Nash StuartSTUART NASH (Labour—Napier): There are very good reasons for doing this apart from the fact that we have got to come up to global standards. First and foremost as Minister Amy Adams mentioned is our global reputation. We have a fantastic reputation but we also were seen as a bit of a weak link as the Panama Papers showed. I think what happened whether it was real or just perception was it was reported globally that New Zealand did not have appropriate anti - money-laundering legislation in place. In fact a paper written by the Ministry of Justice in February 2017 said: New Zealand can be targeted by international criminal networks as a global weak link to inject the proceeds of crime into the international financial system. New Zealand has an anti-money laundering and countering financing of terrorism regime—but the regime is not appropriate to the level of risk."As the Minister outlined phase one came in in 2013 and that included banks insurance companies financial services money remitters and casinos. Those are all areas that really were at high risk—well are at high risk—of money-laundering but there are a number of other areas through which criminals are laundering money and they are real estate agents lawyers accountants conveyancers the New Zealand Racing Board and some high-value dealers. We found that it is actually reasonably easy to launder money if you have the will and we just do not have the processes in place to counter this.New Zealand is a member of what is called the Financial Action Task Force on Money Laundering. This sets standards and undertakes reviews of member countries. The operational effectiveness of New Zealand's anti - money-laundering regime will be assessed in 2020 and one thing we do know is that if it is found to be wanting then that could impact upon New Zealand's global reputation. So this is one of these things that cannot be done unilaterally; it is done on an international basis with a whole lot of cooperation. The Ministry of Justice also undertook a cost-benefit analysis and it estimated that over a 10-year period this legislation will stop between $4 billion to $5 billion—that is a lot of money; $4 billion to $5 billion—in reduced criminal activity over 10 years as mentioned. So we are talking about a substantial sum of money.But let me just go through the process of how we find ourselves here at the moment and it is not as rosy as perhaps the Minister made it out to be. My personal view is that we have not done the sort of role that we could have done and we have not addressed this with the level of urgency that I think it deserved. So as mentioned what happened was the Panama Papers came out and New Zealand was mentioned an awful lot. In fact as mentioned it was discussed in the Financial Times article in the UK and in Australia and we were noted as a soft touch for people who wanted to launder money. That is not a good look for New Zealand's global reputation and I do not think anyone would contest that.What is worrying is not the content of this bill—we are absolutely supporting this bill and of that there is no doubt. The Law and Order Committee worked very constructively to come up with an improved version of the bill which was presented to us from the House during the first reading and it is a good bill. But the process it took to get here—the legislation effectively makes up the implementation of phase two of the anti - money-laundering legislation. As mentioned phase one has already been implemented. It came into force over 3 years ago so why it has taken 3 years to get here is a little bit beyond me considering how important this is to New Zealand's global reputation and the Minister did outline this. You know we do rank No. 1 in the world I think at the moment in the global transparency index and in a number of other anti-corruption indices—we are certainly in the top three—so we have an enviable position.But what happened was in July 2015 officials advised the Minister to begin work on implementing these reforms and I am informed that Minister Amy Adams actually went against that advice. In his review on foreign trusts early last year John Shewan whom the Government appointed to a working group to actually have a look at the impact of the Panama Papers urged the Government to pass this legislation by the end of 2016. Obviously that did not happen because here we are 8 months later trying to do this. The reason why John Shewan urged the Government to do this and the reason why the Ministry of Justice urged the Government to do this was that first of all they understood the impact on global reputation and secondly it was plainly obvious that money was being laundered through New Zealand but we just did not quite understand the extent of it. But we did not work in an urgent way that I think this sort of problem necessitated.So what happened? Promises of getting the legislation into Parliament last year—promises were made by both the Minister and the former Prime Minister John Key and they were made mainly when this was the news. Those who were following this debate would know that this came up in the House—well this was top of mind for around about a month. It was a long process and it did achieve a lot of airplay and of that there was no doubt. But when the heat went off the Panama Papers and when it moved on to the next scandal the Government was involved in then it sort of disappeared from the PM's radar and the urgent action that had been promised became non-urgent and the Government put on the brakes.We need to ensure that we do eliminate New Zealand as a place for corruption and the evidence we were having was that people would come in with wads of cash and buy items—buy houses—and that did not have to be reported. In fact we discussed this long and hard in the select committee because we sort of wondered—certainly for high-value dealers—what the incentive would be if someone came in with $20000 worth of cash and actually went to purchase something only for that dealer to say: "No no I have to report this under the law."There are a whole lot of reasons why people come in with a whole lot of cash. Maybe it is legitimate—of that there is no doubt. It could be legitimate so we are not suggesting that everyone who buys something worth $20000 $50000 or $100000 with cash is a criminal but what we are suggesting is that it is most unusual behaviour. In fact the threshold at $10000 is most unusual behaviour—and anything above that I think we would all agree—because in this day and age who carries cash? My daughter wishes I would carry more and there is no doubt about that. But we operate through the banking system and the vast majority—not all but the vast majority—of legitimate business is conducted through the banking system. We have a very robust banking system actually partly—well I was going to say "partly" because of the first phase of this legislation but also because it is just a very well-run banking system and of that there is no doubt. The legislation codified what banks did anyway.But what we need to do is—and I will go back to this global reputation thing because I have gone on about this for the last 3 years actually. It does concern me because in the end as a small country all we have got is our reputation. That is what we go overseas on—our reputation whether it is our global brand as "clean green" whether it is our reputation as hard workers overseas or honest brokers overseas or whether it is our reputation for fairness overseas. What we do not want to ever end up with is a state of play where people think they can come over here and do business in a way that they do business in other more corrupt countries. We never ever want to be in that situation and we never ever want to have that reputation. That is why we absolutely support this bill but it is why I am also slightly disappointed that it has taken so long to get here because it should not have.One of the things that we did discuss in the select committee—and we debated this long and hard amongst ourselves actually in a constructive way I must admit but also with officials—is when the regimes actually came into place. How this legislation is going to work is that the Act is passed it gains Royal assent and then once that happens regulations are written for each sector that is covered—and as mentioned we are talking about real estate agents lawyers accountants conveyancers—but what we do understand is that there is a cost to these businesses. What the businesses said to us was that their concern was that they were unsure what they were going to actually have to implement because until this legislation is passed and the regulations are written these businesses are not 100 percent sure what they are going to have to put into place.So we discussed the cost and the impost on this but also how that would be passed on. We came to an agreement on this but what we also did believe was that we could not have a situation where the cost was so high or the impost was so great that in fact it was done in a way that meant that these organisations could not comply with the law. So the bottom line is that we support this 100 percent but we did have a little bit of a reservation about the process."