Adams Amy: Westpac New Zealand Bill — First Reading 
Adams Amy: Westpac New Zealand Bill — First Reading 
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AMY ADAMS (National—Selwyn) 
: 
 I am very happy to rise this afternoon and take a call on the Westpac New Zealand Bill which is a private bill introduced by my friend and colleague Craig Foss who of course chairs the Finance and Expenditure Committee and does so very well. 
The events of the last 2 years have really brought into sharp focus the need for a robust and well-respected banking sector. Certainly in New Zealand one of the reasons we have come through—I certainly will not say “unscathed”—in a better position than a lot of countries is that as we have gone through these difficult times our banking system and our banks in particular have worked very well and have proven themselves to be institutions that New Zealanders can have faith in. Nothing is more important to a good system of financial markets in this country than for that to be the case. 
A big part of that system of course is the Reserve Bank and the role it plays as both the central bank and the prudential supervisor of the banks. I know that the Reserve Bank took the position some time back that it is in the best interests of New Zealand and New Zealand customers that banks that operate in New Zealand to such an extent that they play an important systemic role in our banking sector should largely operate as New Zealand - registered subsidiaries rather than as branches of offshore banks. That has certainly been the direction in which the Reserve Bank has encouraged banks to move. It is not unusual by any means for banks to have here both subsidiaries and branches of offshore entities. That is currently how Westpac operates and I understand it is one of four banks that do so. 
Westpac is one of our big banks in New Zealand and we need it to operate well and to be in a position where should there be an issue in the future the Reserve Bank has complete wraparound of the issues it needs to control as part of its regulatory oversight. For that reason we have had the Reserve Bank institute the liabilities cap which sets an amount beyond which the banks cannot rise while operating as branches of offshore entities. Although Westpac has certainly always traded within those requirements—and there is no question that it does not—this bill with the movement of the institutional banking sectors into Westpac New Zealand and away from the branch operations is really about ensuring that no matter what volatility is in the markets in years to come Westpac will be in no danger of stepping outside that cap. I know that Westpac has been talking with the Reserve Bank on that issue for many years and it is working with the Reserve Bank to that end. 
This bill is reasonably small in terms of its impact but it is symptomatic of a much wider issue that we work on in the banking sector with the Reserve Bank which is to ensure as I said that not only do we continue to have a strong and robust banking sector but also our Reserve Bank which does such a good job of prudential oversight has the ability and tools it needs to control all aspects of the banking operation should that be required. 
Looking through the bill I see that a couple of things are worth commenting on so that there is no confusion about the extent of the powers of the bill. There are specific provisions to ensure that customers’ relations are effectively seamlessly moved from one part of the institution to another. The big customers currently dealing with Westpac as a branch of the Australian company will move seamlessly through to being customers of Westpac New Zealand without any impact at all on them and similarly with the transfer of staff and the like. That is the reason a private bill is needed to achieve those changes and to ensure that we have that seamless transition. Other than a back-end reorganisation it will be business as usual for everyone who is dealing with Westpac. 
For anyone who is listening at home and perhaps is not quite aware of the ambit of the bill it is worth reiterating that the retail banking business—which includes the mums and dads and the people who use the branches and the eftpos cards—has for many years been encapsulated within Westpac New Zealand as a stand-alone company. Certainly there is no reason why that would change; it will not change. Only big-business customers dealing with the bank will be affected and even those customers will have their relationships entirely protected. 
The other thing worth noting in closing is that the actual transfer of assets—the specifics of what goes across—will be determined by Order in Council as has always been the case with such matters. 
It is a small and necessary bill. It is a step towards the entirely New Zealand - incorporated banking system that the Reserve Bank is very keen on and I am pleased to support it.