Chauvel Charles: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Chauvel Charles: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
[Sitting date: 25 July 2012. Volume:682;Page:3935. Text is incorporated into the Bound Volume.] 
CHARLES CHAUVEL (Labour) 
: 
 The problem with the speech that we have just heard is that it is a record of a number of measures that have been passed or are under contemplation by the House that would absolutely improve our regulatory environment and confidence in the markets but none of the measures listed by the member who has resumed his seat would address the particular problem that this bill the Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill is aimed at. 
I do ask members opposite to think carefully about their position on this legislation. It will not do to oppose it on the basis that we have just heard from Jonathan Young because the problem that Lianne Dalziel has identified in respect of this bill could still happen under the current legislative framework. A corporate with a high degree of market power could still write in the middle of an investigation by a regulator to a group of investors who were out of pocket and say something like this: “By accepting this Offer you agree to surrender settle and release all other rights or claims you may have against certain parties in connection with the relevant Fund … including any claims or the extent of any claims of which you are not currently aware and any claims brought on your behalf or for your benefit by another person. … It also means you are agreeing not to benefit from any claim made by any other person in connection with the Funds ….”. 
It should not be possible for a corporate to be able to write to individual mum and dad investors—that is a term that the other side is very fond of—in those terms in the middle of an investigation and be able to shut the investigation down effectively because the individual investors fear quite justifiably that if they do not agree either they will get nothing or they will have to wait years and years and go through litigation and expense in order to recover what is their right. Even today with the oversight of the Financial Markets Authority and with the improved regulatory framework in the finance area which my friend and colleague Lianne Dalziel began the process of putting in place—and I have to say she knows it as well as anybody I know and knows it better than most—this sort of behaviour would still be possible. 
I just want members opposite to bear in mind this: markets work effectively only where market failure is not allowed—where there is not allowed to be exerted a gross imbalance of power by those who are able to do it. All that Lianne Dalziel is trying to do by this measure—it is a considered measure it is a carefully crafted measure and it is a measure that she has given a lot of thought to based on her experience as a very successful and well-regarded Minister of Commerce and as Jonathan Young said the well-regarded chair of the Commerce Committee of this House in the last term—is redress the imbalance that I have identified. 
Jonathan Young as I said read out a list of legislation most of which members on this side supported because it is good legislation. It carries on the institutional agenda that we began to try to strengthen confidence in the financial markets. But the fact remains that none of those provisions would remedy the evil that this bill is designed to remedy. None of those pieces of legislation would fix the problem that Lianne Dalziel has identified. I urge National Party members to reconsider their position on this legislation because if they do not it is our duty to make sure that all those mum and dad investors who were out of pocket through exercises of grossly imbalanced market power such as the one referred to in the explanatory note understand who is on their side and who is not. 
Please members opposite think carefully about this. You want to be on the side of decency. You want to be on the side of mum and dad investors. If that is the case you will support this legislation.