Jones Shane: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — In Committee Third ReadingText is incorporated into the Bound VolumeJones Shane: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — In Committee Third Reading[Sitting date: 19 November 2013. Volume:695;Page:15027. Text is incorporated into the Bound Volume.]Hon SHANE JONES (Labour): Tēnā koe. I saw the member David Bennett recently at a sporting event in the great Waikato. It was probably a place that I would not be encouraged by my colleagues to go to—it was the boxing. But we are not boxing today with the Leader of the House Mr Brownlee. I am sure that at the moment he is studying the boundaries that have come out from the Representation Commission.Anyway let me come back to the bill the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill. We stand and support this bill. I want to actually follow up on what the co-leader of the Green Party Russel Norman had to say. The co-leader of theGreen Party was pointing out that this bill ranks international lenders’ interests above those of depositors. He also pointed out that it kind of makes it easier for us to stay on the trajectory that our small island nation State of 4.2 million people and $180 billion GDP is on—i.e. we are too reliant on international capital for our banks. It is mediated through the banks which are after all intermediaries into a housing market that is killing our dollar. That has become so expensive that we cannot get the next generation into a level of housing either that they can afford or that suits their aspirations.It is actually a compelling argument that Dr Norman puts forward but the challenge that I am always left with is OK what actual remedies is he offering? I know the remedies on this side of the House and to a certain extent they are shared by that side of the House. We are probably a lot more aggressive in saying that it is important that we engender a greater level of enthusiasm amongst households and more important provide support to those households to amass an indigenous body of capital for want of a better expression that over time lessens our reliance on international capital. But as long as the banks and dare I say it perhaps other financial entities are relied on to meet the shortfall of what we as depositors are able to contribute those international lenders are looking for not only regulatory certainty as I spoke about before but a greater degree of protection. I cannot see how we can wriggle out of that at the moment.We do have a set of policies that are designed to change the structure of the economy unlike our colleagues on the other side of the House. I suppose I have learnt over the last 5 to 6 years that there is a greater belief on that side of the House that the market will solve all of these pitfalls whereas on our side the reason that we are prepared to back the bill is not only a recognition of macroeconomic reality but an awareness that if you are getting people to take the risk and put their dough into various enterprises they should have some greater sense of recourse.We need to ensure though that we never lose sight of what Dr Norman was also saying: what are we doing as parliamentarians? What are we doing as businesses or indeed as a Government or in this case a shadow Government to engender a greater level of commitment to save and to reward that? One thing we must not allow is the ongoing slipping away the ongoing leaching the ongoing loss the ongoing spiriting away of far too much wealth out of the country without internationally owned entities—obviously the banks are at the front of the row in that regard—meeting their fair share of the tax obligation in New Zealand. If it is good enough for them to go internationally raise capital and bring it to New Zealand for people like me our families etc. who are reliant on it it is also good enough for them as they derive the profit from what passes as the New Zealand business and residential community to accept the obligation which comes with operating in a modern economy of actually paying their fair share.I certainly look forward to joining forces with Dr Norman next year and making a major issue out of that particular challenge. Whether or not we are capable in terms of how our tax collectors are currently reconfigured is another matter. But we all believe that it is necessary—and banks should be particularly knowledgable about this—that we pay our fair share.Let us just go back and touch on one or three things in respect of just reminding ourselves why we are doing this. In the end it is cheaper for an entity such as the BNZ bank to raise its capital internationally via these instruments. As I said earlier I have no doubt in my mind that BNZ has got very sophisticated computer modellers ensuring that it does not get the dollar wrong. It is one thing to bring capital back in but if you have not covered the cost it is going to impose upon you to get it out as you repay it—therein lies many a tale that currently afflicts dairy farmers and has blighted the fishing industry in the past.Are we confident that the independent monitoring is adequate? Well we have an independent monitor at the moment in the broad commercial sector called the Commerce Commission. The current Government is not confident about or respectful of that particular independent monitor. Any doubts about that would be allayed by the capricious way in which the Government announced that it was going to slash the commission’s current powers in order to reward the narrow cast of shareholders in what is now a small business formerly a big business otherwise known as Chorus. It was going to give Chorus a greater degree of protection and gouge out of you and me the consumers of the broadband services. So that is an example of how if you put into legislation or if you posit upon a particular agency the responsibility of independent monitoring by an asset monitor you must be consistent.There are a few entities that escape the grip of the institutional monitoring function that touches the broad swath of our economy not the least of which are the shipping lines. In addition there are a special set of concessions that were dreamt up in the time that the Labour Government enabled the dairy industry to create Fonterra something that it consistently disregards—at its peril I might say. That is something else that will be dealt with at the end of next year.It is important that we challenge ourselves as parliamentarians and in this case the other side of the House. When you have these entities these agencies undertaking these independent functions do not play fast and loose with them. Do not change the law and do not monster them in order to reward a narrow range of vested interests which we have seen most unfortunately over the last few weeks although I get the sense that saner minds are prevailing and that there is an awareness that you cannot run a modern economy unless you protect the role of such institutions. Those institutions also have to be accountable. They have to measure up to the fact that—as indeed the Governor of the Reserve Bank is learning to accept—you may at one level be independent but at another level you have obligations and you have a responsibility to educate inform and communicate. So I look forward to hearing that the entity that is going to be charged with the responsibility does not fall into the bog that seems to ensnarl the current Commerce Commission. That is nothing to do with us; it is more to do with the attitude of the other side of the House.To return back to the base proposition of why we are going to support this thing we realise that we are reliant on overseas lenders. We realise that it would a fantastic transformation to effect under our approach with the leadership of our current shadow Minister of Finance and our shadow Prime Minister Mr Cunliffe. If we want to reduce over time the reliance we need to husband our own domestic resources. We need to reward people for doing that. We need to ensure that the tax system does not penalise people in terms of going without now in order to enjoy something in the future so it does not represent an impossible burden in terms of future generations.I am talking here not only of the fiscal discipline needed; I am talking not only of a reliance on international capital but of our ability to care for ourselves. This is why it is very very important that we manage the transition so that we have got access to overseas funding at competitive rates but at the same time never lose sight of the fact that this generation of New Zealanders—i.e. those of us born in the 1950s and 1960s—have an obligation to ensure that when we agree to pieces of legislation like this we never lose sight of the fact that we have to pay our own way. Kia ora tātou.