Foss Craig: Reserve Bank of New Zealand Amendment Bill — First Reading 
Foss Craig: Reserve Bank of New Zealand Amendment Bill — First Reading 
[Volume:632;Page:4225] 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to the Reserve Bank of New Zealand Amendment Bill. As my colleague John Key pointed out earlier the National Party will be supporting this bill at least to go to the select committee because we support all good legislation that fits nicely with the future direction of New Zealand. I thank the previous speaker the chair of our Finance and Expenditure Committee. I noted that earlier on he sat in the Prime Minister’s seat in this House which was interesting and did not go unnoticed by members on this side. 
I need to give a quick lesson in economics perhaps to those who may be somewhat confused about various patsy questions that arise in the House and who wonder about the wisdom of tax cuts etc. Quite simply an analogy is a chequebook versus a balance sheet. If the balance sheet shows a surplus of about $8.5 billion then there is plenty of room for tax cuts to utilise those assets—to leverage off those assets to use the assets that have already been paid for—for future generations. If we have a only few dollars left in our current account in our chequebook then of course there is no room for tax cuts but as we have previously pointed out that balance can be whatever we choose it to be. It is just a mere timing issue. 
The bill has two parts. The first part amends the Reserve Bank of New Zealand Act 1989 and the second part amends the Racing Act 2003. It might surprise some perhaps that I would like to speak about the amendment to the Racing Act first. As race-going members of the public and the punters know the National Party has long been a great supporter of the racing industry in New Zealand—testimony to Lindsay Tisch’s hard work and formulation of policy in the 2005 election. There are allegations that our policy was cut and pasted off our website to one of the minor parties in the House. I am not sure whether that party is in or out of Government. But there is a key point to that and as the Minister alluded it is driven by the elimination of the 5c coin. Why does the bill state that any amounts must be rounded down and not up? For example if someone wins $1.29 on the races why does the bill dictate essentially that he or she should receive only $1.20? Why should that be? Perhaps it is a drafting error that will be addressed at the select committee or perhaps it is just typical of a Government that has no thought for the poor New Zealander who is struggling and who might spend a few dollars at the races. It is indicative of the Government’s approach to the few meagre dollars left in the hands of New Zealand punters and bettors at the races. The bill also incentivises account trading at the races versus cash. That is an interesting debate and perhaps is one that the wider society should have. 
But most of the debate on this bill will be around the amendments to the Reserve Bank of New Zealand Act of 1989 and I will refer to that part now. Yes as previous speakers have pointed out this bill is a lot better than the one originally proposed. The Australian Prudential Regulation Authority model was not a goer. I was very interested to hear Mr Key’s comments as to how this current proposal came about—and goodness gracious would it not be nice for New Zealand and Australian investors to have imputation streaming? Here we are talking about various tax bills etc. yet imputation credits with our nearest neighbour and greatest trading partner are not even on the agenda. Perhaps the wine served at the lodge that night was not very good. 
I was interested that Dr Cullen used the word “sovereignty” and I am glad he raised that point because there is much debate around the sovereignty of New Zealand at the moment. There is also a definite Australianisation of many things New Zealand. That is an inevitable case of the cross-pollination between our two countries and the investment between the two. That is fine but there has not actually been public debate around the issue. I heard a very good speech recently from someone alluding to this same point—to the Kiwi meeting the kangaroo—and this is another example of that. But much of the action be it in the area of food regulation pharmaceutical discussions etc. has all been done below the radar. 
There has been no great public debate about those matters and I find that quite surprising given that some recent changes proposed in New Zealand have been quite fundamental to the nature and make-up of New Zealand and New Zealand business. The structural changes that have gone through and those that are proposed will affect our country and our sovereignty for many many years to come. Most of them are irreversible. I am very surprised there has not been more debate around the issue. We can imagine the outcry if the New Zealand Rugby Union were to be regulated by the Australian Rugby Union. Yet here we are talking about the core balance sheet of New Zealand being merged and assimilated and moving closer to Australia. I am not saying that is a bad thing; the bad thing is the lack of debate around the issue. 
A previous speaker alluded to New Zealand becoming closer to Australia. Of course being a proud MP from Tukituki in the Hawke’s Bay I would have to bring up the issue of apples. We are becoming closer to Australia in the areas of communications legislation health legislation food legislation and regulation and—here we are—Reserve Bank legislation yet New Zealand apples still cannot get into Australia. Although I had a little fun about the earlier points—and I am sure a speaker from New Zealand First will stand up and speak about the racing industry—I also notice that part of New Zealand First’s confidence and supply agreement with the Government relates to New Zealand apples gaining access to Australia. I say “Godspeed!” to those gentlemen because it looks as though that is moving on to the horizon. I also look at the context as we examine this bill and say that we cannot have it both ways. As I mentioned New Zealand apples cannot get into Australia yet we have just taken honey from that country—and this debate is about making our financial regulation closer to Australia’s. 
Mr Key pointed out that there is already $59 billion of Australian investment in New Zealand. That is an absolutely phenomenal amount. It is about a quarter of the total foreign investment in New Zealand. About 20 percent of New Zealand’s exports go to Australia and most of our top sports teams are in various competitions jointly with Australian sports teams. Currently and in a similar vein there are discussions and a debate over a code-share between Air New Zealand and Qantas. The Westpac New Zealand Bill was alluded to in the House today. There are many many similar things going on and I stress again that we must have a greater debate on them. 
In the recent Budget money was allocated to the debate around national identity but the debate about New Zealand becoming closer to Australia was not even touched on. This bill is a natural progression of trading and in the Anzac spirit—or whatever we want to call it—of becoming closer to our mates. We have seen a similar model in Europe that has gone further with countries in the European Union aligning themselves. But goodness gracious as New Zealand becomes closer to Australia surely we would want our economy to be fighting fit so that we line up somewhere against New South Wales and Queensland not stacked in behind Tasmania somewhere. But sadly—and we all know the statistics at the moment—New Zealand’s gross average income is less than the Australian average net income. So as we become closer to Australia be it in the back office with regulation and process how on earth will New Zealand be able to go head to head as we do need to do to compete and go hard against Australia? 
To round up National will be supporting this bill going to a select committee. I look forward to working on it there with our hard-working fellow members—most of them turn up all the time. But I just note in the context of this debate that we need to address exactly where we want New Zealand to go in 10 15 or 20 years’ time because this bill starts to set the stage for New Zealand to be much much closer to Australia. Thank you.