Curran Clare: Financial Markets Conduct Bill Financial Markets (Repeals and Amendments) Bill — Third ReadingsText is incorporated into the Bound VolumeCurran Clare: Financial Markets Conduct Bill Financial Markets (Repeals and Amendments) Bill — Third Readings[Sitting date: 27 August 2013. Volume:693;Page:13010. Text is incorporated into the Bound Volume.]CLARE CURRAN (Labour—Dunedin South): I acknowledge the work done by the members of the Commerce Committee who are sitting on the other side of the House on the original bill the Financial Markets Conduct Bill and in particular the chair Jonathan Young. I think it is important to show the respect that we have for each other when working on this sort of legislation. I would also like to acknowledge the sensible comments of Andrew Williams about the time that it has taken to get to this point.When a bill comes back to the House after a prolonged select committee process you have to ask yourself how it can sit on the Order Paper for another year before it gets to this point. That is a problem in this House particularly with legislation that is needed to put in place a regulatory regime to basically deal with the situation that saw 61 finance companies—12 months ago it was 61—fail in 4 years. Andrew Williams mentioned the 250000 investors. This was a very serious issue and it has taken another year for the legislation to get to this stage.I think it is also important that we look at this and we think that although this is dealing with the shortcomings of our regulatory system which was partly responsible for at least these financial company failures—no single entity took responsibility for theproblem—the fact is that it is not enough. This legislation ensures that the Financial Markets Authority has broad oversight of the sector and it ensures that Kiwi investors do not face this sort of disaster again. However as I said it is not enough and there should be other pieces of work going through this House right now. I say this with reference to the member on the select committee Sam Lotu-Iiga who has as I understand it a loan sharks bill that is sitting languishing at No. 40-something on the Order Paper. That bill is supposedly something that this Government made a big fanfare about more than a year ago—and it is not being progressed. The bill deals with our most vulnerable members of society and the way that they are being exploited. It is a key piece of legislation that should be being dealt with. It was introduced in April this year and it has still not progressed any further.The other thing that should be being progressed through this House right now is the issue of tax fraud. In respect of tax fraud and tax evasion this Government—that Government on that side of the House—should actually be bringing before us measures to address the issue of the $1.2 billion a year estimated by the Inland Revenue Department in tax discrepancies and the $140 million in actual tax fraud. Instead what we see is a focus on welfare fraud which is estimated at around $20 million a year in relationship fraud. The discrepancies and the prioritisation are extraordinary and I think that that Government should be held to account for its lack of attention to those two key pieces of work that it should be focusing on.I would like to make some comments about the Greens’ position on this bill. It disturbs me that I have heard them speaking in the second reading debate after the bill came back from the select committee and again tonight about opposing the legislation. They say they do not believe that the criminal sanctions in this legislation are actually going to be able to be implemented. I would like to acknowledge the officials who worked on this legislation. There was a lot of really hard work and they were put under the spotlight on measures such as whether or not those criminal sanctions would actually have an effect and I would like to make a couple of comments on that.The Commerce Committee received a number of submissions on the appropriate mental or fault element for criminal liability and the main issue that the submitters focused on was whether knowledge or recklessness was an appropriate threshold for the serious criminal offences in the legislation. A lot of submitters actually told us that they thought that was far too strict and that we should not be going there or that it was too low or too uncertain. Submitters either preferred knowledge alone noting that it included wilful blindness or suggested that there should be proof of dishonesty. We were told that the meaning of recklessness is not unclear. It has a standard element of criminal intent in criminal law. Its meaning is clear and well-established which is that there must be foresight of dangerous consequences that could well happen with an intention to continue the course of conduct regardless.The legislation does not criminalise reckless conduct or risk taking generally but what it does is impose criminal consequences only where a person is reckless as to a particular circumstance that attracts liability. This was very carefully thought through. The advice that we were given was very strong and clear. In the end the committee determined that this was the right approach to take. I think we are going to see an outcome with this legislation and to vote against it purely on that basis has I think an element of recklessness in it given the amount of work. Yes it has taken far too long to get to this point but given the amount of work that has gone into it the amount of thought that has gone into it I think that it is worthy of giving it the benefit of the doubt.The principal policy objective behind this legislation as you have all heard is to facilitate capital market activity in order to help businesses fund growth and to help individuals reach their financial goals but it is also about working for investors becauseinvestors must have confidence in the integrity of the financial markets. This weighty tome of legislation—a doorstopper the bigkahuna or whatever you want to call it—actually represents integrity in our system. It was begun under a Labour Government in the work that Lianne Dalziel did in the Capital Market Development Taskforce. It is ultimately about ensuring that investors particularly those everyday investors can be reassured that there is a system in place that brings all of those parts of the system together that there is accountability that there is responsibility and that ultimately there are sanctions in place if things go wrong. That is the objective of this legislation.I also want to acknowledge the work of Clayton Cosgrove in the development of the significant and substantial amendment that he produced. I would also like to acknowledge the work of the Minister of Commerce in pushing this legislation through. Yes it has been pushed through its Committee stage and the subsequent third readings under urgency but it has taken too long to get to the House. I do hope that the Government will pay attention to the priorities that it needs to focus on next.