O'Connor Greg; Watts Simon; Robertson GrantPart 4 Supervision of deposit takersCHAIRPERSON (Greg O'Connor): Members we come now to Part 4. This is the debate on clauses 98 to 146 Supervision of deposit takers". The question is that Part 4 stand part.SIMON WATTS (National—North Shore): Thank you very much Mr Chair. I'm interested in comments from the Minister in regards to a number of clauses: 100 104 and 106—in particular there in regards to the offences and the amounts liable on conviction both for the individual and in any other case and the scale of the offences set there at the rate of $50000 for an individual or in any other case a fine not exceeding $500000. We talked previously around the proportionality considerations in regards to this legislation. Part 4 is in regards to the supervision of deposit takers and in effect the banks' information-gathering requirements but it would be fair to acknowledge that particularly for our larger banking organisations—particularly in the interests of what the Government has been commenting in the public domain in the last 24 hours—a fine of $500000 is not going to be potentially driving outcomes. So I'm interested Minister in why that amount was set at that level and whether the Minister is comfortable that that will provide the appropriate degree of tension in order to drive the behavioural response around the provision of that information.The other aspect and the other question area that I've got in regards to this section is around clauses 108 and 109. That is in regards to "Auditor to inform of intention to disclose" and the protection of auditor aspect. Obviously there is agreement from this side in regards to the need to have that audit function but the considerations around the ability for the auditor to be able to disclose information that potentially is gathered through that information-gathering process is an area that potentially would open up the auditor in this instance to potentially some questions around scope of audit and the ability for the auditor to actually have to disclose that information which may or may not conflict with the terms of reference which the auditor would enter into in regards to the provision of those audit services. So I'm interested in whether the Minister would look to make any comments in regards to that and whether he believes that we've got that balance right in regards to that portion.The other clause that I wanted to just have a couple of questions in regards to was under Subpart 2 "On-site inspection" clause 114 which is relating to the "Offence relating to [an] on-site inspection". This clause deals with where the employee or a director or an agent for the deposit taker commits an offence when they fail to deal with the requirements of the clauses in regards to the provision of that information—again in that respect whether the threshold around refusing or failing to comply with the giving of information is an appropriate mechanism in regards to initiating an offence and whether the Minister is comfortable with clause 114(1)(b) which is "resist obstruct or delay the Bank in carrying out an on-site inspection". It sounds a bit rougher than dealing with a ram-raider at the moment Mr Bayly.Tama Potaka: Not in Hamilton!SIMON WATTS: Not in Hamilton says the member for Hamilton West and rightly so. But anyway Minister that'll do for this stage. I'm interested in your comments on those.Hon GRANT ROBERTSON (Minister of Finance): On the first and the last matters that the member raised I am comfortable. The way that these Acts work when it comes to fines is that there is an exercise done to look across the board at the way fines work across legislation and a proportionate approach is taken. And I'm sure that's what has been done here. And on the last point I'm uncomfortable.On his middle point I would just refer the member to clause 107 which indicates the severity of the threshold for which an auditor would undertake the provision or the disclosure of information and it is that the licensed deposit taker or associated person has contravened a prudential obligation or contravened various parts of other Acts that relate to their duties or if they're in serious financial difficulty or operating fraudulently or recklessly. So I think the threshold is particularly high here and the bank itself obviously has its job when it's working directly with the deposit taker but this allows the opportunity for an auditor when a particularly high threshold of poor conduct has been achieved. So I am also comfortable with that."