Smith Lockwood: New Zealand Guardian Trust Company Amendment Bill — Second Reading Third Reading 
Smith Lockwood: New Zealand Guardian Trust Company Amendment Bill — Second Reading Third Reading 
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Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Let me make clear at the outset that the National Opposition will be supporting the New Zealand Guardian Trust Company Amendment Bill. I have to say that it is good that Labour is at last seeing some sense in this legislation. As the Minister Judith Tizard just told the House this is the third time in 7 years that the New Zealand Guardian Trust Co. has had to come to Parliament to get its 1982 Act amended to cover the circumstances of a change of parent company. 
The last time this legislation was in front of Parliament National members—and there may well have been members from some other smaller parties as well—tried to get a change in the New Zealand Guardian Trust Co. legislation to enable future changes of parent companies to be made by Order in Council. If I look back at the Commerce Committee report on the bill of 2005—when the New Zealand Guardian Trust Co. was last in front of this Parliament having this kind of change considered—I see that the National Party had a minority view in the report. It stated: “The National Party supports the proposal to approve a new parent company by Order in Council and is disappointed with the decision of the committee in not supporting this initiative.” 
So there we have it. The last time the New Zealand Guardian Trust Co. was in front of Parliament with a private bill on this issue Labour refused to do the sensible thing. So here we are today spending more of Parliament’s time on one of these amendments to the legislation to provide for a change in the parent company of the New Zealand Guardian Trust. 
It is good that this legislation is going through and I am pleased that the Parliament is dealing promptly with it today because I think on one of the three occasions in the last 7 years when the Guardian Trust was in front of Parliament the legislation took 18 months to get through the process. At least it is being dealt with more quickly this time and we can look to the future with the Order in Council process. This process is not just a rubber stamp; the Minister of Justice will be involved. The provision in the legislation requires the Minister of Justice to consult the Minister of Commerce on the matter so there are appropriate safeguards if you like for the beneficiaries of the trust. 
As the Minister explained the New Zealand Guardian Trust Co. was formed in 1982 through the merger of the trust department of the New Zealand Insurance Co. Ltd and the South British Guardian Trust Co. Of course the current Act for the Guardian Trust states that the Promina Group is the parent company. The Act has to do that. In New Zealand trust law if a trust company conducts business with a related company and pays itself for doing that business it would be outside our trust laws because these trust administrators cannot gain—they are not allowed to profit—from the administration of their own trust. So we have to provide in law—in the legislation that provides for these trust companies—the ability for trust companies to trade or conduct business with their own parent companies and associated subsidiaries because they can actually give benefit to their beneficiaries through being able to do that. 
That is why we have these provisions in the legislation but it is crazy that each time the parent company changes the trust has to come back to Parliament to get approval for that. In fact as we look at this particular case—the Promina Group being taken over by Suncorp-Metway—it is a very major company that has now become the parent company. Suncorp-Metway has I think a market capitalisation of $19 billion. It is a very very major financial institution. I think there is absolutely no risk in respect of the beneficiaries of the trusts that are administered by the New Zealand Guardian Trust Co. 
The Finance and Expenditure Committee looked at whether it would be possible to pass some generic legislation that would provide for this Order in Council process for a change of parent company for all the trust companies caught up in similar provisions as the New Zealand Guardian Trust Co. In fact when we had a look at this we found that there are actually four trust companies in New Zealand that have these specific Acts of Parliament: the New Zealand Guardian Trust Co. Ltd; the Trustees Executors Ltd which was formerly called TOWER Trust; Perpetual Trust Ltd and PGG Trust Ltd which operate together; and the New Zealand Permanent Trustees Co. Ltd. Those four companies have these kinds of specific pieces of legislation. 
We were advised at select committee that one of these four—the Trustees Executors Ltd formerly TOWER Trust—already has in its legislation an Order in Council provision similar to that going into this New Zealand Guardian Trust Co. legislation. One of the four already has the Order in Council process so it does not have to come back to Parliament. The New Zealand Guardian Trust Co. once we pass this legislation will have the Order in Council provision so it will not have to come back to Parliament. That leaves just two of the four trust companies. One of them I gather is largely Government-owned so it is not likely to have its parent company change. That leaves only one trust company. It may well be that this Parliament will yet have to address a further private bill should the parent company of that trust change. 
I think Parliament is doing the sensible thing this time. It is a shame this was not done in 2005. When the New Zealand Guardian Trust was last in front of Parliament National recommended this change. The National members of the Commerce Committee actually recorded a minority view following the select committee consideration arguing that it should be an Order in Council process and it is good that Labour has finally agreed. The Order in Council process is robust. It does not leave beneficiaries of the trust at risk. 
I am pleased that this legislation now means that the New Zealand Guardian Trust Co. will not have to go to that huge expense or that time. Members should not forget that this bill not only changes the name of the parent company but actually validates the transactions that have taken place between the new parent company Suncorp-Metway and the New Zealand Guardian Trust Co. since May 2007. There have been 9 months of transactions that the bill validates since May last year when the change in parent company actually happened. 
All in all this is good legislation. National is pleased that the bill has the Order in Council provision. We will not have to address this for the New Zealand Guardian Trust Co. in the future and that is why National is supporting the bill.