Adams Amy: Westpac New Zealand Bill — Second Reading 
Adams Amy: Westpac New Zealand Bill — Second Reading 
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AMY ADAMS (National—Selwyn) 
: 
 It is a great privilege to rise this afternoon and take a second reading call on the Westpac New Zealand Bill. I was a member of the Finance and Expenditure Committee which considered this bill as was the speaker who has just resumed his seat Stuart Nash. I think it is important to start off at the outset by making it very clear that this bill is about meeting the needs of the Reserve Bank’s regulatory oversight. It is more about ensuring that the Westpac Banking Corporation which is obviously one of our biggest and most successful banks is able to trade and to continue to do so within the terms of the Reserve Bank’s local incorporation policy. 
To put that oversight into context and to understand why we should focus on it I think that if there were two things we learnt from the global financial crisis the first is that we have to have a strong and robust banking sector. Even now as the fall-out continues around the world we see countries whose banking sector has let them down and the significant effect that has had not only on their economies but on the people of those countries. We are extremely lucky that in New Zealand we have a banking sector that New Zealanders can rely on. Certainly Westpac and the other major banks are a big part of that and we should be very grateful for it. 
The other lesson that was learnt from the global financial crisis is the importance of effective regulatory oversight. That is really what this bill is about. The local incorporation policy is to ensure that if there is ever a time when the Reserve Bank as the body that supervises the banks needs to take oversight control or any sort of action to protect New Zealanders the key assets are held here in New Zealand within the jurisdiction that the Reserve Bank can control. So we have this policy called the liabilities cap for the systemically important banks. 
Effectively that policy means that once a bank’s liabilities get in excess of $15 billion it has to ensure that those assets are controlled here in New Zealand. Let me be very clear that there is no question that Westpac has ever broken that cap but the transfer of those institutional banking assets from Westpac Banking Corporation in Australia operating through the branch structure in New Zealand into Westpac New Zealand is really just about future-proofing that situation and making sure that Westpac can at all times in the future continue to trade within that liabilities cap without any issues. As previous speakers have said in the debate so far a private bill such as the bill we have before us is really the only way to achieve that transfer seamlessly and effectively. 
I think the other point that is worth making for people listening at home is that this legislation does not in any way affect banking relationships with Westpac. Anyone who has an eftpos card a cheque book a savings account or whatever has nothing to fear from this: there is no difference at all. The legislation will affect only the big end of town: institutional banking arrangements. But even at that level those institutions will be seamlessly moved across into the ownership of Westpac New Zealand and private legislation is certainly a very effective way to do that. 
I will wrap up my contribution by commending the work of the Finance and Expenditure Committee in going through this legislation under the chairmanship of Craig Foss. He of course was also the sponsor of the bill and he chaired that committee quite properly and very effectively. The Finance and Expenditure Committee works very well on legislation like this. It approaches the legislation in a way that ensures that it is robust and effective and that we have not gone any wider than we need to in meeting the objectives of the bill. I think certainly that this bill’s process reflected that approach. We gave it thorough consideration. We tested the purposes the need for the bill and the width of the bill and asked whether the provisions went any further than they needed to. We are satisfied that the bill is in very good shape. 
The committee has made a couple of minor amendments. Those are detailed in the commentary on the draft of the bill that is before the House. I think this House can certainly have confidence that the bill before it is necessary and will be seamless. It will not have an impact on ordinary New Zealanders except for on their knowledge that should there ever be a banking crisis ahead of us this legislation will enable the Reserve Bank to continue its effective oversight and control of those banks that are most important to New Zealand. I commend the bill to the House.