpose of this bill is to extend the definition of "systemically important" to financial market infrastructures. That includes everything from payment systems reconciliation systems and IT systems that go with our financial infrastructure.I want to be clear to those at home who might be thinking "Well The National Party is about minimal regulation. What are they doing supporting this bill?" I want to be clear about why we're supporting this. Firstly the payment system every day—have a guess at how much goes through our payment systems here in New Zealand. Thirty-five billion dollars goes through our payment systems here in New Zealand every day or annually $8 trillion which is around a third of the US gross domestic product. So it's a really important part of our financial system and we want to make sure that for those businesses and organisations that underpin that system in terms of infrastructure if these organisations are systemically important there is heightened awareness and regulations over those systemically important infrastructures.But what does that mean? It means in effect it's not going to be over-regulation. What we're really talking about is a tiered approach to regulation. Some financial infrastructures will be designated as "Tier 1 systemically important"; "Tier 2"; or "Tier 3". For those who are Tier 1 systemically important we're really just talking about contingency plans. These financial market infrastructure companies need to have contingency plans in place in case can I say the shit hits the fan. The second tier Tier 2 is where the regulatory bodies can in fact give directions to financial market infrastructures which is a little bit more involved. The highest tier is Tier 3 which is where we appoint a statutory manager.So that is at the moment the extent of the regulatory powers. I think it's the right level of regulation. The National Party will support this to select committee and we support this bill in the House."
Coffey TamatiTAMATI COFFEY (Labour—Waiariki): Thank you Madam Speaker. I'm so pleased to actually join the chorus of support for this bill the—let's get it right—Financial Market Infrastructures Bill. I've stood here and I've listened to all of the speeches that have gone before me and as my colleague Dr Deborah Russell said it is a very very technical bill. In fact I'd be very surprised if people are still watching Parliament TV right now and actually following what is going on because a certain few people actually understand what goes on inside our financial market infrastructures.I guess to cut a long story short we've obviously as a Government as a Parliament had some learnings off the back of the global financial crisis. If this bill is going to help us to be able to better navigate ourselves whenever there is a financial market failure then obviously it should be supported. I'm not going to go into the detail of it. I know that when it comes to our Finance and Expenditure Committee we will go through it with a fine-toothed comb. Everybody around the House seems to support it; so I do too. I commend it to the House.
Dean JacquiHon JACQUI DEAN (National—Waitaki): Thank you Madam Speaker. I hesitated to get to my feet because I was reading some quite interesting background to this bill in the debate pack. First of all I have to confirm that National does support the Financial Market Infrastructures Bill at its first reading. The information I was reading as I was preparing related to retail and other payment systems in New Zealand which up until now have performed relatively well but have been only lightly regulated. Issues around particularly retail payment systems have been highlighted for a number of years in New Zealand and successive Ministers have been working progressively to address some of the more light-handed regulatory settings around matters to do with financial market infrastructures.So the background to this bill—and I congratulate Minister Grant Robertson for picking up this work and then bringing it to the House—really started to form in 2015 and 2016 when the Reserve Bank placed forward some policy proposals to update the regulatory regime for financial market infrastructures. The National Government of the day endorsed those proposals and several years later we now have the bill giving effect to them.The bill effectively replaces the existing regulatory regime for financial market infrastructures and they are contained within the Reserve Bank of New Zealand Act. The purpose of the new regime is overall to promote the maintenance of a sound and efficient financial system. That has got to be the prime purpose of this bill and its Act but also importantly as a safety net to avoid significant damage to the financial system that could result from problems with a financial market infrastructure—promote participation in businesses investors and consumers in financial markets. One of the features of the New Zealand sharemarket—the NZX—is that the market is finding it hard to find companies to register and also investors and often people in financial circles talk about the lack of depth in the New Zealand financial markets. So one of the prime reasons that New Zealand supports this bill is the very fact that this bill seeks and intends to strengthen that confidence in financial markets.One more point—because I know there are other speakers to follow—the new regime will apply to more entities than the current one. So the scope of the Financial Markets Authority will widen and capture more financial markets institutions. We do support this bill. I do have a question—regrettably I don't sit in the committee but I will follow this—on just how the new regime will capture over-the-counter trades. It was an issue that was raised by Andrew Bayly just before. I will be interested to see the mechanism by which that comes about. That is the work of the select committee. So I commend the bill to the House.
Ministerial Statements — Coronavirus—New Zealand Response