Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
[Volume:658;Page:7102] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to talk to the Anti-Money Laundering and Countering Financing of Terrorism Bill as well and to say— 
Jacqui Dean 
: That would be a change! 
Hon TREVOR MALLARD 
: Sorry? 
Jacqui Dean 
: That will make a change. 
Hon TREVOR MALLARD 
: There is a member over there whose name I have forgotten and I do not really understand what she was saying. The point that I will start off by making is that this bill as it is printed at the moment is substantially bigger than the one that was introduced to the House as a result of the many changes that had to be made because the bill was inadequate when it was introduced. Today we have had I think for the first time an explanation for the inadequacy of the advice stream that led to the very poor bill that was introduced. It was that the previous speaker John Hayes was in charge of the advice stream. He was in charge of the advice stream for a number of years which meant that the bill was unsatisfactory and that the compliance costs put on the banks would have been far too high. 
The bill was held back by my colleague Clayton Cosgrove because he was not satisfied that it was of sufficient quality to introduce to the House. It was introduced in the House by Simon Power who was described yesterday as a country solicitor by Don Brash I understand because of his lack of understanding of some matters. I think Don Brash was making a plea for Chris Finlayson to deal in future with the matters that Mr Power is currently dealing with. As a result of the poor quality of the bill the Foreign Affairs Defence and Trade Committee had a lot of work to do on it and I am not absolutely certain whether it did its work in the right direction. My colleagues on the committee all advise me that they did the right thing but I think it is fair enough at this stage to say the process they have gone through has still left me with a bit of doubt about the work that has been done around this bill. 
That is especially so around the definition of a “politically exposed person” because the effect of the change that was made by the select committee was to take Ministers of the Crown out of the category of politically exposed persons. One question I have is whether that move went in the right direction or in the wrong direction. Clearly members of the executive—and in particular one very politically exposed person opposite—are currently under investigation by the Auditor-General and financial questions are involved. Any consideration of the use of those funds appears to have been excluded by the changes that have been made to the bill unless a person travels overseas and there are reciprocal arrangements. 
John Hayes 
: That’s not how it works. 
Hon TREVOR MALLARD 
: I am sorry but the explanation that we received I think is that other countries are putting in place similar legislation to this bill and that politically exposed persons who travel overseas will be caught at that stage. We were told that just as Ministers who come from overseas to New Zealand will be caught by this legislation other countries are putting in place legislation like this. When Mr English travels to those countries he could well be caught under their equivalent legislation if the common approach to legislation that is being encouraged by the United Nations is picked up on. 
But my question is not only about whether the definition should be stopped in that particular way but is also about whether the bill should have gone further. I ask whether members of Parliament generally who have enough influence on legislation and on matters like this should be caught. There are a couple of examples around at the moment. I think that there has been quite a lot of speculation about Melissa Lee: about where the extra $100000 is currently sitting and whether it would be caught if it went offshore. A lot of us were expecting that the police report on Mr Bakshi would be available this week and there is a question of money being held offshore in that case. I would like my colleagues to give me some more explanation as they are dealing with this matter of whether this legislation would apply to someone who has an enormous influence over Ministers as a member of Parliament and a representative of a particular community. I ask why those funds just because they are held in rupees in India should not be caught under this legislation. I think that is a very real question. Therefore given the change that was made to tighten the definition I wonder whether some of our reputation might well have been placed at risk as a result of that. 
I want to make it clear that as a former New Zealand Minister an Associate Minister of Finance I went on occasions to the World Bank to the IMF and to the Asian Development Bank. The probity of New Zealand Ministers over a long period of time—and I can remember well back to Harry Lake Rob Muldoon and many Ministers since them—was never an issue and there has never been a question of personal corruption as far as a Minister is concerned. There has never been a doubt in the past and that is partly because of the integrity of the individuals. However much we disliked Ministers on occasion in the past and however much we disagreed with their policies there was no indication of money going into their pockets. As a result of that New Zealand’s international reputation has been good. We have been well regarded and because of that I am sure that the rates charged to the New Zealand Government on its international borrowing are lower than they would otherwise be. There is no corruption risk factor sitting in New Zealand. That is partly a result of our legislation but also partly because our Ministers not only have integrity but are seen to have financial integrity. They are seen to have it throughout their parliamentary careers. I think we value that highly in New Zealand and there is a degree of anxiety around that. 
So I invite Chris Carter or whoever follows me from the Government benches to talk about that. I think the member for Rotorua has had personal experience of being the international representative of a country that has had some dodgy financial arrangements. I would welcome his expertise and the advice that he is able to give to Bill English based on his personal experience as to how a country can improve and regain its reputation over a period of time after it has had problems in the past. I am not sure whether the member for Rotorua was part of the problem or part of the solution but I know that he knows quite a lot about the issue. We will be interested to hear from him about the details of the international matters in which he has some experience. I am sure that he will not have caused the problems in quite the same way that we are now seeing. 
The other area that I will focus on is the requirement for suspicious transaction reports. I make it clear that from my perspective we need to get a lot more transparency in this area including in the New Zealand Parliament. It is my view that the use of trusts by members of Parliament almost automatically creates distrust and suspicion because people ask why members are hiding things. I accept that there are a number of reasons for using trusts. As someone who is not infrequently the subject of litigation I can understand why people would put their assets if they have substantial assets in trusts. But we should at least let those trusts be transparent. The trusts should be— 
David Garrett 
: Is yours transparent? 
Hon TREVOR MALLARD 
: Yes absolutely. I do not have a trust; I have chosen not to have one. The point I am making is that members of Parliament and Ministers must be transparent if we are to regain some of the international integrity that we have had. We have always been seen as the least or second-least corrupt country in the world. Not only do we have to pass this legislation but also we have to have a Minister of Finance who is perceived to be clean.