Clark David: Non-bank Deposit Takers Bill — In Committee Third ReadingText is incorporated into the Bound VolumeClark David: Non-bank Deposit Takers Bill — In Committee Third Reading[Sitting date: 19 November 2013. Volume:695;Page:15031. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I think we should acknowledge right from the start that the Non-bank Deposit Takers Bill is a complete waste of time.Effectively it moves legislation from one area to another and Parliament’s time could be better spent especially in urgency when we are supposed to be prioritising legislation that really makes a difference at short notice to our economy and to its settings. We have just debated a bill that has been sitting around for a long time in respect of the level of—what was it? It is slipping from my mind.Hon David Parker: Covered bonds.Dr DAVID CLARK: It was the level of covered bonds sorry. Thank you to my colleague. It was legislation that was important to have in place eventually. It has taken the Government a long time to get there. We are debating things under urgency that ought to really I guess have been tidied up earlier on.This is a Government though that seems to have its eyes off the ball. David Parker has already alluded to many other things that could make our economy more productive and that could change the relative balance between the productive and speculative sectors in order to make a more productive economy. That would help this Government’s fortunes. It does not seem to be interested in the wider interests of the New Zealand economy preferring instead the deals with the likes of Chorus that we see being cooked up at the moment; Skycity the casino deal that will build a convention centre off the back of problem gambling; and Rio Tinto. Actually the taxpayer is getting a pretty poor deal on the deals that are being done. They do not seem to have any advantages for the taxpayer other than getting the Government out of a hole when it has made commitments.This legislation as I said largely replicates legislation already in place. We heard from a submitter from Chapman Tripp who thought that one point worth noting was that the capital adequacy criteria tend to be much more stringent in practice than the advertised minimum capital of 8 percent due to the high risk weighting given to some asset classes—as much as 350 percent—and the market risk - operational risk multiplier. This is something of a variance to the original conception around second-tier financial institutions and may result in a shrinkage to the sector greater than is allocatively efficient. In layman’s terms that is really about perverse incentives to loan heavily into the mortgage market and away from productive areas. This bill may actually have a perverse outcome; when we want those firms to actually be investing in productive assets they may be forced to take on capital adequacy measures that hamstring them and make them less competitive in the market place.I will be interested in the view of the Minister in the chair Associate Minister of Finance Coleman and whether he is willing to defend it. He will have known that this bill was coming up having looked at the Order Paper overnight and no doubt will have studied the finer points of the legislation and have a view as to why the Government is choosing to disadvantage credit unions why it is making life very difficult for them and why it is trying to push more money towards the speculative housing sector when that is such a problem for New Zealanders. Ordinary average Kiwis cannot get into their first home. This Government seems determined to make that worse. We have the loan-to-value ratio restrictions that have been put through by the Reserve Bank which are playing out in a strange kind of way because although first-home buyers cannot get into the market it is making it a little bit cheaper for property speculators to get in. We see the inequalities widening and here we have another measure that distorts the economy further. This is sadly indicative of a Government that has its eye off the ball. It is not about rebalancing the economy. The Minister in the chair should stand up and provide some technical advice as to why that incentive will not come to pass. I think it will be embarrassing if he is not willing or able to defend that.The Government ought to be focused on rebalancing the economy not on passing bills that simply shift legislation from one part of the book to another. It should be moreconcerned about creating jobs and supporting exporters. These are the things Labour wants to do. We know that our export economy needs to be supported. The high exchange rate is crippling our exporters. We hear that time and time again but the Government is reluctant to put monetary policy in place that would support that. It is reluctant to undertake pro-growth tax reform—the likes of a capital gains tax which would see money go towards the productive sector and out of the speculative sector. It is reluctant to support research and development in this country—and on it goes. It will not put in universal KiwiSaver which would also create capital depth and address the problems that this bill is in a way setting out to fix. Those bigger solutions have been looked over in favour of tinkering and that is a great disappointment.This legislation needs to strike a balance. It is not quite doing that in the right way and it is similar to those things we have seen in the past with the Crown Retail Deposit Guarantee Scheme where the Government took its eye off the ball. We saw in that case a 25 percent increase in South Canterbury Finance’s books the risk borne by the taxpayer and then we saw a ten-fold increase in another finance company. This is a Government that really does not have itself across the detail but it is interested in making sure that taxpayer money is handed over to get the deal and to get things out of the public limelight. We are seeing that with Chorus now. We have seen it with Rio Tinto where the Government handed over $30 million—30 million pieces of silver my colleague Clayton Cosgrove says—without a jobs guarantee. The very next day it is talking about laying staff off. This is a Government that is doing deals to get things off the front pages like the Skycity Casino deal. It is really not focusing on growing the economy which is what we really need. We need more jobs—jobs for Kiwis high-value jobs—and that will be created by having the right economic settings not by protecting the vested interests that this Government seems so determined to protect.We hope that the Government sees the light. We hope that in the future it applies the principles that I have outlined because on this side of the Chamber we are interested in ordinary Kiwis—those extra people who are unemployed. There is a much higher unemployment rate than when National took office. Unemployment has gone up and up and median wages are down under this Government in real terms. That is why New Zealanders are feeling the pinch. The cost of living has gone up but their wages have not. With the tax cuts that the Government put through in 2010 I note that 40 percent of the value went to the top 10 percent of earners and the bottom 20 percent got just 10 percent of the value. That is disappointing. That is growing the gap between rich and poor. The gap between rich and poor has never been so high in New Zealand as it is under this Government. Inequalities have grown and this Government seems happy to oversee the demise of this country.