Young Jonathan: Estimates Debate — In Committee 
Young Jonathan: Estimates Debate — In Committee 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The Government’s overall economic goal is to build the foundations for a stronger economy that will provide New Zealanders with jobs higher incomes and improved living standards. Work under Vote Commerce directly contributes to this priority by helping to create dynamic and trusted markets increase the ease of doing business improve international linkages and develop enterprising and innovative businesses. It does this by ensuring that effective policy and regulatory frameworks are in place to promote competition support efficient business transactions lower compliance costs improve business confidence to make investments and give firms access to other markets. 
Improving confidence in capital markets is essential. Priority under Vote Commerce has been given to several areas of work designed to improve investors’ confidence and participation in New Zealand’s capital markets following the global financial crisis and the collapse of many financial companies here in New Zealand. 
Today in the House the Minister of Finance reported to us that New Zealanders have lost approximately $8.5 billion in collapsed finance companies. That is why investing in a minority shareholding in an energy company must look attractive sensible and sustainable for many New Zealanders who want a return but are gun-shy about taking a risk. 
We often refer to the “mum and dad investor”. This is essentially the investor who has a bit of spare cash being saved for retirement and who does not see investment as something that they are highly specialised in. Of course of equal importance has been the work of improving international linkages so that investment and financial activity can easily flow to and fro across the Tasman. 
The total appropriation for Vote Commerce has increased by 12 percent—$15.5 million—to a total of $141.43 million in 2011-12. The main change in the appropriation was due to the establishment of the Financial Markets Authority on 1 May 2011. I know that the Minister of Commerce is particularly pleased about the creation and the work of the Financial Markets Authority. It is clear that New Zealand needs a single market regulator with a visible proactive culture of timely enforcement. On too many occasions in finance company collapses we heard of investors’ money falling to the floor through gaps between regulators. 
The Financial Markets Authority—the FMA—is an independent Crown entity funded by Vote Commerce. It was established in 2011 replacing the Securities Commission. It commenced on 1 May. The Financial Markets Authority enforces securities financial reporting and company law as they apply to financial services and securities markets. The Financial Markets Authority also regulates securities exchanges financial advisers and brokers trustees and issuers including issuers of KiwiSaver and superannuation schemes. 
The Financial Markets Authority is playing a more proactive monitoring role than its forerunner the Securities Commission. The Financial Markets Authority is larger than the Securities Commission with more staff and resources in a new office in Auckland. The Financial Markets Authority is able to publicly enforce duties of issuers directors auditors trustees and others involved in financial markets when it is in the public interest to do so. This is a significant new provision that the Securities Commission did not have. The new powers were specifically requested by the Financial Markets Authority establishment board because of the gap it saw in the Financial Markets Authority’s ability to effectively enforce and supervise our financial markets. 
Coming out of the global financial crisis having improved protection for such investors it is imperative for such investors to have confidence investing in New Plymouth—sorry New Zealand as well as New Plymouth of course! We certainly need investment with many great opportunities there. Investment in New Zealand is very important and it is an incredibly important component to our financial recovery and growth. A substantial incentive for people to shift from a borrowing-based way of thinking to an investment-based way of thinking is that they have confidence in a regulatory framework that ensures professional effective ethical and accountable oversight to protect the interests of the investor. Thank you.