Smith DamienDAMIEN SMITH (ACT): Thank you Mr Speaker. I rise to speak on behalf of the ACT Party. We'd like to propose some positive solutions around the bill. This bill introduced by the Government and the Minister will provide an updated focus on reform and transparency and overall governance and we think accountability arrangements of the central banks are clearly defined. We think it has a lot to recommend to it—ACT wants to support it in its first reading—but there are some points we'd like to make. Through policy that the prosperity and financial wellbeing of all New Zealanders there are some gaps in the system and this needs to be reviewed with the bill. Its main focus at the moment sees the maintenance of price stability supporting maximum sustainable employment and inflation management. But the banks' challenge will be to contribute dynamically to a future-focused economy which is productive with transparency—but there is an element of modernisation we believe that needs to happen in these challenging times. The institution is nearly 100 years old and ACT wants to see and to promote an even more stable well-governed and managed financial stability at a micro level from New Zealand. So there are five points we'd like the Minister to review and these are ones that we see in the bill probably haven't got world-class benchmarks and are a concern to our country. ACT believes on payment systems and cyber-security that there's a critical role here in the payment system to be played. We need a Government structure which actually will improve our cyber-resilience and ensure that outages that occurred recently with the payment system and at the New Zealand Stock Exchange (NZX) won't ever occur again. We're not convinced that there is a world-class solution in place there and certainly it seems to be by consultation to information management companies. So there are significant challenges to deliver on that task. Realistically given the breadth of the Reserve Bank's responsibilities for management payments system within New Zealand's largest clearing system—which is bigger than the NZX trade in the financial markets—and managing the distribution of cash and managing foreign reserves we've got a simple question: we ask how a single governance board or a committee can have all those skills and capacity to do this. And I want to focus on monetary and prudential policy. So we believe there's work to be done in that area to separate and define that constructively so the risks are taken out. So the Reserve Bank of New Zealand (RBNZ) consultative process needs to be modern relevant and bulletproof to maintain confidence. The second area we'd like to bring forward is an area that has been neglected and it's the difference between banking and non-bank lending. Banks have performed well in this period and done well. We want to ensure and include the system in a wider financial system—and it's not just that banks are good for everything which seems to be the RBNZ's approach and everything else is bad—banks have ample funds liquidity strong balance sheets and total access to the RBNZ's programmes. We'd like it to be considered that it would be more equitable as well to provide for less well-off underserviced communities—like the Māori community and the Pasifika community—which banks won't service and communities should be able to have access to fair financial products. So ACT wants to propose that the financial policy remit will also enable the Government to ensure the prudential regulation does not disadvantage locally owned institutions and prevent the ongoing decline of the New Zealand financial sector particularly its mutual and credit union sectors—and those are the people that would normally bank the poorest members of the community. At the moment those organisations don't have the same access to liquidity and to the long-term funding programmes and we think that that playing field needs to be levelled. And even though in the reports the monetary stability report it looks like it's the long end of the tail it's actually really important in terms of the community. So we'd like that to be taken into consideration and addressed and solved. So we think this deserves to be canvassed at the select committee. Also in terms of modern technology and peer-to-peer lending in terms of institutions like Harmoney we need to also incorporate into this bill the facilitation process for modern technology and for future practices that we can't envisage yet but certainly will be happening in the next 10 years.Point number three is around the monetary policy committee. We believe in transparency and accountability in decision making at the ACT Party and we'd like to see more transparency around the decision making and the decisions and the names of the members of that committee. They should be totally responsible and on the record as a committee as individual members for the decisions they make. So instead of a monetary stability report which says the committee agreed on this every single individual should have their names and a tick beside it on what they actually decided because we don't want to encourage groupthink and we want to have a difference of opinion and skill sets on that committee.Point number four is around monetary policy and prudential supervision. One of the things that I think the bill is ignoring is there are learnings for New Zealand to take the approach that the English and Australians have done to prudential supervision and create either a separate organisation as supervisor or a separate committee with independent members to ensure there is the appropriate focus. By doing that for monetary policy but not prudential regulation is the Minister effectively saying one is more important than other—we'd like that question answered—and if so isn't that a backward step? Finally on house price inflation ACT's position that the RBNZ should take housing costs into account when making decisions would be welcome during its decision-making policy and processes. We also note from today's release of the November 2020 monetary stability report that there is a concern that increases in highly leveraged borrowing if continued could lead to emerging risks to financial stability longer term. So we encourage the monetary policy committee to reflect on this area of policy and we would like to see a risk management framework around that which improves governance transparency and actually delivers the objectives of the RBNZ.So in conclusion ACT supports the reading of the bill at this first series but we believe there's work to be done. Thank you Mr Speaker.