Dalziel Lianne: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Dalziel Lianne: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
[Sitting date: 22 June 2010. Volume:664;Page:11972. Text is incorporated into the Bound Volume.] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 It is becoming increasingly frustrating to those of us who would like to have some answers from the Minister in the chair the Hon Pansy Wong placed on the record of the House. It is important that the questions that were raised post the report back are answered. We have had a truncated process. We have had really good progress in the Commerce Committee and it has been ruined by the Committee stage where I do not think we are being treated fairly. We need to have answers to those questions because this is the last time that those questions can be addressed. 
I have asked reasonable questions I believe. They were submitted to the Minister of Commerce on Monday by the representatives of Farmers Trading TaxiCharge New Zealand the New Zealand Taxi Federation and Telecom. The questions are about those parties that are not contemplated to be covered by the legislation. All we need is a very clear statement in the Committee from the Minister that the issues in Part A of the email are addressed and also the questions in Part B which are new to me. They certainly are not the ones that I recall being raised at the select committee. I do not really mind how the Minister deals with them whether they are addressed by amendment or by way of explanation but it is important that they are dealt with. This is the last chance to get the legislation into its final technical form for the third reading later this morning. I do not want the Committee stage to go through until this afternoon which is the alternative. We can just keep taking calls until we get the answers. 
The second issue I will raise which I have not spent any time on is the qualifying financial entity model. When I was the Minister of Commerce we designed the qualifying financial entity model in order to provide a structure of responsibility that would sit around those who were employees and also—as this legislation highlights—those who are nominated representatives of the qualifying financial entities. The way it was designed to be structured was that if people were advising in the category 1 space only for products of their own and otherwise advising generally in the category 2 space then they would not have to be individually authorised as financial advisers. 
A number of the banks came to see us at the select committee and they put a tremendous amount of effort into helping us get this legislation right. One of the influences at the select committee was that we kept coming back to the essential question of what the risk was that we were trying to address. One banking case was outstanding and that ruined it for the rest of the banks. Here is the front page of the  
New Zealand Herald 
 this morning as we debate in the Committee stage and final stages of this bill: “$45 million: Investors win record fair trading payout for misleading claims”. This was the advice that we had received at our committee over and over again. People were duped into believing that the risk they were confronting was nowhere near the level of risk that was actually being imposed on them. They were told in many instances that it was as safe as keeping the money in the bank. 
I think that ANZ has let the side down as it were in terms of the banking industry. The banking industry in New Zealand has come out virtually unscathed from the global financial crisis in terms of what has happened with the deregulation of the industry in the international environment because here it was very well prudentially supervised by the Reserve Bank with very strict rules around it. Of course those prudential rules now apply to the non-bank deposit sector. No we did not apply those rules in time but I do not know how one could have applied something in time when one was starting the consultation process on the provisions for the non-bank deposit takers and the review of financial products and providers only in the year that the first three collapses occurred and when one had announced the result of the Cabinet decisions on those matters 1 month before Bridgecorp collapsed. You know I must have been the unluckiest Minister in history I guess to have held the portfolio at that time. But I think it is unreasonable to play the blame game and actually nobody has really done that. 
The previous Labour Government inherited a regulatory wasteland. It took us a long time to put lots of regulation in place and we made a lot of regulations in the financial sector. When it came to the crunch both parties in the House agreed to work together and that is the way we have proceeded. We proceeded that way when we were in Government. We had a letter from the now Prime Minister of New Zealand addressed to the then Prime Minister of New Zealand offering that support. I think that it is not necessary to play the blame game because both of the main parties are responsible as regulators in the parliamentary sense for getting this right and I think that they have worked very well together in order to improve the legislation. 
The qualifying financial entity model was designed to provide a true incentive for organisations to take full responsibility for the training and delivery of financial advice at an institutional level that is appropriate to the needs of customers. We have all sorts of protections written into the law but essentially a qualifying financial entity risks losing its status as a qualifying financial entity if it gets it wrong. I think that is an incredibly powerful incentive and that is why I was very much in favour of finding a mechanism to ensure that the banks and other institutions could take responsibility for what they were doing on the job when it was their own product. We said no to outside products and I think we said no to outside products for a good reason. The headline news in the  
New Zealand Herald 
 is an example of that very good reason. I think there is a risk when we have part-branded products as with the ING (NZ) product from ANZ. We have the real risk that the people who are telling people what to do with their money do not see the degree of risk that those people are actually confronting. 
I would like the Minister in the chair—I am getting a bit depressed about this now—to answer some of my questions. I do so genuinely because it is not a question of satisfying me in my position as chair of the select committee. We have referred the bill back to the House. We have done our work at the select committee. But given that we have virtually rewritten every single clause of the bill if people are still raising some concerns since the report back then this is the right place and the right time to raise them. If the Minister could just read into the record what the answers to those questions are it means that we know where we are going in terms of the future and it means that those who have raised the concerns will know that they have been heard and responded to by the Government. As I said I have read into the record what I understand to be the case in respect of one of those questions but other questions still remain unanswered. I think it is very important that we have those questions answered at this last opportunity before the legislation moves into its third reading where we will be unable to correct it any further. 
That is a reasonable summary of where I am up to. I am not saying that this will be my last call; I actually hope that it is. I hope that the Minister is able to provide us with the advice that I am seeking on behalf of others. I am getting a warm indication that some work is going on that will assist the Committee in the progress of this bill and I am well pleased to see that. Thank you.