Bennett David: Keep Kiwibank Bill — First ReadingText is incorporated into the Bound VolumeBennett David: Keep Kiwibank Bill — First Reading[Sitting date: 14 October 2015. Volume:709;Page:7262. Text is incorporated into the Bound Volume.]DAVID BENNETT (National—Hamilton East): It is a great pleasure to speak on the Keep Kiwibank Bill. I think the first thing we need to look at is the role that Kiwibank plays. Kiwibank is part of the New Zealand Post Group which is a State-owned enterprise. As a State-owned enterprise New Zealand Post has its own board—and that board as we have heard mentioned has some members on it who have had political experience. But the board essentially is the governance body for that organisation of New Zealand Post. The board of New Zealand Post makes the governance decisions in relation to things like Kiwibank as one of its subsidiaries. So Ministers of the Crown themselves do not exactly direct State-owned enterprise operations in the day-to-day sense. That is done through the management of the organisations but also the board has the governance role not the actual Ministers who are the shareholding Ministers.So effectively under the current structure of that organisation the board has the ability to wholly or partly divest part of its asset in Kiwibank as the member who has raised this bill has made known. So that is one point that we need to be aware of. Another point is that the member is requesting a 75 percent threshold of MPs or a referendum to essentially allow any transfer wholly or in part of that organisation. I think the important part to look at there is what consistency or any precedent there may be for that approach. It is very difficult to find any precedent in New Zealand law that has that 75 percent requirement. I guess if you were looking at this legislation and taking it to its full effect then what would happen with the organisation the member just mentioned Solid Energy for example? Should that also then have a 75 percent rule? Should KiwiRail have a 75 percent rule? Should some of the other State-owned enterprises have a 75 percent rule? Some members of the Labour Party are nodding but that is not what this bill does.So the question is whether that would apply to everything. Even if it did not apply to all those State-owned enterprises there may be a list that those members want to have a 75 percent rule with and there may be a list that they do not. There is a lack of consistency there and I think members of the public would be very interested to find out why this State-owned enterprise subsidiary is seen as any different from Solid Energy or from—Hon Clayton Cosgrove: Solid Energy is history. Solid Energy doesn’t exist.DAVID BENNETT: It may be history but the thing is that the 75 percent rule is only being asked to be applied to one organisation. What about something like KiwiRail? Would the 75 percent rule be applied to them? Is that what the member wants as well? If he does not then that would create an inconsistency in legislation that I am sure members of the public would not want to see this Parliament have as an inconsistency in the way things are done.Then there are also the impacts of the bill. One of the big things with a bank is there is always the potential for a bank to run into difficulties. We have seen that in the past with things like the BNZ. When a bank gets into difficulties under the rules that have been set by this legislation there could be some quite difficult time frames involved. For example if a bank ran into difficulties and then you had to have a referendum that would take a matter of months and that would not be enough time for a bank to survive if it was in a matter of difficulty. Also if Parliament was not sitting—for example if this bank got into trouble in December and Parliament was not coming back until February what would happen then for those 2 months? The bank would essentially have a run on funds and go under and there would be no recompense. Basically the Crown would have to take that debt in the end. That would be an issue that would have to be considered.We understand what this member is trying to do here but there are some issues that you have to take into account. The first one is that New Zealand Post itself has its board. It has its own governance approach and it is not for Ministers to get involved in and direct that on a day-to-day basis. The second thing is that you need some consistency. There is some inconsistency in the treatment of other State-owned enterprises especially some organisations like KiwiRail. I just do not know why Opposition members feel that they value Kiwibank more than KiwiRail for example and will have this rule around Kiwibank but not around KiwiRail. They need to work through that inconsistency which sends the wrong message to corporate New Zealand or the State-owned enterprises in New Zealand as a particular whole.Then you have got that third issue: if there are any problems with the bank and the bank is required to meet certain capital funding regulations from the Reserve Bank and it relies on the market to do that. If it was unable to access to the market because there was a hamstring on its ability to make decisions or its ability to be able to direct itself to meet the needs that that organisation might have if it ever got into difficulty then that could be a compromising situation for the Parliament but also for the members who are in that bank. Also it could compromise parts of our banking system which nobody wants to do.So I think when we look at this bill it may be seen as somewhat simplistic in approaching just one part of one State-owned enterprise but there are many follow-on effects. I look at those follow-on effects for the whole banking system. If a bank like Kiwibank did get into trouble and did fail that is a big part of our banking system and you would not want to have that follow-on effect. If there is no ability for decisions to be made how would that have an effect? There is no ability for decisions to be made because you would have to wait for Parliament to resume to do that or you would have to do a referendum. A referendum is quite a time-consuming process. So those are the decisions that would be very difficult if there was a problem with capital raising or funding of the regulatory requirements of the bank.This is an interesting bill in the sense that it has a particular bent to it. I think that as a Parliament we need to consider these kinds of bills in a very open way but also consider what the implications actually are for other parts of the State sector and the State Service. In this case there are some real issues around consistency. It would be creating a precedent around a 75 percent vote which has not been used in this Parliament for a long time if ever. That would create an element of inconsistency with other laws which would be an issue that would have to be considered. And then you have got the flow-on effects—should anything go wrong with the bank how that would actually be dealt with in that sense. So I look forward to further discussion on this bill. Thank you.