Lotu-Iiga Peseta Sam: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
Lotu-Iiga Peseta Sam: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
[Volume:657;Page:6092] 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I acknowledge the previous speaker the Hon David Cunliffe— 
Craig Foss 
: The “Prince of Ponsonby”. 
PESETA SAM LOTU-IIGA 
: —the “Prince of Ponsonby” of course—and the points he raised about aligning our laws with those of our partner Australia. The Minister of Finance alluded to the reason we are pushing this bill through under urgency. There is a sense of urgency out in the financial industry. When one goes out into the industry—and does not hold bogus inquiries in Parliament—one realises that finance companies are hurting. It is true that 95 percent of the market is banks and 5 percent is non-banks but by making that statement my learned colleague ignores the important role that non-bank finance companies play within the finance market in New Zealand particularly for those in rural areas and for those who are not able to access capital from the big banks. Those non-bank finance companies play a crucial role for those people and that is why this legislation is critical to the continuation of that role. 
The transition as Mr Cunliffe alluded to will be a slow one. The deadline will be will be December 2011. That date dovetails well with the timing of the next election given that the action of the previous Government in October 2008 to put in place the original scheme was done with a little bit of haste over one weekend as Mr Nash mentioned. 
I turn back to the bill. One of the important clauses is clause 6(2) which states: “The minister may give the guarantee on any terms and conditions that the Minister thinks fit.” That discretion is important given that the criteria for the Minister to grant it will be a public-interest test. What was also referred to was the fact that people have lost their lives. I have to say that it is really poor taste to mention such people within the realms of the discussion of this bill. 
It is poor taste because families have suffered and to use it for political grandstanding and political capital is just a bit out of line. But that is OK because a finance company inquiry is being conducted by the Commerce Committee and I applaud the members who have pushed for it particularly my colleague John Boscawen and the chair of the Commerce Committee the Hon Lianne Dalziel who has steered a good course in respect of the terms of reference for the inquiry. It will cover a number of aspects which some people have alluded to tonight. Some people have referred to the nature of moratoria and a corporate trustee model and all that work will be reviewed in due course under the terms of reference for that inquiry. 
So this bill is about the creditworthiness of the finance companies—we will not touch on the banks. It is important that finance companies are creditworthy and to say that a company that has say a B or a BB credit-rating is a company that is of high creditworthiness. Obviously some members across the aisle will misunderstand the rating system because those types of companies are non-investment grade. They carry higher risks than the banking sector and appropriately they should be priced for carrying that risk. I concur with the Minister and my colleagues in supporting this bill.