Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

It is my pleasure today to stand in support of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill in its third and final reading this afternoon. As we have heard, this bill has been considered by a very cooperative select committee, the Law and Order Committee. The current Act that is under operation is phase one of the tranche of changes that is being made, and it was brought in for those organisations that were probably of a higher risk of being used by criminals to launder their money—they were the banks, casinos, and a range of other financial service providers. It was the first step in closing the gaps that had the potential to provide ways for criminals to launder their money.

This bill is a further step, and it is helping us protect our businesses as well as ensuring that New Zealand’s reputation remains of a very high standard and is respected, and that we are continuing to be known as safe country in which to do business. This bill, phase two, extends the regime to lawyers, conveyancers, accountants, real estate agents, racing and sports betting, and businesses that deal in high-value goods, such as jewellery, precious stones, cars, artworks, etc. These are the organisations that still have potential, in terms of being used by criminals to launder their dirty money. The committee wanted to give these organisations time to implement their systems, to train their staff, and to have their systems in place in time to meet time frames. Those time frames have been staggered and that gives these organisations a range of time, but also gives the staff within the Ministry of Justice time to work with these organisations to implement their systems.

The lawyers and conveyancers’ implementation date is 1 July 2018, the accountants is by 1 October 2018, and the real estate agents is by 1 January 2019. As we have heard from my colleagues across the House, the New Zealand Racing Board is the last of those organisations to be required to meet its implementation date, and that has been set at 1 August 2019. The rationale behind that was that the racing clubs across the country are quite small and do have some challenges in setting up these systems, so their time was extended out to help them to comply. The timing was important to the select committee, because in 2019 the Financial Action Task Force on Money Laundering will be doing its review of New Zealand, and we know that this will have a direct effect on our international trade reputation. So it was important to the committee that we were able to meet those international obligations, and that is why this bill is being staggered and the implementation dates fit with that review.

The act of laundering money is the way that criminals do clean their illegally gotten gains, and that is usually through illegal activities like selling drugs or stolen property. This bill will make it so much more difficult for those criminals to clean their dirty money. That also includes people internationally who may have been looking to New Zealand as a place to launder their money. So it protects our honest business owners and operators, and it does tighten up the systems that criminals may have seen as an easy ride for them, in laundering their dirty money here in New Zealand. It is much more challenging for them now. This bill protects New Zealand’s integrity, and I commend it to the House.

Let me comment on the regulatory impact statement (RIS) and say to the House that from the RIS we know that in 2008 the officials provided to this Government information—and I would say quality information—that there was a real need for us to strengthen our anti - money-laundering regime. It was important for us to take note of that information—2008, this is—in terms of the changes in the global setting of the way money was being moved around by those who are into the promotion of terrorism. In 2008 that information was given to this Government. In 2008, also, our officials gave this Government information that it was important to stop our domestic criminals taking advantage of our regime at times through organised crime and through laundering money that was gathered through drug offending. That information was made available to this Government.

The Government then decided that it would do something about it, but it would do it in two phases—phase one and phase two. I do not know why it, sort of, did not act quickly on that information. In 2010 the police intelligence unit that gathers intelligence in the financial sector from all over the globe again highlighted to this Government, with a sense of urgency, that we must increase our anti - money-laundering regime because of what was happening in the criminal arena in a global setting. But the Government did not act on it, and then when it did act on it in 2013, when our first phase came into force, the Government had given the non-financial sector an exemption. So the first phase, in 2013, would only include the banks, the money transfer units, and the casinos. I would say that with the money transfer units there was quite a bit of rumbling, because these are small units that send money mainly to the Pacific region from New Zealand, and suddenly they were caught up in this. But, none the less, they adhered to the Government law at the time.

In 2013 this came into force. In 2016 we then found out that the Panama Papers had been leaked to the media, and we learnt that New Zealand was being used by international trusts almost to launder money. We know that those reports highlighted that there was a need for our Government to act quickly and to act early. That information was provided by officials as early as 2008. The police financial intelligence unit provided further information in 2010. We did not act on it until 2013, and when we did act on it, we exempted a very important sector. That sector, the non-financial sector, was considered by the police to be a gatekeeper to the financial system. In other words, the police said that that sector provided an impression of respectability, an impression of legitimacy, and an impression of normalcy, particularly where large transactions or large sums of money were involved.

To this day, I do not know whether we will ever be clearer as to why that information—despite being provided to the Government and provided to the Minister as early as 2008, and reiterated in 2010—was not taken into consideration until the first phase in 2013. And then we allowed it to drag on until this point here.

I will tell you why Labour is supporting this bill. I know that the other Opposition parties that are on the Law and Order Committee also had a sense of urgency that we needed to act on it, and act quickly on it. There was a bit of debate about whether to push out when the implementation of this regime should take place. I think it was generally the Opposition parties that urged that we needed to act quickly for a number of reasons. (1), we have international obligations to the international organisations that are charged with protecting our economies, protecting the integrity of financial systems. (2), it was also about, for New Zealand—we needed to put a stake strongly in the ground and dispel what the Panama Papers revealed. We are strongly in favour of supporting the strength of our reputation, particularly in the international arena of trade. That is really fundamental to why this regime is so important—it is about us protecting our reputation in the international arena.

But I also want to say that New Zealand also plays a leading role in the Asia-Pacific region. We provide technical advice to a lot of the countries in the Pacific. I know that more recently New Zealand has offered advice to Samoa in terms of upgrading its anti - money-laundering regime. This is important because if we are not seen to be following international best standards, if we are not seen to be plugging the gaps, then our integrity, in terms of us trying to give advice to other countries in the region, just will not shine. Any weaknesses in our own system risk us losing not only our credibility but also our influence in the regions.

This legislation is about us protecting our reputation as a corruption-free society. I remember vividly Transparency International holding up a report, in one of the submissions, and saying that New Zealand has so much to lose if we do not act quickly on this. For many, many years our economy, the way that we do our business, was generally seen as corruption-free. For many, many years we held the No. 1 spot in the Transparency International reporting.

I want to come back to the New Zealand Racing Board and its request to push out the implementation of this regime. I sympathise with the board because not too long ago we passed new laws for the need to earthquake strengthen many of the buildings. The board has a lot of structures, and it has been a very costly exercise for it. I am sympathetic to its need, that it is having to pay for significant compliance costs, not only for the earthquake strengthening of buildings but also in this. So I support the fact that we are pushing the Racing Board to be last, in terms of implementing this regime.

Can I say that when the Minister began this debate he looked deflated. He looked down. I just want to say to the Minister: “Cheer up. Change is the air.” I know that one week in politics is a long, long time and as my colleague Stuart Nash said, change is in the air. In 7 weeks we will be able to relieve you of your responsibilities. So, without further ado, this party does support this regime. It should have been passed some time ago, but we are at this stage because of the way that this Government, instead of acting quickly on the information, dragged its feet. That is why we have been slow in passing this legislation.

I think there is a part of this bill that we tend to gloss over, but I think it is very, very important, particularly for the businesses that are going to be the ones on the front line to empower this legislation. It was estimated that the cost of compliance over 10 years was going to be $1.6 billion. By working with the different companies and people in the private sector in particular, refining the options to help them meet their obligations, we have significantly reduced the predicted compliance costs from that estimated initial $1.6 billion over 10 years, and have now lowered it to $800 million to $1.1 billion. But that is an outstandingly high figure.

I bring this to the fore, to perhaps say to New Zealanders who might be listening in to this debate—although at 10 past 5 on a Thursday afternoon there may not be many.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will address the House.

💬 Hon Ruth Dyson: I am getting a lot of calls saying people are listening.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Do not encourage him.

Ha! Thank you very much, Mr Assistant Speaker, for your guidance. But, by and large, New Zealanders will not notice the effect of this legislation in their everyday lives, but behind the scenes there will be a tremendous level of surveillance taking place regarding transactions that come from suspicious activities. The point I am making is about the incredible cost and expense to ensure that New Zealand is a safe and credible society. I do not think we should just ignore that, because we know that the cost of safety and certainty and security in our country is a very important thing. What we will see is that there will be businesses that will absorb those costs.

Going back to what the previous speaker, Aupito William Sio, said, why has this taken this length of time to bring through and institute? It is because we want to do it in an efficient and a practical and an effective way, but we do not want to load down our businesses with huge compliance costs. We want to find efficient ways in which they can continue to make our society safe from money-laundering. If we do not make it safe from money-laundering, it is not just reputation that we have to worry about; it is actually criminal activity that we have to worry about. Making this place safe, making this New Zealand society and economy safe, is very expensive. We need to do it effectively and efficiently, but we need to do in a cost-effective way. Sometimes that takes just a little bit longer than slapping down a $1.6 billion bill over 10 years. Working with the sector is incredibly important, and also working with it so that it can bring these provisions in in an appropriate and timely way as the sector absorbs, I guess, the demand and the burden of this, and doing it in such a way that the sector can do it effectively: to develop risk assessment programmes, to put in place procedures and controls, and to train staff—all of these things.

So I think it is important for us to just realise that behind all of this legislation, all of this good thinking, all the thinking behind this that parties across this House agree with and support, we also have banks and financial institutions. Now we reach back even further to businesses, real estate agencies, accountants, lawyers, and betting agencies for sports, racing, and all of those activities, and we ask them to be part of this safety net to keep New Zealand safe. Let us just acknowledge that. Thank you.

Tēnā koe e Te Māngai. I rise to speak in the final reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. I want to first start by saying why this bill is important. I think this is actually one of the most important bills that we have had through Parliament in the time that I have been here, since last October. I think this bill has been far too long in coming. We have to remind ourselves that money-laundering is about how criminals hide their money. It is about ways in which illicit money can be washed clean. The police in 2013 estimated that the annual amount of money-laundering going on is $1.6 billion, but, actually, they did not really know, and they themselves had put the estimates at orders of magnitude higher.

We need to remind ourselves that the money comes from profits from crime. That means there are real people at the end of this crime. There are people who have been hooked into P and other addictive drugs. There are victims of extortion and organised crime—women and children have been forced into the sex trade. There have been arms dealers and corrupt officials. These are some of the people who are hurt by crimes whose profits end up being laundered in our country. We need to remind ourselves of the human cost of money-laundering.

We have also heard from the police that more than half of the money-laundering goes into real estate. What does that mean? Well, there are examples of foreign buyers coming into New Zealand, viewing 50 houses, and buying 40. The amount of money-laundering that has gone into real estate has fuelled our housing bubble and has meant that younger New Zealanders cannot afford to get on to the property ownership ladder. It has distorted our property market because we have not had adequate controls, and the lack of proper legislation has created a financial subsector that feeds off dirty money.

So legislation has obviously been required. The question is why it has taken so long. The UK has had similar legislation since 2007. The Financial Action Task Force on Money Laundering did an evaluation of New Zealand in 2009. It found 197 cases of money-laundering for fraud, drugs, theft, blackmail, and burglary. As a result of its report, New Zealand was struck off the EU’s white list of countries that could be trusted on money-laundering, and that added to the cost of doing business for New Zealand companies. The Financial Times called us a soft touch for money-laundering.

This Government, when it came into office, promised action. Officials, however, subsequently said that work was deferred due to other priorities. It was only after pressure from the Greens, Labour, researchers, and across the business sector that we started to get some recognition that this legislation needed to be brought forward, and then this Shewan report recommended that the legislation be introduced by the end of 2016. Finally, we have legislation before us in this House, produced at breakneck speed in the last sessions of Parliament before the end of the session.

The Green Party supports this legislation. We have been deeply involved in its formulation. We have engaged closely in the select committee process, and have welcomed the constructive process of the chair, Kanwaljit Singh Bakshi, and his Law and Order Committee colleagues. I think it has been a constructive process, and I think that through processes such as this we have seen the committee acting to reduce compliance costs and make more effective legislation.

We have some concerns still about the bill, however. Submitters called for three key elements to be included in this bill. They, in our view, were not fully included. The first was that submitters called for the information to be supported by a public register of beneficial owners. Now, this means that the people who had put their money into foreign trusts in New Zealand—the 11,000 foreign trusts that were registered at the time that the Panama Papers broke open this story—would have had to have gone on to a public register showing beneficial ownership. In the end, the Government stopped short of that register. It provided a far less onerous requirement, that instead only names and addresses would be required without beneficial owners.

As a result of even these weak rules, most of the trusts then did not reregister—3,000 of the 11,000 trusts were prepared to give this basic information. That says to us that any assurances that the Government gave that the foreign trust business was entirely legitimate were not correct—that, actually, it turns out that most of those trusts were in New Zealand because of the secrecy provisions on foreign trusts. We want to see a public register of beneficial ownership applied to businesses and trusts in New Zealand. This is a policy that the UK and many other countries internationally have adopted. We regard it as good practice, in terms of countering money-laundering.

A second recommendation was to ensure that there was proper reporting on enforcement. One of the key areas of enforcement is the link between money-laundering and gambling. We have seen the case of William Yan—a generous political donor, by the way. This year the High Court ordered William Yan to return $42 million from alleged illegal activity that had been laundered in New Zealand. His network and other networks of criminals had been based at Skycity. William Yan gambled $293 million in Skycity. Skycity made $23 million profit from that. However, that money was not returned to the public. What we see is the incentives for some money-launderers to keep using the institutions that allow them to undertake their money-laundering, and those very institutions themselves have a financial incentive to allow that activity to continue. Breaking that cycle is absolutely crucial, and we do not believe this legislation goes far enough in breaking that cycle.

I think the third area that we need is we need additional resources in order to be able to implement this legislation properly, and that was a point made by several submitters. The submitters said that it is not enough to just have the legislation—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Sorry, I forgot to give the member the call—I was so enthralled. The member has only a minute.

Thank you. It is not enough to have the legislation; you need to have the proper enforcement. What we have seen in New Zealand is that there has been far more emphasis on the $40 million of welfare fraud than the $4 billion of white-collar crime—that 1 in 20 welfare beneficiaries is investigated, whereas 1 in 10,000 taxpayers is investigated for fraud. What we see is that 67 percent of the welfare fraudsters go to prison while 18 percent of white-collar criminals do.

We have a punitive welfare system and a permissive white-collar crime system. We need to change this. We need to get much more serious about the dirty money in our economy. The Greens would change this. We would supplement this bill with proper action to clean up money in our country and have productive investment and a productive economy for the benefit of all.

The member’s time has expired. Before I call Fletcher Tabuteau—I was involved in a slight interchange with Jonathan Young and the Hon Ruth Dyson earlier, with regards to forms of address in the Chamber. I will refer them to page 224 of McGee, and in particular, a paragraph headed “Debate in the House is a discussion among the members of the House present in the Chamber.” It goes on to say, “Members should address the Chair, not the ‘listener’.” I would assume that that now means the listener and the viewer. So I think I am probably the only member of the House who addresses the listener, and certainly not from within the House.

Thank you for this opportunity to speak on behalf of New Zealand First on this, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. I would just like to acknowledge the contribution from the previous speaker, Barry Coates, because it is not often that I agree with the Green Party but he did speak quite eloquently about the resourcing in regard to the implementation of this legislation, and I do think that he is right in saying that. This is an insidious crime, and, in fact, those were the exact words of the Minister of Veterans’ Affairs, who gave the first contribution in this, the third reading of the bill. He described it as an insidious crime.

I would like to congratulate the Minister, actually, on his initial contribution. It was a robust and worthy contribution on such a serious matter. I would also like to acknowledge the Law and Order Committee’s work, which I have done previously. It is not a committee I have sat on, but I do commend it because the detail in this, and the movement from where we were in terms of draft legislation—and the contributions from the public and industry experts were robust and quite large. So to get to this point, now that we are finally here, I do commend the work of our bureaucrats and the committee members.

The Minister said that this crime of money-laundering is insidious. He said that it undermines the financial system, and with that I completely agree. What he said, though, was that we already have good laws. I would disagree with the Minister’s contribution. We do not have good laws currently. This is kind of perhaps best described, this particular amendment bill, as a good step in the right direction, but it is only the second step in the right direction. He seemed to imply in his contribution that criminals would now move into these areas to launder their money, implying that they had not been doing so already. But we have heard in this House this evening some particularly pointed statistics from other members on the level of crime being committed by way of money-laundering and fraud within our trust sector in particular, with our lawyers, real estate, and an example from Skycity—an unfortunate individual case.

So, to the Minister: this has been an issue, and in relation to this particular amendment bill, these areas have been a known issue of concern for decades. I put it to the Minister that the Reserve Bank, Treasury, the Police, and indeed New Zealand First—particularly with regard to Winston Peters—have been telling this Government ever since it came into power that this is a huge problem, and we have needed action ever since National did in fact become the Government. So it was a problem 9 years ago, but the way that the industry itself has been treated—this cottage trust industry has been treated—in New Zealand over the last 9 years, the problem has grown, I think one could fairly say, exponentially.

So I view this bill as an excellent example of what should be called an indictment on the Government and especially the beacon of National Government politics—and I speak of and refer to the former Prime Minister of New Zealand, because he in particular drew up an impassioned defence for these lawyers and the ongoing activities of these trusts in New Zealand. He spoke of a cottage industry returning millions to the New Zealand economy. Yet we have to put this into scope and see what the balance was of this supposed good cottage industry in New Zealand. I think, as previous members have noted, the police investigation team into fraud did give us some particularly useful numbers. Just last year it tried to summarise the problem for us, and it came up with a figure of $1.6 billion.

I say to the members opposite: that is $1.6 billion of money being currently laundered in New Zealand for illegal gain, whether that be through drug cartels, for example—a common example, and it is not an unfair example to give. We are talking about international drug cartels using New Zealand to launder money to the tune of $1.6 billion per annum. We are talking about the facilitation of financial support of terrorism. That was used as an example, and a link was made within the Panama Papers to terrorism and the laundering of money in New Zealand. It is an indictment on this Government that it has taken 9 years to get to this point.

The Hon Todd McClay said to the House in 2009 that there is money-laundering in New Zealand and it comes from the illegal drug trade and it is too much and we must do much more about this. He finished his contribution to the House by saying that the sooner those who use New Zealand as a place where they may be able to launder their illegally gained funds realise that we are taking this issue seriously, the sooner they will stop. Those are the words of a National MP at the time in 2009. It is not unfair, it is not unreasonable, to say that for nearly 9 years this Government has sat back and done nothing. It is an appropriate example of a Government that says one thing and through its inaction does the complete opposite.

The words from Minister Bennett that I described as being eloquent words—they were true. But I say to him that they were hollow words because of the time that it has taken to get here. This Government has done nothing until the pressure came on, and, boy, was there a lot of pressure from the Panama Papers. The pressure was truly put on. Now we have a Government that has acted, and I have spoken in argument of the Government’s actions, but to be fair we are here, and this is good legislation, actually. It is a good second step in the combating of money-laundering and the financing of terrorism.

I think I might end my contribution there, because it would please Mr Naylor to no end, but also because it is important that the public of New Zealand know and that this House record that New Zealand First does support the legislation. It will achieve what it has to do. Actually, I do have to acknowledge Mr Young, perhaps, in ending my contribution because he did speak well about the cost burdens to New Zealand business, and we do have to give cognisance to the obligations that this legislation puts on New Zealand business and its operations. I do agree—which, again, is unusual—with the member. The select committee did do a lot of work, there was a lot of consultation, and we have finally got here. It will cost businesses more to comply, but it is fair that the New Zealand public expects that New Zealand will not allow the facilitation of money-laundering and the financing of terrorism through the New Zealand economy and these industries. We have arrived at the right place. My point is it has taken way too long, and I hope the members accept that, but we absolutely support this legislation. Thank you.

That was quite long, that speech. It gives me a great deal of pleasure—

💬 Fletcher Tabuteau: This will be longer.

Ha, ha! Yes, it will be much shorter—longer but shorter. It gives me a great deal of pleasure to take a short call on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. This bill brings a range of new entities into play in terms of the ability to monitor what we term the laundering of money. Those new entities include lawyers, accountants, casinos, the Racing Industry board, and a number of other entities.

As I said the other day in my second reading speech, the select committee stage that we went through was very interesting, because, as the previous speaker said, it was quite an interesting bill to have to deal with and to understand how it was going to work. It is introducing some extra cost to business—a considerable amount of extra cost to business, actually—but the Law and Order Committee had to balance the amount of extra cost that was being introduced for business and the benefit to the New Zealand economy and the New Zealand reputation, because this bill is pretty much about our international reputation. It is about our financial system and it is about ensuring that we have got as much integrity in that financial system as we can get.

As has been alluded to in a number of the speeches already, this money-laundering occurs in all sorts of forms, from the purchase of art to gambling to the acquisition of property. There are all sorts of areas it applies to, so it is a very broad challenge for the law to cover all those areas and to then be able to account for it. So the reporting mechanisms and how firms have to account for this stuff was the subject of a large amount of discussion.

There are some pretty broad claims of benefit to the New Zealand economy, and I will just very quickly quote from this. The proposed reforms “could disrupt up to $1.7 billion in fraud over the next 10 years.”—that is fraud and drug crime, basically, over the next 10 years. They may “prevent up to $5 billion in broader criminal activity and reduce about $800 million in social harm”. I think those are a pretty broad range of claims, and how you would really calculate it I am not quite sure, but it does show the significant challenge that we have in this area, and if it is international money that is coming into New Zealand and being, effectively, laundered through our financial system, it is certainly not in our best interests.

As I said, the select committee stage was really interesting. It is a complicated bill, and it is going to be complicated for some of the organisations concerned to report on this. The Minister has the ability to provide exemptions to reporting times and things like that if, in fact, it is found that some of these organisations struggle to get themselves up to speed quickly enough. I imagine it will happen. On the whole, whilst the submitters were asking for more time, almost unanimously they supported this bill, and they also supported the fact that it was necessary for New Zealand’s good.

So I have got a great deal of pleasure in commending this bill to the House, and I look forward to it being put into law. Thank you.

Tēnā koe, Mr Assistant Speaker. Thank you for this opportunity. Many of the speeches this evening have gone a long way to explain both the content of the bill and, of course, the pathway the bill has followed to this point in time. I want to support many of the sentiments and also reiterate some of the points made by speakers from across the House about the importance of this particular bill in terms of our international reputation. We need to restore that because, let us be very clear, we took a fall. We took a hit. We took a slide, and it is important to make sure that our reputation internationally gets placed back where it belongs, and that is right up towards the top, where New Zealand is considered a reputable country to do business, to invest in, and to work with. I think that is an important thing to do. We want to be at the top of those kinds of lists and not the OECD homelessness list, and I think that is an important point to make.

This particular bill obviously closes some loopholes. A member on the other side of the House referred to fish slipping out of a net. I think this is a good opportunity to certainly close those loopholes, to close those holes, and to also do it in a reasonable fashion, to allow lawyers, accountants, the Racing Board, and others who fall within the scope of this bill to come up to compliance.

I did ask questions about whether or not we have given too much time, and whether or not they will have the resources to become compliant, but it was clear through the submissions and many of the speeches in the House over the course of this bill that the submitters were—it was an agreeable date to be able to become compliant with this particular bill. So the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill—I commend it to the House.

Thank you for the opportunity to speak on the third reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. It is good to see the support for this bill, so I am taking a short call to support this bill.

It is important for us to keep our country safe. Our current legislation has obligations with regard to anti - money-laundering and countering financing of terrorism for certain businesses, especially businesses that deal in cash for cash, or money for money—for example, banks, casinos, etc. So it is important to extend these obligations to other businesses that are at risk of being exploited by money-launderers.

As soon as we hear the term “money-laundering”, it just gives us the idea of some kind of illegal activity happening somewhere. Yes, when money-laundering happens, that money is normally generated through some illegal activity. It is normally laundered to convert that to legitimate money or sometimes for tax avoidance, but at other times it can be used for supporting some very serious criminal activities like terrorism or drug trafficking. Terrorism and drug trafficking, we know, are criminal activities that are eating away our communities, and we have to ensure that we are protecting ourselves from such activities. These activities need money, and money has to come from somewhere, so we have to protect ourselves from money-laundering.

We know that New Zealand is seen to be a very safe country, but we cannot be complacent. So we have to make sure that we have systems in place where we can detect such activities, we can prevent such activities, and, also, we can prosecute people who are involved in such criminal activities.

We also have this very good reputation of doing business with ease in New Zealand, but that does not mean that any kinds of businesses or money can come to New Zealand. We have to protect our country, and this is the legislation that will do that, so I support this bill and commend this bill to the House. Thank you.

The question is that the motion be agreed to.

💬 Hon David Parker: Mr Assistant Speaker?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Oh, the Hon David Parker. I apologise. I thought that we had finished.

Mr Assistant Speaker, I have heard people talk against national standards in this House and they cannot even count to 12. I rise in support of this bill—

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member should take his shoes off.

I want to respond, just briefly, to a couple of comments that were made by National Government members. They lauded the fact that New Zealand has low levels of corruption and was ranked highly by the Transparency International measures of freedom from corruption. They did not say that each time, in the last 2 years, that report, in respect of New Zealand, has dropped us a ranking, which I think is a terrible thing, and is a consequence of things not being completely good in New Zealand in respect of these matters. I will not say anything more, other than “Saudi sheep scandal” to actually link some of that to the Government.

In respect of other areas where this Government has been woefully short in responding to the needs of our country and the world to deal with these issues, the Panama Papers have been referred to by members on both sides. It was terrible that the National Government pretended that there was nothing wrong there and that we had transparency when we did not. The beneficial owners of those trusts were not transparently disclosed, and, therefore, people used New Zealand to invest overseas in order to invest—I would think—some illegal money, some drug money, some laundered money, perhaps money from slavery, and corrupt money stolen from Governments. That was happening through New Zealand.

How can I say that with confidence? Because when the report from John Shewan came and there was a change to the law requiring disclosure of beneficial owners so that that could be reported to tax authorities overseas, how many of those trusts reregistered? A very small proportion of them. The vast majority of those trusts did not register under the new regime.

Tax avoidance by multinationals has not been clamped down on. We heard two announcements today that the Government was lauding. Those were the use of interest rates that are falsely high from a parent to a New Zealand subsidiary and the pretence that there was not New Zealand business for the likes of Apple or Google, which have transferred their profits to overseas jurisdictions. The Government lauds that. We have been claiming that and asking for those loopholes to be closed for 5 years in this Parliament, and the Government is only doing it now. It is pretending it needed authority from the OECD to do its sovereign duty to New Zealand and to New Zealand business competitors, including the media, which has been cleaned out by the likes of Google and Facebook, while the media interests—sometimes, not always—pay tax in New Zealand, and those entities did not.

In respect of this, this is another important part to getting fairness back in society and to oppose those who launder money to finance terrorism or for other criminal activity. With those brief comments, I support this on behalf of the Labour Party.

I will be very brief, actually. I have to say, coming into this debate, I had not been a member of the Law and Order Committee and was not too au fait with the major details of the bill. But I have to say that the minute I heard the member Stuart Nash get up and say that this was going to help the good guys catch the bad guys—and I am pretty those were his words—he had me hooked. So with that, I commend the bill to the House.

Bill read a third time.