Westpac New Zealand Bill

I move, That the Westpac New Zealand Bill be now read a third time. I wish to give some reassurances in this third reading. I wish to reassure New Zealand depositors with Westpac that their deposits will be as safe with Westpac after the passing of this legislation as they were before. Under Australian law, in the event of bank failure, Australian depositors have preference over the assets of the bank, including the New Zealand assets of the bank. The assets of Westpac New Zealand, as a subsidiary, will not be available to Australian depositors of the Australian bank in the event of failure. In addition, as a registered bank, Westpac New Zealand will be required to comply with the Reserve Bank of New Zealand’s capital adequacy and other regulatory requirements. That was the purpose behind the Reserve Bank of New Zealand asking Westpac—as it has previously asked banks—to comply in this way.

The second point I will make is on the question of transparency. This bill is transparent. It is not just a decision that has been made by the Minister of Finance. Under this bill, Westpac New Zealand has to disclose what assets and liabilities it will vest in the new entity, and it has to have that vesting order published in the Gazette and through the Statutory Regulations series.

Also, during the debate on this particular bill there have been claims that the Minister of Finance makes these decisions. This is not so. The Governor-General may, by Order in Council, approve a proposal signed by Westpac to vest certain assets and liabilities of Westpac into Westpac New Zealand. The Order in Council can be made only on the advice of the Minister of Finance, after he has received a recommendation from the Reserve Bank of New Zealand. So there are cross-checks the entire way through in order to ensure that our people in New Zealand who deposit with Westpac New Zealand are as safe as anybody else with their deposits. I just wanted to clarify that.

I also want to give my thanks to members of the Finance and Expenditure Committee for meeting the deadlines to enable Westpac to meet its 1 November date. The legislation was an essential way of doing this clearly, so that we could do it securely, without having a whole lot of other work that would entail cost for Westpac. My thanks also go to the officials who appeared before the select committee to offer clear advice on the issue.

The member for Wellington Central often gets these jobs from head office. This member was a school principal and a teacher, not a financial person. On a number of occasions I have needed to have bank officials in my room giving me advice and taking me through this legislation. I am very grateful to them for doing that, and I have learnt a lot as we have gone through the process. I am very pleased that the Westpac New Zealand Bill has been given the support and the detailed attention of good members of this House.

I will just make one quick point to Marian Hobbs. I think New Zealand investors in the new Westpac bank will actually be in a better position than before. I do not think anyone in this House likes to line up behind Australians for anything whatsoever, and people from my good area of Hawke’s Bay, of course, are lining up and trying to get their apples into Australia—I had to get that point in. I acknowledge again the work of Marian Hobbs; I thank her very much. She is in good company as a former schoolteacher who puts sophisticated legislation like this through the House—the Minister of Finance, of course, was a university lecturer. In the spirit of this Westpac New Zealand Bill, and in the spirit of good financial management and prudential setting up for New Zealand—and of being on a level playing field with the Australians—the National Party is very pleased to support the third reading of the bill.

Bill read a third time.