Jones Shane: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — In Committee Third ReadingText is incorporated into the Bound VolumeJones Shane: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — In Committee Third Reading[Sitting date: 19 November 2013. Volume:695;Page:15015. Text is incorporated into the Bound Volume.]Hon SHANE JONES (Labour): Kia ora tātou. Mōrena. I stand to support my colleague here Dr David Clark. He and I were both at various points in our parliamentary history members of the Finance and Expenditure Committee and members of the Commerce Committee.I just want to focus a little on why the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill is necessary. In particular I want to remind us that it gives more confidence to the international providers of capital to New Zealand. The international capital providers want to ensure that when an adverse event takes place they have some recourse regarding their percentage of exposure and they are not completely unsecured but also having said that that their level of priority is not such that they monster everyone else or that they are left out to dry. This is important because it speaks to the notion of certainty. It speaks to the notion that when a financial entity seeks to raise capital it is then capable of taking a punt on how the regulatory framework will remain to the extent that its interests are if not protected then certainly able to enjoy a high level of priority.We are going into treacherous territory and I hope that this bill does compensate for the gross level of uncertainty that has recently crept in in respect of the speculative statements that are being made that the Commerce Act is likely to be changed. Once you start to change the regulatory framework at the whim or at the instigation of corporate welfare lobbyists such as those associated with Chorus it impacts rightthroughout the system—right throughout the system. Indeed it can have a systemic effect.That is why although we are going to support this bill it is absolutely essential that people bear in mind that when international financiers look at our economy they look at the Government. Then they look at the sense of whether or not a contract can be not only enforced but collected upon. Then they look at the institutions that a modern economy puts in place to ensure that all parties or stakeholders in a commercial equation have some level of protection. Let us just think about it. With international providers there are obvious disciplines around the financial entities—the banks. The fact that they do not pay enough tax is something that will be addressed at the end of next year when the National members sit over here and we on this side of the House sit over there. But at the moment that is another matter. The difficulty is how we continue to promote the positive story—although there is some upside with us agreeing to this bill—that regulatory frameworks will not be changed in some sort of capricious manner.What we must not do is allow the chair of a publicly listed company—now a shining example of the Government’s small business policy given that Chorus has lost 40 percent of its shareholder wealth so it probably now qualifies for a small business grant which is presumably what the Government has in mind in terms of corporate welfare. The deeper problem is that in order to rescue that particular entity we would then take the profound step of worsening uncertainty in terms of the commercial framework—the Commerce Act and the Commerce Commission. You may be thinking: “Well Mr Jones that pertains to what was formerly known as a large company. I think it is insolvent anyway according to the Prime Minister but the chair is a friend of mine.” But now that is starting to spread because when directors international lenders and international investors see that you can capriciously change the legal framework in terms of the commercial regulatory framework the cost of capital goes up.This bill is not going to overcome that problem. The cost of capital will go up. We have seen in here that the banks—and having known one or three clever roosters in the banks myself—can go and use these devices to raise capital at a lower level in the European bond markets. Let us hope they get their dollar assumptions right having had a bit of experience myself of that in the fishing industry. When the dollar does move against you it is not for the faint-hearted. The point I am making here is that these are sensible changes but unfortunately there is a larger threat. That threat pertains to the framework that is related to how commercial transactions and investors are dealt with. We will support the bill.The question was put that the amendments set out on Supplementary Order Paper 186 in the name of the Hon Bill English be agreed to.Amendments agreed to.Parts 1 and 2 schedule and clauses 1 to 3 as amended agreed to.Bill reported with amendment.Report adopted.