Faafoi KrisHon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Can I acknowledge Stuart Smith the member who has just resumed his seat and congratulate him and put him out of his misery—we will be supporting the bill as we have—[Interruption] You looked like you were a bit worried Mr Smith but I acknowledge and congratulate you for getting this bill to this stage. I think members' bills can be used in a number of different ways. You can put one in the biscuit tin purely to get a headline knowing that the bill will fail but Mr Smith has chosen an issue which might not necessarily be on the top of mind of most New Zealanders but has managed to get the bill to the third reading stage and will be passed. So I acknowledge that and congratulate him for his work. I believe the bill was pulled out of the biscuit tin well over a year ago but even though we've had a transition of Government Parliament has seen fit to continue the work put forward by Mr Smith. So I congratulate him for that as well.I also want to acknowledge some of the work done in and around the select committee table—the Finance and Expenditure Committee. I understand that my colleague Duncan Webb has done quite a lot of work with Mr Smith ironing out some issues that made their way to the select committee during the select committee stage. So this is one of those opportunities where both sides of the House can work together to make sure we get a good outcome. I also acknowledge some of the leadership shown by Co-op Money NZ in promoting the reforms contained in the bill that will be passed today.Some of the issues that were looked at the select committee include making changes which will make it absolutely clear as Mr Smith has said that the core credit union principle of mutuality is being fully retained and I congratulate the select committee for their work there. The bill will amend the Friendly Societies and Credit Unions Act 1982. As Mr Smith has said the Act is outdated and inflexible and although there have been ad hoc amendments the Act has not been modernised to reflect the huge changes to the social and business environment that credit unions operate in. Thirty-five years ago credit unions were managed by enthusiastic volunteers who are committed to core credit union principles such as mutuality along with people helping people" philosophies. They retain those philosophies but they are now managed much more professionally. In that environment back in the 1980s I understand that at its peak there were a little over 300 credit unions in 1983 but we understand there are only 13 today. However the total assets under the control of the credit unions has been concentrated and quadrupled in real terms over the same period of time to more than $1 billion so it is not insignificant and the average credit union today is about 80 times larger than they were in 1983.The bill does make a number of important changes that place credit unions in a much stronger position to meet the banking services needs of their members and to expand their membership. The bill will provide credit unions with a legal personality and I know that not all credit unions supported this change. However as reported in a Law Commission paper in 2011 the law that governs unincorporated entities is unclear and uncertain and it is essential to remove these uncertainties from the credit unions for the benefit of their members and to protect the interests of third parties who will be able to transact with credit unions in good faith from now on.In terms of loans to businesses at present credit unions need to go through a cumbersome process in order for loans to be made to businesses associated with members of the credit union. They first must lend the money to the member who then on-loans to the business and the bill will avoid the need for that two-step process in the future. There were some issues I've been told around the details of those changes. However Mr Smith and Mr Duncan managed to work through those changes through the select committee and those changes would not have changed the credit unions' membership focus.The bill will also provide welcome clarity about the objects and powers of associations of credit unions and those were addressed in a High Court decision in late 2017 which has obviously helped clarify this and the bill will make this much clearer as well. The bill also confirms the general direction of the High Court decision by making it clear that credit unions can provide services to associate members and non-member entities as long as their rules provide for that and I'm sure that will happen pretty fast as a result of this bill.The journey is not quite over yet though. The next step for credit unions will be to apply to their Registrar of Friendly Societies and Credit Unions for incorporation and once that transitional period is over credit unions will be able to move forward with confidence and certainty. The reforms in this bill as Mr Smith has said are long overdue. They do provide a strong platform for credit unions to be more effective providers of banking services for years if not decades hopefully to come and this is particularly so with areas that credit unions have traditionally operated in such as providing banking services to individuals who are unable to obtain those services from registered banks.Just before I finish up the ability for the credit unions to move into this space as has been already mentioned in this debate will allow them to essentially compete on even terms with the likes of the big banks. Some of this legislation has held them back and there are opportunities in terms of technology that are available to banks and now hopefully credit unions which hopefully now they will now be able to take much more advantage of.I think this will take them from what they used to be back in the 1980s—being community-based organisations and obviously they're being professionally managed now—to be able to take that further step having the shackles of the old legislation taken off and then to be able to be motivated to move into the areas of technology that other banks are moving into as well. I hope that that is a challenge that they take up to offer to their members who obviously aren't motivated enough to be a customer of one of the main banks and have done that for reasons that they know themselves.I know Mr Smith is still in the Chamber so I'd like to congratulate him once again for the effort he has put in over a long period of time. Again I acknowledge the work and cooperation he had around the Finance and Expenditure Committee as well to get to the stage where this bill—Andrew Bayly: Three more minutes.Hon KRIS FAAFOI: I'm waiting for your dulcet tones at some stage Mr Bayly but it won't be as good as Mr Smith's I can tell you that. So on that note—because Mr Bayly probably wants me to be quiet—I say that we look forward to this bill passing through the House."