Bennett David: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Bennett David: Reserve Bank of New Zealand (Covered Bonds) Amendment Bill — First Reading 
[Sitting date: 22 May 2012. Volume:680;Page:2272. Text is incorporated into the Bound Volume.] 
DAVID BENNETT (National—Hamilton East) 
: 
 Thank you Mr Speaker— 
Hon John Banks 
: I feel a call coming on. 
DAVID BENNETT 
: Mr Banks just said he feels a call coming on so that would be interesting. This is a bill that tends to have the support of all members of the House at this stage which is very unusual. I think it is the first time the Green Party has actually voted with the Government— 
Kris Faafoi 
: Second time. 
DAVID BENNETT 
: Second time is it Kris? Well it is good on them and it is good to see them being positive about New Zealand’s future for once and supporting good moves made by a good Government in the best interests of the community. Even the New Zealand First Party the perennial knockers of the New Zealand public is voting for this bill as well so that is good to see. 
Hon John Banks 
: What happened? 
DAVID BENNETT 
: I do not know what has happened. They must be getting close to the Budget and wanting to be supportive of a good Budget that represents a good plan for a country going ahead. That is what I think is happening. They have seen the light. They have seen the brighter future and decided to be part of it.  
We are very fortunate to have the support of all parties in this House. I think it does represent the importance of the bill that parties do support it because a lot of people have lost a lot of money in the finance markets over the past few years and it is a very turbulent and delicate market at the moment with what is going on in Europe. So it is important that New Zealand has the best regulations that are possible to make sure that we secure the safety of that market for our banks our institutions our Reserve Bank our customers and our investors. This bill is an important part of doing that because it relates to something called covered bonds. Maybe that is the reason why we are getting New Zealand First and Green Party support for it—they like the idea of covered bonds; I do not know. It is something that the ordinary punter out there would not know of or have to deal with in their normal course of business but it is a tool used in our financial system. Most countries have structures around it. New Zealand does not so it is important that we do do so. It is important to give our financial system that security but it is also important for the simplicity and safety of investment in New Zealand.  
The covered bonds approach—I think there was one issue raised by Mr Cunliffe from the Labour Party in regard to it. He tended to look at the situation of covered bonds in a very extreme situation rather than taking into account the reality of how they are used. They are a device where the investors will know what they are getting into in the sense that it is a very well-used device around the world. There is that separate pool of assets called the cover pool—basically the unsecured creditors become secured over that base through taking a joint ownership in the risk on the bank. What we have done in this bill is we have clarified those situations and we have also put limitations on them so that they do not raise situations where there is an unusual amount of money that is invested through this process that would call into account the greatest ability of any institution.  
This is good legislation. It shows that the Government is proactive in looking after our financial sector so that we have a strong financial sector that enables the country to prosper and grow. It is pleasing to see the other parties in this House supporting it and hopefully that is a recognition that they see the importance of providing that stability to our financial sector going forward as well. So we look forward to it passing through the House.