Sharples Pita: Reserve Bank of New Zealand Amendment Bill (No 3) — Second Reading In Committee Third Reading 
Text is incorporated into the Bound Volume 
Sharples Pita: Reserve Bank of New Zealand Amendment Bill (No 3) — Second Reading In Committee Third Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18211. Text is incorporated into the Bound Volume.] 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa. This bill has the primary purpose of implementing regulations for non-bank deposit takers. It is interesting to even consider what is meant by the concept “non-bank deposit takers”. It reminds me of a longstanding discussion about the use of the term “non-Maori” a term that places all the emphasis on what people are not rather than on what people are. I have always considered it more appropriate for people to define their own identity their own cultural heritage whether it be as Pakeha tauiwi Scottish African or Tongan. So I come to this bill wondering how it is that we are implementing regulations for finance companies building societies or credit unions by considering what they are not; in other words deposit takers not of a bank. This bill therefore defines the default position—what these deposit takers are if they are not deposit takers of a bank.  
This bill implements a new framework that will require all deposit takers to comply with minimum prudential standards as enforced by trustees and the Reserve Bank—standards that in themselves will ensure that care caution and regard are taken in providing for the future. We in the Maori Party can think of no better goal than to legislate for care and caution in the context of investment strategies. Such principles will be welcomed we know by the lobby group Exposing Unacceptable Financial Activities. It has been established to stand together in solidarity with the victims of the finance and investment industry collapse. Its very reason for being is to ensure that New Zealanders are given every opportunity to receive information to apply for legal aid and to pursue multiple avenues to reach a just resolution for all victims of failed finance companies. So we come to this bill alert to their suffering and wanting to see how this legislation will allow deposit takers to better care for and protect the finances of their investors.  
Exactly how severe this crisis has been on New Zealanders is perhaps best represented through the words of Exposing Unacceptable Financial Activities coordinator Suzanne Edmonds: “Investors lives are in total despair coupled with economic insecurity such as losing their homes while New Zealand sits back watching the games and neglect by those who have a duty of care slopping around discrediting us all.” The Maori Party takes very seriously our mission to listen and to hear the voices of the voiceless. We have heard the pain of the people who have taken the fall for the company mismanagement. We have heard the pleas for accountability and the collective stand to insist for compliance enforcement upon the finance industry. We must not overlook the victims of finance collapses including those of Bridgecorp and Blue Chip. 
Hon Mahara Okeroa 
: That’s right. 
Dr PITA SHARPLES 
: Cool bro. The Maori Party is aware of a number of whanau whose quality of life has virtually disappeared overnight—whanau who lack the funds to take legal action; whanau who have had to sign their homes over in mortgagee sales simply to stay afoot. The headlines may highlight the dollar amounts lost and the fact that 13 firms have failed in the last 18 months owing 61341 investors $1.5 billion but what has hit home hardest for us is the real stories of lives hurt by Hanover Finance—victims of money managers who have mismanaged their life savings; stories of real grief.  
We were interested in the views the Institute of Chartered Accountants of New Zealand expressed to the select committee. It believed that the case for a more prescriptive heavy-handed prudential regulatory regime for non-bank deposit takers had not been sufficiently made. Its view was that the collapse of finance companies is not sufficient justification as failures are happening in other jurisdictions that are more regulated than New Zealand. Its view was that such measures should be used only in extreme circumstances where the risk of the market failure and significant harm were relatively high. However we cannot overlook the fact that since the Institute of Chartered Accountants of New Zealand made its submission in March this year 16 more finance companies have entered into difficulties with some entering into moratoriums and some going into receivership and that eight more mortgage trusts or property funds have closed or suspended the repayment of investors’ funds.  
Perhaps the more compelling analysis in our view was the advice we received from the Federation of Maori Authorities. It contended that regulations to increase prudential standards are urgently needed to tidy up the sector and make it more accountable to its investors. In fact if anything they should have been in place a whole lot earlier. We know the reality that a lot of mum and dad investors including Maori have been investing their savings in finance companies without realising the actual nature of the risk that they are exposed to. It is that long lost hope when our families are struggling to survive to pin our trust on and have confidence in finance companies to create the pot of gold at the end of the rainbow—a hope that as the reports remind us is often not well placed as these companies do not necessarily have the prudential rules and standards in place to properly protect their investors. The common misconception is that there are standards in place and proper monitoring but there are not. I commend the advocacy of groups such as Exposing Unacceptable Financial Activities Society which has so bravely represented the realities of those who may well have otherwise lost hope.  
We in the Maori Party will support this bill as we believe the changes will allow deposit takers to better care for and to protect the finances of their investors. We also support the fact that the changes allow the Reserve Bank to increase its ability to regulate monitor and protect the New Zealand finance system and economy. Such attention to the financial infrastructure is we believe important for the kotahitanga—the nationhood—of this place this country of ours. Finally we want—and I am sure every other member of this House joins me in this—to minimise financial collapses. We have heard the impact the collapses have had on families and on the economy. For all these reasons we will vote in support of this bill at its second reading.