Clark David: Credit Contracts and Financial Services Law Reform Bill — First ReadingText is incorporated into the Bound VolumeClark David: Credit Contracts and Financial Services Law Reform Bill — First Reading[Sitting date: 17 September 2013. Volume:693;Page:13417. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): It is my pleasure to speak on this bill—The ASSISTANT SPEAKER (Lindsay Tisch): Is this a 5-minute call?Dr DAVID CLARK: I understand that it is a 5-minute call.The ASSISTANT SPEAKER (Lindsay Tisch): A 5-minute call.Dr DAVID CLARK: Obviously Labour supports this bill the Credit Contracts and Financial Services Law Reform Bill in its first reading. There are some more things that we would like to see in here. We would like to see the bill being given a bit more teeth. It is a little bit of a gummy bill in that respect—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member—Dr DAVID CLARK: Oh I was just hitting my stride.The ASSISTANT SPEAKER (Lindsay Tisch): Yes I see that but the time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.Dr DAVID CLARK: Before I was rudely interrupted I was discussing the gummy nature of the Credit Contracts and Financial Services Law Reform Bill—the fact that it is a little bit toothless. It lacks the bite that we would hope a bill of this nature would have. In fact it kind of signals at the moment that this Government is soft on financial crime.We would like to see this bill strengthened. We would like to see it structured in a way that actually allows for things like interest rate limits. That seems a sensible step to take. It is something that many other countries—including France Germany Canada Mexico South Africa Japan Singapore two-thirds of the United States Australia the United Kingdom and almost all of South America—are doing already. It seems a sensible step.It was just over a week ago that the Commerce Committee met in Auckland to hear about theSkycity bill the deal funded out of gambling debt. There we heard stories of people who had to pay 25 percent interest on day one on debts owed to loan sharks who visit the casino. People were facing 25 percent interest on day one. Mr Lotu-Iiga of Maungakiekie was there hearing these same concerns. No doubt he is concerned about the gambling bill because a number of people have identified him as someone with a community that will be affected unduly by that bill.What the select committee heard was that not only is there a 25 percent charge straight off for these loans but that that charge builds over time. These loan sharks are unscrupulous. They destroy lives. They prey on people who are vulnerable and do not have enough money to feed their families from week to week. They prey on people who are suffering under a Government that does not seem to care about dropping employment about the way in which median wages are dropping about the rising cost of living and about the average New Zealander who is working hard wanting their family to get ahead but facing increasing financial hardship.This bill here is designed to address something of this issue. It is designed we know as a response to the issue of loan sharks. It attempts to get in the way of the truck shops and the pay-day lending but we in the Labour Party think that it does not go far enough. We are going to support the bill going to the Commerce Committee so that we can have the discussion about whether or not an interest rate limit would be allowed. We are hopeful that the Government will allow the scope of the discussion to cover off that debate. It would certainly seem fairly short-sighted if the Government cut that debate out. That would give a strong signal that it was indeed keen to be soft on financial crime on those kinds of moral crimes where people prey on the most vulnerable in our society on those kinds of crimes that people in other countries and most OECD countries have clamped down on.The Government has allowed this bill to founder on the Order Paper—that is the other thing that needs to be said—for 5 months on top of years of inaction to the detriment of our nation’s most vulnerable. In 2011 the Minister of Consumer Affairs Simon Power announced that “The Government is to target unscrupulous credit companies that prey on unwary consumers”. He also said that “There are gaps in the system that allow the unscrupulous to take advantage of the unwary when it comes to access to consumer finance in these tough economic times.” Those are quotes. But it does not seem to have been much of a priority for this Government—as I say 2 years have passed and we are only now seeing the first reading of the bill.We would like to see a Government that focuses on the most vulnerable people and on job creation. We would like to see a Government that recognises rising unemployment the struggles of those in the regions and the two-speed economy that is emerging which seems to be a response to a Government with no plan. We would like to see a Government that really takes seriously this kind of loan sharking looks tocreate a law that holds those accountable and restricts their ability to prey on the most vulnerable—a Government that cares for the people. It seems that it will be up to the Labour members of the select committee to put these proposals forward but we look forward to having that debate in the select committee. This is a bill that needs to be strengthened.