Hayes John: Non-bank Deposit Takers Bill — Second Reading 
Text is incorporated into the Bound Volume 
Hayes John: Non-bank Deposit Takers Bill — Second Reading 
[Sitting date: 02 August 2012. Volume:682;Page:4261. Text is incorporated into the Bound Volume.] 
JOHN HAYES (National—Wairarapa) 
: 
 It is quite interesting to reflect that on the right-hand side of the House as I stand here there has not been a speaker this afternoon on this bill the Non-bank Deposit Takers Bill who is not a list member of Parliament. I sat there listening to what they were saying. What I perceived was a disconnect from the community that electorate MPs represent and a detachment from the community in New Zealand that those other members purport to represent. I would simply say to the last speaker Andrew Williams that I am deeply disappointed that Winston Peters was not available to take a slot this afternoon because he made a really tremendous contribution to the development of this legislation and I do not recall the last speaker being on the Finance and Expenditure Committee that was discussing this subject at all. 
Particularly I felt that the last speaker misunderstood the intent and the value of the legislation when he said that its most desirable quality was the bank being able to dismiss directors. The point of this legislation is that it enables the bank to vet directors before they arrive. That is a much more important point because we are trying to stop people getting into the House before we run into trouble. Nothing as an MP in the last 7 years has caused me greater anguish than listening to people in my community who have come into my office and said “I’ve lost my life savings because I took advice from people like Money Managers - Masterton.” and their whole retirement savings have been lost. That is something that I felt very deeply about and I am very pleased that our Government has been able to bring this legislation to Parliament and process it through the Finance and Expenditure Committee in relatively very fast time. 
I think that Mr Parker was also critical of the pace at which the economy is moving but I draw his attention to a document that I noticed this afternoon in Copperfields. It comes from the Parliamentary Library. It is a research paper and it sets out trends in the economy. It points out that economic growth is averaging 1.7 percent in 2010-11 and 2011-12 and goes on to say: “The rate of economic growth in the March 2012 quarter exceeded expectations with the economy expanding by 1.1 percent over the quarter. The main contributors to growth came from manufacturing business services and agricultural industries.” Those are all things that employ people in this economy. If you look at unemployment it is consistent at around 6.6 to 6.7 percent. If you look at inflation it has dropped from 4.5 percent to 1.6 percent. If you look at interest rates they have dropped from 2.65 percent in 2010-11 to 2.61 percent in 2011-12. 
Hon Clayton Cosgrove 
: How many people are leaving New Zealand? How many people are going to Oz? 
JOHN HAYES 
: When we come to the list member for Christchurch or wherever it is—he used to be an electorate member of Parliament but his electorate tipped him out. Mr Cosgrove I think his name is. Why did they tip him out? Because as Associate Minister of Finance he was responsible for losing $7 billion of taxpayers’ money. That is why they got rid of him. 
This bill is another step in the Government’s programme to restore investor confidence in capital markets. That is what this bill is about. In the context of the global financial crisis and the collapse of finance companies this bill at least enables the Reserve Bank to have much stronger powers to deal with the non-bank deposit taking sector—that is anybody who is not a bank. The Non-bank Deposit Takers Bill completes several years of work to tighten up the regulations of the sector. From 2006 deposits of about $8.6 billion were put at risk by finance industry failures. Some of the directors are actually in my electorate and I know them personally. I know they tried to do a good job but they did not and so a key focus of the Government over the past 3½ years has been supporting measures to ensure the right protections are in place to maintain and build investor confidence. 
So what have we done? We have established a one-stop shop Financial Markets Authority with a sharper focus on enforcing the law. We have tightened up oversight of those working in the financial markets sector by putting in a new regime for financial advisers requiring licensing of trustees and auditors and strengthening disclosure requirements. We have rewritten the 33-year-old securities law leading to the Financial Markets Conduct Bill. We are working on improving financial literacy. We are cracking down on loan sharks and we are combating anti-competitive behaviour such as price fixing. 
The bill requires non-bank deposit takers to be licensed by the Reserve Bank when deciding whether to grant a licence and the bank is required to satisfy itself that an applicant can comply with the sorts of prudential requirements that you would require of a trading bank. All directors must be suitably vetted in advance by the Reserve Bank and I think that by doing that we will eliminate a whole lot of people from the governance structures of financial markets who are beyond their competence to be involved with. I think the bill also will allow the Reserve Bank to delicense non-bank deposit takers in prescribed situations. 
I think this is a particularly good piece of legislation. It is really important for people in my electorate my constituents who want to invest their money safely without risk of losing it. And with that view I support this bill unreservedly. Thank you.