Dalziel Lianne: Westpac New Zealand Bill — In Committee 
Dalziel Lianne: Westpac New Zealand Bill — In Committee 
[Volume:672;Page:18822] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I have just another question which is in relation to the nature of the business that is being transferred or the assets and liabilities that are being transferred. The way I read it is that recital (4) of the preamble talks about the transfer of “certain additional assets and liabilities of Westpac Banking Corporation being principally assets and liabilities of Westpac Banking Corporation’s New Zealand’s institutional banking business”. The preliminary provisions that we have dealt with too in clause 3 “Purposes” talk in paragraph (a) about “principally assets and liabilities of Westpac Banking Corporation’s New Zealand’s institutional banking business”. Then we come to Part 2 the part we are dealing with now which has all of the detail of the transfer and under clause 6 the Governor-General may approve the proposal to “vest designated assets and liabilities”. In clause 4 designated liabilities are defined as those that are “to vest in Westpac New Zealand;”. 
So we still have the word “principally” in relation to the assets and liabilities of Westpac’s institutional banking business but I am just trying to find where that is actually spelt out in detail. What makes up the word “principally” in that nature? Does that then mean “narrowly”—that it cannot apply to anything else—and that we could again end up in the situation where because of something that is slightly technically outside that definition of institutional banking we will be back in the House with another piece of legislation? Or is this provision now a slightly more expansive piece of legislation than we had previously? 
I guess the question I have is in relation to this initial stage where the asset and liability class is firmly established and the Order in Council is made is that it? Can no further transfer occur from one to the other under the provisions of this bill with an additional Order in Council? Perhaps the member in the chair Craig Foss could refer me to the clause that describes the specific elements of institutional banking. I am sure it is in here; I just cannot find it. I do not know—am I missing something or is it there? I do not know whether just a simple reference to a clause chipped across the Chamber might help me find what it is that I am looking for but it does not look hopeful at this stage. That is the question. 
I suspect that the Chairperson will take a closure motion at the end of all of this but I think I am asking the question for a serious reason—that is I cannot quite work out why in 2006 we did not have a sufficiently robust framework that allowed this additional Order in Council to be passed then. Why has it required additional legislation? But if this bill then subsequently shows itself to be insufficient to meet the ongoing obligations of the Reserve Bank will indeed further legislation be required? Or does this bill allow for an additional Order in Council to be made? It does not so that is very useful. I had a shake of the head which is not something that  
Hansard 
 can record. Perhaps if the member would like to say “No” then we could get it on the  
Hansard 
 record—that in fact the shaking of the head did take place. Now my colleague is nodding his head but that is different. I think he is agreeing with me that that is what should happen. But it would be useful if the member in the chair could indeed provide that comfort for me. 
The other point I wanted to raise concerns the transfer of staff because of course that does happen. The transfer of employees comes under clause 15(1): “A transferring employee ceases to be an employee of Westpac Banking Corporation and becomes an employee of Westpac New Zealand on the appointed day.” I understand why that is required. Obviously if employees are working in one branch of the corporation and are transferred over to the new bank then one would not want those terms and conditions of employment to be diminished by the transfer. But I am wondering—and I do not know whether the member in the chair is able to provide this advice—whether that then creates some inequity in terms of those who are already working for Westpac New Zealand. I guess the question I am asking is whether there is parity between the two organisations in terms of the salaries they pay their two sets of staff. It may well be that the transfer under these circumstances may create an internal inequity within Westpac New Zealand where those who belong to the branch of Westpac Banking Corporation may in fact be on more favourable terms and conditions of employment than their counterparts in Westpac New Zealand. There might have been a bit of a transfer there. 
The other thing I wondered was whether this in any way has impacted because it is one of the issues that is not raised anywhere in the legislation— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon LIANNE DALZIEL 
: I am thrilled to know that I have so much time left in this call because the next point I will make is quite a substantial one. 
Hon Ruth Dyson 
: What was your first one? 
Hon LIANNE DALZIEL 
: I know that I cannot mention the fact that the honourable member was not here but I can mention that she did not listen to that part of the contribution I made. I was talking about the transfer of employees under clause 15 involving employees who were employees of Westpac Banking Corporation. The member probably does not realise that we have Westpac Banking Corporation New Zealand which is a branch of the Westpac Banking Corporation and incorporated in Australia and its affected employees will become employees of Westpac New Zealand which is of course a New Zealand - incorporated company. That is what the purpose of this legislation relates to as a result of the local incorporation provisions of the Reserve Bank which were introduced in the earlier part of this century. In about 2004 I think the decision was finally made that Westpac had to incorporate in order to meet the provisions of the new requirements and in 2006 we dealt with similar legislation. The honourable member would probably be really interested to know that that legislation was in the name of Marian Hobbs. 
Hon Ruth Dyson 
: Oh. 
Hon LIANNE DALZIEL 
: Yeah and that is an interesting history we have already traversed but now that I have brought the member completely up to speed I am sure the honourable member would like to participate in this debate. I know that she will have a lot of questions for the member in the chair. 
Before the dinner break I was seriously talking about the transfer of employees from one organisation to the other and whether that would create an inequity for those who were currently employees of Westpac New Zealand potentially because Westpac Banking Corporation New Zealand—the branch of the Westpac Banking Corporation—may in fact have better wages and conditions of employment than Westpac New Zealand. I was not sure and maybe the member in the chair could advise us on that. 
The next point I was going on to was a question that may not have been dealt with as an issue by the Finance and Expenditure Committee because it may not have been an issue when the legislation went through the select committee. It concerns the status of qualifying financial entity which is a new status that has been dealt with under the financial advisers regime. We have authorised financial advisers under that new regime being registered as we speak. But—and this has been quite a surprise to me—a lot more institutions have taken up the role of qualifying financial entity under that regime than I had anticipated. I thought that the banks maybe some of the insurance companies and maybe some of the larger financial institutions would take up that role but I really did not think we would have 200 or 300 qualifying financial entities which apparently we do have thereby limiting the pool of talent taking up the qualifying financial adviser status. 
The point I wanted to make was about the situation where Westpac Banking Corporation New Zealand had registered as a qualifying financial entity and Westpac New Zealand had also taken up the status of qualifying financial entity. That relates to the thing I find absent from the bill and the reason why I would like the member in the chair to take a call on this issue. I alerted him to the issue before the dinner break so that he could undertake some in-depth research over the dinner break in order to be able to answer the question for which I know he has now been waiting for 1½ hours. The question is: if both of them have independently obtained qualifying financial entity status does that now merge when it is not mentioned in the bill? Or will they have to then reapply or will it be automatic so that those employees who cross over into the new entity will be picked up by the qualifying financial entity status? There has been quite a fundamental shift and that shift involves the transfer of assets and liabilities which is the whole purpose of this legislation. 
I personally think this is quite a fascinating question. It is one I had not thought of until I felt compelled to do so and as a result I think it is a question that really ought to be answered by the member in the chair. I hope that the little heads-up I gave him before the dinner break commenced has served as a basis for checking out that matter and I am sure he will be able to share the answer with the Committee. 
When he did take a call earlier on Mr Foss made comment about the application of provisions relating to taxes and duties. I know that he was telling us that this measure was completely neutral as far as the tax liability was concerned one way over the other and that was made absolutely clear with reference to the detailed provisions of the legislation. I thank him for that because I think a genuine concern was raised by another colleague of mine about the capacity for this sector to not always do the right thing when it comes to ensuring that their full liabilities are met in that regard. I accept the comments that he made on that issue. 
There was another element to this issue which was from a banking customer’s point of view. I know that the legislation states that there will be this seamless transition from a customer’s perspective but I just wondered how that would be handled by the bank in terms of notifying that to its customers who previously were being looked after by Westpac Banking Corporation New Zealand before transferring to Westpac New Zealand which is the registered company in New Zealand. Does the member in the chair know how Westpac plans to communicate that to those customers? Obviously there is quite a significant change to how that might be addressed. I think it would be useful to have that on the record of the House as well because I am sure that the member concerned both in his role as promoter of this bill and as the chair of the Finance and Expenditure Committee would have dealt with that issue in respect of how the customers would see it. 
It was interesting to note that as I understand it Westpac has ensured some options will be available to their customers in respect of this transfer and that Westpac New Zealand will be in a position to make some advice directly available to customers on the basis of their asking for that advice in terms of the seventh anniversary. I really would like the member in the chair to talk about the seventh anniversary and how relevant it is to the particular issues that are raised in this bill. It is a little bit unclear from the submission that I have read why the seventh anniversary is a particularly relevant date in terms of the application of the measure. I understand that Westpac wants to make sure that the changes cause no disruption or as little disruption as possible to its customers and that is important but I also think it is important from a customer perspective—and as I have already disclosed I am a customer of Westpac—that customers know that they will be advised in specific detail about what the consequences of this legislation will be.