Chauvel Charles: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
Chauvel Charles: Crown Retail Deposit Guarantee Scheme Bill — First Reading Second Reading In Committee 
[Volume:657;Page:6101] 
CHARLES CHAUVEL (Labour) 
: 
 Mr Chairman— 
Craig Foss 
: Turn that tie down member! 
CHARLES CHAUVEL 
: I am glad that members opposite particularly Mr Foss enjoy my tie and long may that enjoyment last. This bill is about promoting financial stability and confidence in the banking system. As the chairman of the Finance and Expenditure Committee in the last year or so of the last Parliament I was very proud to have contributed to that aim along with one or two members opposite in serving on that committee. I take a moment to remind members that Labour had actually established a work stream in this area to support some really active quality regulation networks to establish an environment that supported business growth and innovation and ensure that New Zealand was a good place to invest and do business. 
In particular I recall three pieces of legislation that we saw through the Finance and Expenditure Committee and those were the Financial Service Providers (Registration and Dispute Resolution) Act 2008 the Financial Advisers Act 2008 and the Reserve Bank Amendment Act 2008. The main requirements arising from that legislation as many who are present in the Chamber tonight will know were the registration of all financial service providers; to provide a means of identifying and monitoring financial service providers; to introduce prudential supervision by the Reserve Bank of non-bank deposit takers; to introduce regulation by the Securities Commission of financial advisers; to encourage professionalism and public confidence in the sector; and to provide for comprehensive consumer dispute resolution and redress mechanisms. They were important measures. 
My colleague and friend David Cunliffe has just spoken about the banking inquiry which was another measure that was spearheaded by Labour to really try to build some confidence in the system. I think it is fair to say that that inquiry demonstrates that Labour really is listening to New Zealanders’ concerns about the banking system in a fundamental way. 
Paul Quinn 
: Is this what you learnt on the bus trip? 
CHARLES CHAUVEL 
: That is why that inquiry was launched along with the support of the Greens and the Progressive party so that we could take a good look I say to Mr Quinn at what was really going on in our banking system onshore. The inquiry was one that as Mr Cunliffe said the Beehive was absolutely desperate to stop. It required National MPs including Mr Foss over there to vote against their own motion at the Finance and Expenditure Committee. It tried to shut down participation at that inquiry. I would like to join with Mr Cunliffe and ask the Minister of Finance to take a call and assure the Committee that neither he nor his staff or supporters made any calls to try to shut down that inquiry. But we will not hear from him. We know that. We have heard only one call on Part 1 so far. Never mind that this legislation is not being referred to a select committee and being put through the sort of scrutiny it should have. Just like in the banking inquiry National has shown that when the chips are down it will always side with the interests of the big banks over the needs of hard-working Kiwis and working families as well as small businesses that are starved of capital and made to pay ridiculous amounts of interest for that capital. 
The inquiry received around 50 submissions and a dozen substantive oral presentations of hearings including those from Kiwibank and business groups like Federated Farmers the Employers and Manufacturers Association and the Manufacturers and Exporters Association. National’s attempt to suppress that inquiry absolutely failed. The key issues that emerged in that inquiry and will not be addressed at all by this legislation included strong evidence that consumers businesses and farmers have been overcharged by interest on short-term loans. There is a cross-subsidy between medium and long-term mortgages contributing to a new housing cycle that will be disastrous for this economy and there are huge issues around the growing national debt. 
Now 140 percent of GDP resulting largely from property loans channelled through the banking system was evidence that the Finance and Expenditure Committee also heard in its inquiry into the monetary system last year and this Parliament still does not do anything about it in this legislation or otherwise. It will be good to see the team from that banking inquiry doing follow-up research to report in late October. I think a high-quality report will no doubt be produced following some international peer review. That is the sort of quality process we will see from that review.