Securities Legislation Bill

I am very pleased to take a second call in this part of the debate on the Securities Legislation Bill. National is happy to support the speedy passage of the bill. One of the complaints we have about the bill’s passage is the length of time the Labour Government let the bill sit on the Order Paper, when out in the public there is great demand, for example, for increased confidence in the capital markets by the increased disclosure of financial advisers. The bill also deals with the restructure of the current insider trading regime and amends the current substantial security holders’ disclosure regime.

I particularly want to ask why, in light of the number of collapses of financial companies out in the market, and given that the National Party is prepared to cooperate fully with the passage of this legislation, the Labour Government has chosen to let this bill sit so long on the Order Paper. We learnt, for example, in the case of the collapse of Provincial Finance, that when that company withdrew its prospectus for investment, $9.5 million of investors’ money continued to go into that company. That called into question the competency and diligence of the advice some of the financial advisers had offered in the market.

But after saying all this, we are not confident that the passage of this legislation will achieve its objective of improving investors’ confidence in the capital markets. The reasons are very simple: the Labour Government continues to go down the track of not knowing what it is doing. It keeps on interfering, sacking commissioners that the Government itself has appointed—like the chairman of the Electricity Commission—and interfering in the operation of private enterprise. Without clear legislation and a vision for the future of major industry and infrastructure issues—without this type of clear Government direction—and with the constant interference of Government in the working of the markets and its tinkering in the legislation, the confidence of investors in the capital markets cannot be inspired.

So even though the Governor of the Reserve Bank continues to call on investors to diversify their investment away from the housing market, I am afraid that until the Labour Government stops interfering and stops sending out conflicting messages, I am not too sure that the objective of this bill will be able to inspire confidence. Nonetheless, this bill will go some way towards clarifying, and requiring the greater disclosure of, financial advice. For that, National is happy to support it.

This is important legislation, and my colleague Pansy Wong has articulated the importance of bringing confidence back into the market. For those small investors in our capital markets—the mums and dads, and the individuals—and, of course, the institutional investors who want to have confidence in the market and in the integrity of the market, that is what this bill is about.

A number of speakers have spoken to the parts of the bill, and I know that my colleague Mr Tim Groser played a very important part during the Committee stage. He was able to crystallise and articulate the importance of this legislation and tell us what it is about. But there are some reservations, of course. Although we can say that there will be confidence in the markets and that the legislation needs to bring back the integrity that we all look for, I ask whether the Government can be trusted to keep its hands out of it.

💬 Darren Hughes: Yes.

The member opposite says “Yes”, but we have seen plenty of examples where, if something does not go the Government’s way, what does it do?

💬 Hon Member: Sack the commissioner.

Well, there is the chairman of the Electricity Commission, for example. Reading back on the reports, when this bill was being looked at in the previous debate on its Committee stage, I ask what was happening. At the same time that the Government was talking about integrity in the market, Mr Hemmingway got the boot.

So although we are supporting this legislation, because we think it sends the right signals, we have to be very careful that when things do not go the Government’s way, it does not get out its sticky fingers and start changing the process. However, when we look at the confidence and at the integrity that all investors are looking for, big or small, then for those reasons National is supporting this legislation.

I just want to add some comments as well to the very fine comments that my colleagues Pansy Wong and Lindsay Tisch have made. Of course, National supports this legislation, just as all the submitters and those who came to the select committee did. All of us, including those who look to make investments in the communications sector, need to see the understanding of the Government, and certainty and stability in the regulatory framework that surrounds the communications sector. We certainly support this bill, and the comments made by my colleagues Pansy Wong and Lindsay are also certainly supported.

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 59 in the name of the Hon Lianne Dalziel to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.