Curran Clare: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Curran Clare: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4983] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak to Part 1 of the Securities Disclosure and Financial Advisers Amendment Bill. The bill is a step in the right direction in this recession a recession the likes of which we have not seen since the 1930s. The bill attempts to deal with some of the struggles that businesses are facing in raising capital giving certainty to those companies. 
Around 11 New Zealand finance companies are unaffected by receivership moratoria or restructure according to a report that was considered by the Commerce Committee. That report was the very helpful  
New Zealand Finance Companies Report 2008 
 prepared by McDouall Stuart. There used to be a lot more of these companies before the pinch of the recession and many of them are presently busy restructuring and dealing with falling levels of reinvestment from retail deposits. 
This bill attempts to deal with the struggles that finance companies are having by providing for the use and regulation of a simplified disclosure prospectus by stock exchange - listed issuers offering certain debt and equity securities. Amongst the sector there is some hope though thanks to the previous Labour Government’s fast attempts to guarantee retail deposits in these tough times. Until the guarantee scheme was announced we did not see a recovery from the debenture downturn that was being faced by most of the sector. 
The “buy now pay later” approach that has become so ingrained in many New Zealanders is over. New Zealanders have traditionally had a poor record of savings in New Zealand and that has been worrying. Savings are important during recessionary periods because we can never be sure of what is around the corner. That is why KiwiSaver—a Labour Government initiative—was so important. Unfortunately KiwiSaver is now being eroded. 
The poor savings record of New Zealanders has resulted in a reliance on offshore funding and KiwiSaver simply makes sense as a voluntary savings initiative that was designed to make it easier to save for the future. But on the election of this Government one of the Government’s priorities was to examine KiwiSaver. As with many initiatives the Government decided there was room for change and then it decided to gut the scheme. Any of the changes made to KiwiSaver simply go against what the scheme was set up for. 
With regard to global pressures I tell members there has been encouragement in the recovery of household savings. That should contribute to an improvement in New Zealand’s external balance over the next few years according to a May press statement from the Reserve Bank stating that the global financial crisis is still affecting New Zealand. 
The explanatory note of the bill states: “The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” Finance companies have been heavily hit by the recession because they were typically the holders of second or subsequent mortgages that took direct hits and it was the start of the property market downturn in 2007 that was the crucial turning point of the collapse of New Zealand finance companies. 
It is interesting that of those finance companies that struck problems most opened their doors only 5 or 6 years ago. It was Labour that set up the Capital Market Development Taskforce in July 2008 which is where I understand many of the proposals contained resulted from and I thank the Hon Lianne Dalziel for taking that initiative. 
Another initiative that this Government could have taken but decided against was the inquiry into bank profits by the Finance and Expenditure Committee. Today Labour the Greens and the Progressive party will hold the equivalent of this inquiry as announced today in a joint statement. Labour wants ordinary New Zealanders to share their views—and we are listening unlike Government members on the other side of the Chamber.