Smith Lockwood: Third Readings 
Smith Lockwood: Third Readings 
[Volume:634;Page:5726] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 It is worth reiterating in the interests of accuracy that this afternoon we are debating the third readings of in fact four bills: the Securities Amendment Bill the Securities Markets Amendment Bill the Takeovers Amendment Bill and the Fair Trading Amendment Bill. 
One of the interesting things in this third reading debate is that both sides of this House agree with the purpose of this legislation. The aim of the legislation—as I understand it from the work of the Commerce Committee—is to inspire confidence in New Zealand’s capital markets. When the Minister the Hon Lianne Dalziel spoke to the third reading just now she said that the aim of the legislation is to encourage investment in New Zealand’s financial markets. Naturally National supports those objectives and there are a number of measures in these four bills that National supports including issues relating to insider trading disclosure requirements for advisers and brokers enforcement procedures and the penalties associated with insider trading. National naturally supports those measures in this legislation. 
I take up from where my very very experienced colleague John Key left off. We in this Parliament have to understand—and members of the Government need to understand—that it is not just legislation that affects our capital markets and investment in this country. The legislation can be improved significantly and I believe this legislation we are debating this afternoon does improve our securities legislation. But the behaviour of the Government can have just as great an effect as the legislation if not greater. My colleague John Key mentioned the Government’s absolutely inept handling of the Telecom decisions—the decisions surrounding its decision to unbundle the local loop—and the profound impact that had on capital markets in New Zealand. Why would offshore investors look at investing in this country when they see a country where a Government is so ignorant of the realities of business investment that it does things that wipe $3 billion off one company? That company would obviously have had foreign shareholders in it. What are they going to do when they see a Government in New Zealand behave in that kind of way and just wipe $3 billion? 
 It is easy to say the words. It is easy to say “$3 billion”. I invite members to reflect on how much money that is—$3 billion is $3000 million. For every New Zealander that is many many dollars just wiped off our capital markets through the inept handling of a Government policy decision. This legislation does not save people from that kind of inept Government behaviour wiping billions off New Zealand’s capital markets. 
If that was an isolated incident maybe one could say that these things happen from time to time. But it was not. The way in which the Labour Government handled the Air New Zealand fiasco was an absolute disaster and showed the absolute incompetence of the Minister of Finance when it came to dealing with capital markets and major business in this country. It seemed to me to be Dr Michael Cullen’s personal decision not to accept the Singapore Airlines deal on Air New Zealand. He thought a better deal was out there somewhere and he kept Singapore Airlines at bay for weeks as the capital value of Air New Zealand plummeted. A lot of foreign investors had shareholdings in Ansett as part of the joint Air New Zealand - Ansett operation. I happened to be in Australia not long after that and I heard comments by Australian investors in Ansett asking what kind of mickey mouse markets and Government we had in New Zealand that would allow that kind of thing to happen. A tremendous highly respected international investor wanted to buy a greater shareholding in the Air New Zealand - Ansett conglomerate which would have saved the capital market value of that airline. Instead Dr Cullen said: “No no we don’t want that.” and caused massive loss of capital value. So there are two examples—the Telecom fiasco and the Air New Zealand fiasco—that just destroyed confidence in New Zealand’s capital markets. It has nothing to do with this legislation; it is the inept behaviour of this Government. 
Another example is the recent sacking of the electricity commissioner. The Government did not like the fact that the electricity commissioner had sufficient integrity not to be manipulated by this Government. We saw that happen to a former Commissioner of Police when Helen Clark first came to power. Helen Clark the new Prime Minister of New Zealand knew she could not manipulate Commissioner Peter Doone so she knifed him the back. And my word since then the performance of the New Zealand Police at least at a high level has caused many concerns around New Zealand in terms of some of the decision making in respect of the breaches of the law by this Labour Government. So we have that example too of when the Government’s behaviour has again lost confidence in our markets. Obviously the electricity market is hugely important but the Government just sacked the commissioner because it found that it could not manipulate him. 
Another very interesting case currently before this Parliament is the Government’s decisions on the taxation of international shares—international equities—by investors in New Zealand. That legislation will have a profound effect on our markets in this country. The select committee has already heard evidence in public—so I am not breaching any confidence—from major fund managers in New Zealand saying that if Labour not only goes ahead not just with the Taxation (Annual Rates Savings Investment and Miscellaneous Provisions) Bill as introduced into Parliament but also backs down on the international provisions and goes with the new provisions put in front of the select committee by way of a letter and a press statement from the Ministers then even with those changed provisions investment funds in New Zealand will go offshore to Australia. We have been told that already investment funds are going offshore to Australia. So even the good provisions in these bills cannot stop the lack of confidence in New Zealand’s investment and capital markets because of the ignorance and inept behaviour of this Labour Government. 
I want to come to another couple of matters. One of the bills that we are debating the third reading of this afternoon is the Fair Trading Amendment Bill. Where was the fair trading by the Labour Party when Helen Clark took taxpayers’ money to the tune of over half a million dollars to pay for its electioneering? That was a trading issue. Where was the fair trading? What is the use of having this kind of legislation in New Zealand when the Government sets an example by taking—I guess we are not allowed to use the word “stealing” but that is what it was—taxpayers’ money to pay for its election pledge card? 
Labour members say that it is OK because they did it at previous elections. I have been involved in this Parliament for 22 years. I do not know how many elections that is—about eight I think. It never entered my head during the 2002 election or the one before that Labour’s pledge card which was so central to its election campaigning was paid for by taxpayers. That thought never entered my head but on the day when the pledge card arrived in my letterbox at home last year I glanced at it and saw there was the parliamentary crest. Because the rules had changed to make matters more transparent Labour could not hide its spending and I saw that the New Zealand taxpayers had paid for that electioneering. My God! I was stunned. We are debating the Fair Trading Amendment Bill this afternoon but nothing about that theft of taxpayers’ money was fair trading.