Burns Brendon: Auditor Regulation Bill Financial Reporting Amendment Bill — Third Readings 
Text is incorporated into the Bound Volume 
Burns Brendon: Auditor Regulation Bill Financial Reporting Amendment Bill — Third Readings 
[Sitting date: 11 May 2011. Volume:672;Page:18632. Text is incorporated into the Bound Volume.] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I will take the opportunity as I suppose the tail-gunner on this important legislation to affirm the importance that the Labour Party attaches to regulation. I once heard regulation described as the necessary price for a civilised society. I have also heard it described as “One man’s chains are another man’s freedom” and I say these bills the Auditor Regulation Bill and the Financial Reporting Amendment Bill will provide financial freedom and security to more New Zealanders than we have seen in the past.  
I am pleased that Simon Power was the Minister who brought forward these bills. I shudder to think of the sorts of financial regulations we might have seen if a Minister like Rodney Hide with a well-known distaste for regulation had been the Minister chosen to bring through this legislation. We have seen in the past the consequences that ensue from a complete move away from regulation. I think back to the multibillion-dollar issue of leaky homes which was created by a volatile cocktail of deregulation leading to poorer building practices and the ensuing results for many thousands of New Zealanders.  
These bills are about the oversight of those who have a role in auditing financial companies that are players in financial markets and those much smaller than that. If I think of an example that I would like to see subject to the sort of scrutiny that these bills embody I think of the detestable character Bernard Whimp who as recently as this week was still crowing about the money he managed to extract from poor and vulnerable consumers of financial products. He describes this country as being one that wants to wrap everybody in cotton wool. In other words what he wanted was the opportunity to rape and pillage the financial savings of poor mum and dad investors—not sophisticated people—who presumed that when somebody approached them over purchasing shares that person was acting in a broad set of interests not simply the venal self-interest of one Bernard Whimp.  
I also think about the two people behind Hanover Finance who used to advertise on our State television news programme with the line: “Hanover the name you can trust.” In fact they were taking the mum and dad investors’ money and putting into their highly speculative investments with no accountability no trail and no proper audit. That saw thousands of mum and dad investors lose their life savings. That is why we need regulation as embodied in these two bills. So I am pleased that Labour has supported this legislation through Parliament to this point. I think it makes absolute sense.  
I have a final point in support of this legislation. Today we saw the Governor of the Reserve Bank Dr Alan Bollard appear before the Finance and Expenditure Committee in an open session. He talked about how we are seeing a more resilient position in the financial system but it is still subject to volatility and uncertainty. He particularly noted that in the insurance sector which has come under a lot of stress in New Zealand because of the Christchurch earthquakes we have already seen one major insurer needing financial reassurance from the Government. He noted that there are new prudential rules for the insurance industry. They do not come into play unfortunately until next year but he is taking a keen interest in how the insurance industry is governing itself prior to it coming into the new regime that takes effect from next year.  
Dr Bollard noted that although overall the insurance industry is sound and functioning well some may fall short of the sorts of standards that are expected under the new licence requirements and that could lead to some industry consolidation and exits. Already we have seen one company Western Pacific go under. I know personally of people who have lost their insurance cover on buildings in Christchurch as a result of that company going under. It clearly was not subject to the sorts of regulations that this legislation is bringing in for another sector of the financial markets. That is why we need this legislation and why we need regulation. We do not want heavy-handed regulation but we do need to see people in this country being able to invest with confidence. I support these bills. 
Bills read a third time.