Collins JudithHon JUDITH COLLINS (National—Papakura): Thank you Mr Speaker. I'm happy to support this bill and as the chair of the Regulations Review Committee I of course look forward to—Hon Rachel Brooking: Oh a great committee—great committee. Hon JUDITH COLLINS: It is a great speech thank you. Hon Rachel Brooking: It's a great committee—great committee. Hon JUDITH COLLINS: A great committee—yes it is that too and we have a lot of cross-party support for everything on the committee normally. The reason that it does need to actually look at all these regulations coming through and particularly those of the Reserve Bank coming through—and I see Helen White the deputy chair of the committee here nodding away agreeing with me which is a very good thing to do. What we see on that committee though from time to time—in fact quite frequently—is that not every entity whose regulations that we review and particularly not some Government entities take the whole process as seriously as we would like them to. So I can assure the Reserve Bank—who I am sure is listening somewhere—that we will take a very careful look at their regulations and particularly at any complaints that we have. We're very ably assisted on the Regulations Review Committee by the particularly capable officials that we have working with us from parliamentary counsel legislative counsel who are I find just a delight to work with and very professional. It is good to have this sort of legislation coming through where we have cross-party support. I think this is the sort of thing that the public would expect us to do. It is essentially an insurance scheme for depositors and I think it can—if it works as intended—work as an opportunity to enable other deposit takers to be able to at least compete in some way with the big four Australian-owned banks which as we know are incredibly powerful in the market. They take up about 85 percent of deposits. It's very good to have such big players in the market because of the stability of the Australian economy and the strength of it but the problem is that as has been said to me from time to time they're always there with an umbrella when the sun is shining but they're not always there with the umbrella once the rain starts. I think that that is true particularly for those people involved in things like property development that have found it very hard to get any funding lines at all at the moment yet they were there only a few years ago. I think too that we're seeing those banks move very much towards models that mean that they don't always finance the industries or sectors that they have in the past because of perceptions around whether or not they're essentially politically correct to do so. I think that's a real shame and that's why we need to actually have to give a little bit of help to some of those financial institutions and deposit takers to give them a little bit of an even playing field when it comes to being able to take people's deposits. There is a limit obviously to compensation of $100000 per person per institution or deposit taker so it's not a blank cheque. Hopefully we won't need to use it but the fact is that we most likely will at some stage because one of the upshots of the results from the global financial crisis in 2007 to probably 2010 was that a lot of the mezzanine financing that used to be available for people in business and particularly development suddenly was no longer there and so that left them very much at the mercy of the big banks. Certainly when I first started practising law we used to have solicitors' nominee companies that used to be involved in a lot of lending to developers and others being able to have different terms from banks but always at higher interest rates because higher risk brings higher interest rates. Those have all mostly disappeared because of the liability for the partners in those law firms if something went wrong and also the reputational risk as well as the personal risk of having to pay out of their own money as partners in a law firm should they lose money or where there's been some sort of fraud or something like that by a staff member. So these are all the things that have happened over the years that actually tightened the screws on the ability of people to access financing. It really does mean that when you're looking at say innovation for instance or technology areas it's very very hard for anybody to get any funding at the moment from those areas and I think there's a real opportunity here for some people involved in the deposit taking and finance areas to look at opportunities for them to be involved in that sort of financing. But it's pretty hard and I just think it's like one of those things where sometimes we put a lot of regulations and rules in where we're trying to protect everybody and I think that's one of the things we found with the—what was it called again?—the CCCFA or the Credit Contracts and Consumer Finance Act. It ended up with banks turning down people to get home loans because of the numbers of flat whites they had had that day or something—for spending too much they thought on coffees. It was ridiculous behaviour given that actually people can adjust their own behaviours. When they've got a mortgage to pay as opposed to rent to pay they can make those decisions. But that sort of nanny State-ism and trying to protect people can actually end up keeping people away from the opportunity to better their own situation and to build their own assets. So I think you always have to be very careful with this and this is one of the reasons I think this seems to me to be a reasonable response to a situation. I think with the Reserve Bank too we'll be taking a very clear look at just how that is being used. But the other thing is we need to always be aware as we perhaps were on the CCCFA that sometimes you just have to come back to Parliament—or we have to come back to Parliament—and change the rules if they're not working in accordance with the way that we anticipate them to do because whatever we anticipate may not be the way they work. I agree with the Hon Michael Woodhouse that the Anti-Money Laundering and Countering Financing of Terrorism Act which I actually had to be the poor Minister to bring it through finally—what a dreadful piece of legislation. Basically the European Union was making it really clear that if we didn't do it our banks weren't going to be able to operate in the EU. That's what happens when you're part of the international world—you know in the world you have to actually do these things. But that doesn't mean to say we can't come back to it and say How is this holding back businesses how is it leading to less productivity and how is it adding more cost?" We should always be open to review because if every piece of legislation was going to be perfect from now until the foreseeable future then why would we ever come back with amendments? The fact is that every piece of legislation should be able to be looked to say: is it bringing out behaviours that we expect it to do and is it working well and if not then how can we make that change that is obviously necessary? I think that's what we need to be open to. So if this piece of legislation doesn't work out in the way we think it will we'll have to come back with an amendment. But I hope that it does work and I hope that we end up with some more competition in the deposit takers sector but I also hope that we always say to people that they should understand that where there is more risk there'll be more interest and where there is more interest there'll be more risk. That's not a golden rule but if something sounds too good to be true it most likely is."