Dalziel Lianne: Crown Retail Deposit Guarantee Scheme Bill — In Committee Third Reading 
Dalziel Lianne: Crown Retail Deposit Guarantee Scheme Bill — In Committee Third Reading 
[Volume:657;Page:6108] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 The point I am making is about the claim that there may be some shifting of investors from collective investment schemes to guaranteed deposits but that this would be minimal. What is that claim based on? What have the officials based that advice on? How much shifting is classified as minimal? Why are we again allowing a potential risk to our collective investment schemes the portfolio investment entities that are all registered there at the moment when we do not what the risk is? The statement says the risk would be minimal but how do we know? What is the basis for it? 
The statement says: “Retaining CISs in an extended DGS would not cause any particular issues other than potentially raising again the boundary issues with non-guaranteed schemes. The extended DGS proposes excluding CISs in order to assist with moving toward tighter and more limited coverage.” Well that goes against the whole theory of the extension which is to allow for an orderly transition out of the scheme. I have this terrible fear we are delaying the inevitable because it will not be the case that all finance companies that are currently in the scheme will be able to opt into this scheme with the BB rating requirement that will be in place from October next year. 
I think we are entitled to ask these questions in this Chamber when debating a bill that has been introduced under urgency a bill that we did not see until it was laid on the Table of the House. We have been denied the opportunity for a select committee hearing which Treasury officials themselves recommended take place for 1 to 2 days and which would enable us to ask these questions and have a proper discussion about it. I think we have been denied the opportunity to properly scrutinise this legislation. As my colleague the Hon David Cunliffe has said on many occasions this is only framework legislation. It will allow the Minister to extend the scheme on whatever conditions are negotiated or agreed with Cabinet. I think Parliament ought to have a greater say over this legislation. 
This week is Financial Awareness Week. I am almost speechless at the way the Government celebrates the fact that a lot of investors in this country have absolutely no idea of the level of risk they are taking with their hard-earned money. The Commerce Committee is undertaking an inquiry into certain elements relating to the collapse of the finance companies. Why? Because there are gaps and clearly a lack of understanding of risk. The other thing we have seen is that finance companies that have failed have almost without exception underpriced the level of risk in order to disguise from their potential investors the level of risk they were taking with their hard-earned money. This scheme is almost saying they are off the hook for another year before they have to face up to the reality of the market in this situation. 
I have some really serious concerns about the quality of the debate around this important matter. We have seen this debate deliberately shut down on many occasions so far. The Minister of Finance has taken about three calls in the entire Committee stage of this bill and they have been very short calls pointing me to annex 2 of the regulatory impact statement on page 20 for example on the collective investment scheme and basically reading out a paragraph from the regulatory impact statement. That is not the sort of quality discussion that one would expect to occur in such an important debate. I am very disappointed in the way the Government has chosen to treat this particular issue. 
As I say the Opposition is not opposed to the concept of extending the scheme. But I think we ought to have a much clearer exposition from the Government as to why the extension is a year long why conditions have been attached to the extension and why collective investment schemes are excluded from the ability to renew their coverage under the deposit guarantee scheme when the new one comes in. The Minister has not even discussed the issues around the content of the agreement.