Groser Tim: Securities Legislation Bill — In Committee 
Groser Tim: Securities Legislation Bill — In Committee 
[Volume:634;Page:5534] 
TIM GROSER (National) 
: 
 I rise to support the Securities Legislation Bill and given that we are looking at the title I would like to recall the central objective because I do not think it is contested on this side of the Chamber. The objective is to strengthen our capital markets. We have structurally weak capital markets. Members may recall the Ernst and Young study that put New Zealand 21st out of 22 OECD economies in 2005 in terms of the capital raised through initial public offerings. If we look at the NZX and go back 10 years we see that market capitalisation was 60 percent of GDP which was not a stellar result. Today it is a little under 40 percent and if we compare that with Australia with a market capital of 150 percent of its much larger GDP we see the dimension of the problem. So we do have structurally weak capital markets and this bill is an attempt to address some aspects of that problem. 
Of course I have to say in passing that the answers lie in doing more than just talking about economic transformation. But I understand we are at that phase of the electoral cycle where the Government is engaging in a nice little conversation with the electorate about redistribution politics and not about the next phase of wealth creation. We know where that leads us. It leads us to where we were in the 1960s and 1970s: back towards sclerosis. We have been there before and that is where we are heading. 
On this issue yes there are some structural weaknesses that this bill is addressing and on balance National thinks it is a move in the right direction. We all understand that for capital markets to function properly investors have to have confidence in the integrity of those markets. We understand that confidence is important for the institutional investors right through to the mom and pop investors and even perhaps down to the proverbial bellboy—by legend when he is in the share market it is time to sell everything. 
So the bill takes some steps to strengthen the integrity of our systems and does a number of sensible things; that is why the National Party is supporting it. For example adoption of the standard of civil liability in this bill has the promise of providing an easier juridical path for pursuing remedies to insider-trading practices. At the same time we seek to introduce in this bill a penalty regime that is well anything but a slap across the back of the hand with a wet bus ticket. Quite severe penalties are introduced by this bill and we have to be sure that certain other compensatory changes are taken in the legislation. I think there are some important steps in that respect. 
This legislation is about proportionality and it is about fairness; tidying it up so that it applies only to serious offences is one of those steps in the right direction. Equally the provisions for the three regulatory authorities that have statutory responsibilities for pursuing misleading and deceptive conduct—that is the Securities Commission the Takeovers Panel and the Commerce Commission—are a very sensible change and we welcome that. 
I guess my main concern—and it is not original; it is shared by a number of the submitters many of whom are extremely well informed—relates to the unintended effects of legislation of this nature. We are certainly not helping our weak capital markets if in adopting this bill we frighten the horses if you like. I can see that a lot of considerations have been given to this legislation and some of those considerations move us in the right direction—for example the improved standards of defence. 
If I may just shorten my speech I think what we need to be sure about here is that we are ready to come back and have another look at this; it is a work in progress. There are still some problems with the legislation but on balance the National Party supports it.