Genter Julie Anne: Credit Contracts and Financial Services Law Reform Bill — First ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Credit Contracts and Financial Services Law Reform Bill — First Reading[Sitting date: 17 September 2013. Volume:693;Page:13412. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green):Tēnā koe Mr Assistant Speaker. I rise to speak in support at least at this first reading of the Credit Contracts and Financial Services Law Reform Bill on behalf of the Green Party. The Green Party has been very enthusiastic about this bill coming before the House. I am glad that we have finally got to the first reading. It was first introduced in April and one would have hoped that given what appears to be broad cross-party support across the House and given the dire need for this legislation the Government could prioritise it a little bit better. I have to congratulate the officials from the Ministry of Consumer Affairs who have been working on this for many many years. It appears that the work in this area first commenced in 2007. This regulatory impact statement is dated October 2011 which is nearly 2 years ago. The bill will hopefully provide some protection for the most vulnerable in our society and provide better regulation of what are known as third-tier lending operators.The lending practices of such credit providers can result in some people getting into severe financial hardship and spiralling debt. That is a major social problem. It is a major economic problem. It has serious costs and implications not only for the affected individual but for their families for communities and for wider society. I just have to say that the excellent aims of this bill which are essentially to ensure that there is a responsible lending framework and protection for vulnerable consumers really need to be considered within the wider policy context of this Government which is relentlessly pursuing an agenda of increasing inequality by protecting the privilege of its mates by looking after big corporate rent seekers oligopolies and monopolies and undermining the rights and protections of workers with the Employment Relations Amendment Bill.We have to understand that one of the factors that is driving the need for some people to look for this short-term credit is low income. I note that the Families Commission released a report in 2012 calledPacific Families and Problem Debt and it conclusively found that low income was one of the factors contributing to financial strain in Pacific families. The reasons given for borrowing from fringe lenders were for eminently understandable needs. Forty-four percent of Pacific families who had gone to fringe lenders needed the money to pay for essential items and 36 percent needed it to pay for other loans and debts. The vast majority of families who had to go to these dodgy lenders were doing so because they could not meet their basic needs. Going for something like a short-term loan of just $800 in one case spiralled out of control to a debt of $70000. That is completely ridiculous and unacceptable. It is unacceptable that some families who are struggling to get by because of policies in the global context that have seen low wage growth over the past few decades are going to these short-term lenders out of desperation. They are being targeted by unscrupulous lenders who in many cases have a deliberate business plan which is to take advantage of people who do not have much who desperately need money and who do not understand the implications of 2 percent daily interest rates. It is completely unacceptable that families who are struggling who are working hard and who are simply trying to pay for essential items should find themselves in a situation of spiralling out-of-control debt. It is not good for them. It is not good for wider society.I think it is important that although the steps being taken by the Government are welcome they have taken quite a long time. In the meantime since this regulatory impact statement was written in October 2011 we have had an election and we have had the introduction of legislation for the mixed-ownership model which was a flagship policy of this Government and which was essentially to sell off or partially privatise publicly owned assets selling them to people who already have quite a good deal of wealth. They have money sitting aside that they can afford to invest in these companies. They are going to be earning returns potentially that otherwise would have come to the Government and to taxpayers.What we see here is that the Government instead of prioritising a legislation framework to deal with a serious problem that is affecting our most vulnerable families has found the time and resources to prioritise a policy that actually exacerbates the problem of wealth inequality in this country. These things are related. It is increasing inequality because of these types of policies that are aimed at protecting the wealth and privilege of the few and that lead to situations where families who are struggling to pay for essentials would potentially go and seek out some short-term relief going to some of these unscrupulous lenders who are deliberately targeting them and aggressively advertising to them and then those families are finding themselves in a situation of spiralling out-of-control debt from which they cannot recover. It is basically impossible when you get into a situation of being $70000 in debt if one already cannot meet one’s needs. It is extremely difficult to get out of that situation.It is interesting to see just what the Government actually prioritises. The Green Party stands for a clean green economy that works for all New Zealanders. The economy is just that. It is a tool that exists to serve humans. We do not exist to serve the economy. Our economic policy is based on a simple obvious recognition of the fact that the economy is but a small subset of human society and human society is a small subset of the natural environment. If we do not have a natural environment if we do not look after it and if we do not ensure that we have clean water and air a stable climate and safe food there is no economy. We are not achieving the goal of human well-being and we are not flourishing. Equally there is no economy if we do not have a functioning and fair society. So we cannot in the aim of supposedly increasing economic growth continue to trade off people and to trade off the rights of the most vulnerable people to be able to earn a decent living.Although we are finally seeing a very very important step being taken which is the introduction of a regulatory regime that is going to ensure that there is responsible lending and we welcome this it is within the overall policy context that is actually continuing to exacerbate the problem of inequality and that is not financially economically or socially sustainable. I look forward to examining the detail of this bill during the select committee process. I am very very interested in finding out exactly what those affected individuals in the community think. There has been significant consultation by the Government I believe of stakeholders thanks to the good work of the Ministry of Consumer Affairs up until now but it will be wonderful to be able to sit down and hear from the experts and hear from those affected most and to really delve into the detail and see whether there are any opportunities to improve the bill as it has been introduced.I can say that the Green Party welcomes this step. We are sorry that it took the Government so long to make it a priority. Ultimately within the context of an economic policy that is simply looking to erode the rights of workers and fails to put in a sensible capital gains tax we are going to continue to see increasing inequality. We are not going to see a rebalancing of the economy that would ensure that those who are themost vulnerable and who have the least are actually in a position where they are not going to be targeted by these predatory lenders. Thank you.