Cunliffe David: Reserve Bank of New Zealand Amendment Bill — Second Reading 
Cunliffe David: Reserve Bank of New Zealand Amendment Bill — Second Reading 
[Volume:634;Page:5958] 
Hon DAVID CUNLIFFE (Minister of Immigration)  
on behalf of the 
 Minister of Finance 
: I move  
That the Reserve Bank of New Zealand Amendment Bill be now read a second time 
. This is an omnibus bill that will amend two Acts the Reserve Bank of New Zealand Act of 1989 and the Racing Act of 2003. The amendments to the Reserve Bank of New Zealand Act are a significant step in the trans-Tasman single economic market agenda. They will promote trans-Tasman cooperation on banking regulation which is important given that Australia and New Zealand have banking markets that are among the most highly integrated in the world. 
The bill implements the recommendations of the Trans-Tasman Council on Banking Supervision which was established in 2005. The Governments of both countries agreed to make the legislative changes that are necessary in order to implement the council’s recommendations. I am pleased to report that since this bill was introduced in June reciprocal legislation of almost identical effect has been introduced to the Senate in Australia. The bill and its Australian equivalent should reduce the compliance costs of banks with trans-Tasman operations and assist in the maintenance of financial stability in both countries. The bill will require the Reserve Bank in its prudential supervision role to support prescribed Australian financial authorities such as the Australian Prudential Regulation Authority in the performance of its statutory responsibilities for financial stability and prudential regulation in Australia. 
The Finance and Expenditure Committee has considered the bill and recommended two amendments in order to better align the bill with the Australian equivalent legislation. The first amendment modifies the duty upon the Reserve Bank to support its Australian counterparts by aligning the drafting with the equivalent Australian legislation. “Support” is intended to have its ordinary meaning and in practice will require the Reserve Bank and the Australian Prudential Regulation Authority to support each other in ways such as providing and sharing information cooperation on policy development and coordination on matters of common interest particularly crisis preparation and management. The second amendment adds a new clause that will provide that no action taken by the statutory manager will be invalid by reason of the failure of that statutory manager to comply with its duty to consult the Reserve Bank where it has undertaken an action that is likely to have detrimental effect on financial stability in Australia. The Australian legislation has a similar clause. 
Part 2 of the bill amends the Racing Act by delegating the responsibility for rounding dividends to the New Zealand Racing Board. The board will be required to make betting rules that specify the denomination to which dividends must be rounded and paid out. The committee has not recommended any changes to the amendments proposed to that Act. 
It remains for me to thank the members of the Finance and Expenditure Committee for their hard work in considering this bill. I commend the bill to the House.