Nash StuartSTUART NASH (Labour—Napier): Mr Assistant Speaker you will note that I did not interject in any way shape or form because I might have to engage in some of the same activity. We are supporting the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill. The bill is not quite as boring as that last speaker Stuart Smith made it out to be. In fact when he said at the very end I am very pleased to introduce this bill to the House." you would not have believed it would you? You would not have believed it.I understand Mr Tabuteau's frustration here because if you are reading something at least put a little bit of energy into it especially when it is the member's own bill. It is his only member's bill. So get out there go hard for the credit unions stand up for what you believe in—a bit of passion. Read it as if you mean it.But anyway what I want to say is that there is a credit union in Hawke's Bay. It is called NZCU Baywide. It does a fantastic job for members and for people of the bay. It is a different type of organisation from a bank and it plays a very important role. The legislation that governs NZCU Baywide is 35 years old now and the world has changed significantly since 1982. I think you were in the House Mr Assistant Speaker or no you—anyway the world has changed—The ASSISTANT SPEAKER (Hon Trevor Mallard): Well if the member continues that he will not be.STUART NASH: Sorry. I think it is up to Parliament to bring this piece of legislation up to the 21st century standard because there is no doubt we are demanding a much higher level of accountability from our financial institutions but we also want to level the playing field for them as well so that citizens have true options about whether they go to credit unions friendly societies banks or whatever in terms of borrowing lending etc. etc.There is a process point that I would like to bring up before I continue. I am going to quote here what Stuart Smith in an interview with Fairfax actually said: "The proposed changes"—this is talking about this bill—"were originally part of the Regulatory Systems (Commercial Matters) Amendment Bill however the decision was made to put them forward in a standalone bill." The Regulatory Systems (Commercial Matters) Amendment Bill was a Government bill that had minimal changes and minimal deletions by the select committee and the Committee of the whole House. How or why a Minister would actually take these clauses or this part of the bill out of the original bill and give it to another member as a member's bill is highly concerning.There are two things that concern me. First of all that is so not appropriate in any way shape or form. We know this. The second thing is that it just shows how serious the Government is about this bill itself because when a member drafts a member's bill and it goes into the ballot the odds of it being drawn out are actually not that high. The member himself has alluded to this. I am not too sure how long the member has been in the House—this is your second term is it not Mr Smith? First term? Third term? Anyway he has been in here long enough and he is the first to admit that it is his first bill that has ever been—[Interruption]—first term—drawn out of the ballot. So the odds of it being drawn out are not that high. It just shows the level of respect or the level of urgency or where this actually places in the Government's work plan.Now that it has been drawn out you heard the member it was almost as if—you know some people get a bill drawn out of the ballot and they are ecstatic because it is something they are very passionate about. I mean I had a bill drawn out about council amalgamation and I can talk for an hour on that without notes or probably longer—or probably longer. But it is often something that a member is very passionate about and they take every opportunity to jump up. They use the media and they go hard on it. Then there are other times when a member's bill gets drawn out—and this bill here is the classic case—where you can almost hear them say: "Oh no how did that happen?". They get a speech and they have got to read it out and there is about as much passion as a damp squib.The thing is I am aware that credit unions and friendly societies do welcome this piece of legislation but I know that the question a number of people will be asking is what a credit union is and what a friendly society is. I mean what are we actually doing with this bill and what sorts of organisations are we doing this to?Well just to help those watching and members on the other side—because I doubt Alastair Scott knows what a credit union is—a credit union is a type of financial cooperative. They range in size from small volunteer-only operations through to large entities with thousands of participants. Credit unions can be formed by large corporations organisations and other entities usually for their employees and members. The basic model that a credit union uses is that members pool their money—technically they are buying shares in the cooperative. That is what they are doing. They are in essence shareholders but they pool their money in order to be able to provide loans or demand deposit accounts etc. etc. I suppose the biggest difference between a bank and a credit union is that a bank functions to generate profits for its shareholders whereas a credit union operates as a not-for-profit organisation designed to serve its members who are also de facto owners. That is the main difference between a credit union and a bank.Now what is a friendly society? To be honest—you know I have sat on the Finance and Expenditure Committee for a long time. I think I am reasonably financially literate and if someone said to me "What's a friendly society?"—I actually did not know what the formal definition of a "friendly society" was. I thought it was the Labour Party where we all get together because we are all friendly unlike the National Party. But it is not. There actually is a definition.A friendly society—and when I talk about this people will know what I am talking about actually—is sometimes called a mutual society or a benevolent society. What it is actually is "a mutual association for the purposes"—here we go—"of insurance pensions savings or cooperative banking. It is a mutual organisation or benefit society composed of a body of people who join together for a common financial or social purpose." So it is a little bit like the Labour Party I suppose. "Before modern insurance and the welfare State friendly societies provided financial and social services to individuals often according to their religious political or trade affiliations."What has happened with the advent of the modern bank and the welfare system for example is that friendly societies have moved from being almost like bodies that represent trade unions etc. into having a much wider scope. I suppose that is one of the reasons why we do need to amend the legislation because the world has changed substantially and the role of friendly societies and credit unions has also changed.The thing is this party will join the Government in saying that we support every piece of legislation that looks to get rid of red tape or to remove unnecessary regulatory barriers but we must also be aware that in this day and age the ability to defraud or launder money etc. is also heightened. In fact in front of the Law and Order Committee at the moment is a bill that is phase two of the anti - money-laundering legislation. We also need to be aware that whilst credit unions play a very important part in the fabric of society—often a lot smaller than banks—they will also be covered and are covered I am pretty sure by anti - money-laundering provisions.The thing I suppose—I am going to digress slightly here just for about a minute and a half—that really concerns me when we look at the Police Estimates is the amount of money given to police to investigate fraud. What we heard in the select committee yesterday was that in fact about 90 percent of the fraud committed within banks is not taken to the Serious Fraud Office or is not reported. That is because often these institutions do not want it out there that their employees have committed fraudulent activity.But anyway back to the bill for another minute and a half. We do support this—with a passion. It is necessary. I look forward to this coming—I am assuming it is going to come to the Commerce Committee. I am unsure but I assume it will which is the reason that I am speaking on it.I know the CEO of NZCU Baywide and he is a very good man. I am looking forward to engaging with credit unions and friendly societies just understanding the issues that they have and the opportunities they have but also the opportunities that this bill is going to provide which perhaps are not available to them at this point in time. I also want to know what sorts of systems they are going to put in place because this will create extra risks. What this bill will do is ensure that credit unions and friendly societies can actually lend money wider or change their operations but with any change in operations—certainly ones that are provided through the regulatory and legislative process—there must be systems in place to ensure that with any change those risks are mitigated. You can never eliminate risks but they are certainly mitigated.So there will be a cost to credit unions and friendly societies. I am keen to know what that cost is and I suspect that might be one of the reasons there are some credit unions that do oppose this. But the bill will appear before the select committee and I am looking forward to following this through to the next stage. We will support this and it has been a pleasure to speak on it. Thank you very much."