Reserve Bank of New Zealand Bill

Members, we now come to Part 3. This is the debate on clauses 112 to 167 and Part 1 of Schedule 3, which relate to central bank functions. The question is that Part 3 stand part.

Point of order. Mr Chair, we’re in a bit of position here where the question was put before all the Supplementary Order Papers (SOPs) were discussed and debated. So we have SOP 48 in the name of my colleague Andrew Bayly, which is for Part 2. We’ve now voted on Part 2, and we won’t be able to debate SOP 48. My understanding is that—

Yeah, I’m on my feet. OK, I accepted the closure motion based on my watching the entire debate—[Interruption] Excuse me? Have you got something to say?—and as far as I’m concerned, all members of the committee had ample opportunity to debate every single SOP as well the entirety of Part 2. We are now on Part 3. That part is over.

Speaking to that point of order, Mr Chair.

CHAIRPERSON (Adrian Rurawhe): Are you taking a point of order? A new one?

Yeah, just speaking to that point of order—

CHAIRPERSON (Adrian Rurawhe): No, no. I made a ruling.

Is the ruling now that we won’t speak to SOPs?

CHAIRPERSON (Adrian Rurawhe): Are you taking a new point of order?

Well, I was speaking to that point of order.

CHAIRPERSON (Adrian Rurawhe)348CHAIRPERSON (Adrian Rurawhe): No, you made a point of order, I have made a ruling, that’s the end of it.

Hon GRANT ROBERTSON (Minister of Finance): Mr Chair, Part 3 of the bill takes us to the core functions of the Reserve Bank—

💬 Hon Gerry Brownlee: Point of order. Mr Chair, what does your most recent ruling mean?

CHAIRPERSON (Adrian Rurawhe): I think the member’s been here long enough that questioning—

💬 Hon Gerry Brownlee: I’m not questioning it.

CHAIRPERSON (Adrian Rurawhe): Can you let me actually make a ruling? You know the rules. I have made a ruling. By rights, you know, a member who is as experienced as yourself who then comments on that ruling is, he knows, out of order.

Hon Gerry Brownlee14Hon Gerry Brownlee: Point of order, Mr Chair. As you know, rulings like that become part of the Standing Orders of the House, so far as order is maintained and a debate is participated in by the members. Now, in most cases, we can go to Speakers’ Rulings or to the Standing Orders and we have, in those, adequate opportunity to consider exactly what those printed and published orders and rulings mean. This will be a ruling that now features in the Speakers’ Rulings 2021, but we don’t get that until the beginning of 2022. It’s not unreasonable for a member to stand up and say, “I accept that you have made a ruling. What does it mean?”

CHAIRPERSON (Adrian Rurawhe): I disagree with the member’s characterisation of what’s just happened. This is not a new situation. I have accepted the closure motion, the vote has been put, that’s the end of the matter.

💬 Hon GRANT ROBERTSON: Part 3 of the bill today takes us to the core central bank functions of the Reserve Bank and outlines those in a way that is largely familiar to the legislation as it currently exists. It runs through the obligations of the Reserve Bank to formulate monetary policy. Obviously, it now does that through the monetary policy committee. That was a change made in the first of the three pieces of legislation that make up the reforms of the Reserve Bank that the Government has been working through this term and last term. It covers off the remit for monetary policy. This was the process that, in the last piece of legislation, replaced the policy targets agreement, which was formerly the way in which the arrangements between the Government and the Reserve Bank on monetary policy were set out. We now have a monetary policy remit for that purpose, and clauses 118 through 120 go through the content of that.

There was some debate on the question around whether or not a monetary policy remit, or amending it, requires an Order in Council. The advice, and the advice that I accepted and that the Government accepted, was that at the moment we have to have advice on the remit every five years, regardless of whether it’s been amended, and, essentially, that the Order in Council process was disproportionate to the substance of the remit, which doesn’t change statutory economic objectives. It also would mean that the remit had a different legal form depending on whether it had been issued by the Governor-General before the previous agreement expired or by the Minister of Finance afterwards. So rather than create a situation where there were two different ways in which a remit could be created, we’ve landed on the side of saying that the Order in Council process is not the best way to do that. There is a number of safeguards already built into the system, such as the requirement for the Minister to consult with the bank before amending a monetary policy remit, and, obviously, regular opportunities for Parliament and the Finance and Expenditure Committee in particular to review the processes of monetary policy. So our view is that that particular set of clauses, 121 through 125, are appropriate there.

The Act, as it has always done, obliges the bank to create a variety of reports on monetary policy. Then, Subparts 3 and 4 and 5 are all the bread and butter, day-to-day work of the bank as the controller of money in our system, and so that covers foreign exchange, currency, and banknote handling machines. And then, finally, Subpart 6 of Part 3 is the obligation that the bank has to produce financial stability reports—that it has always had.

This is a fairly functional part of the Act, one that covers off what I think most people would think of when they think of what the bank does. One or two amendments have been made to it, but, by and large, it covers off the material that we would expect to see in a Reserve Bank Act.

In the context of monetary policy, I think it’s very important we talk about the issue of the inclusion or deletion of the word “efficiency” in the remit. I think it’s very important, Minister Robertson, that we recognise that there is a role that was previously set out in the Act that, in promoting the stability of New Zealand’s financial system, it should also promote efficiency in it. That was part of the original remit. Under this new arrangement, “efficiency” is going to be deleted, and as the Minister very clearly knows, this was not widely supported and was certainly opposed by the banking sector, because by removing the word “efficiency” from the monetary policy intent, what that means is that there is no counterbalance towards just making sure that not only do we have a financial system that is stable but we also have no requirement to make sure that it operates efficiently. That’s why the banks in particular were very much opposed to this.

There are real trade-offs in terms—

💬 Hon Grant Robertson: Point of order, Mr Chair. The matter of the question of the inclusion or not of “efficiency” was in Part 2 of the bill. Part 3 simply sets the process around the remit. So we’ve actually already dealt with the matter that the member is raising.

💬 Matt Doocey: Speaking to the point of order, that’s exactly the point I was trying to raise earlier when we had Supplementary Order Papers that hadn’t been debated in the House—

CHAIRPERSON (Adrian Rurawhe): I’ve ruled on it. I have ruled on that matter, as the member well knows. You should sit down. The member needs to link what he has said about Part 2. I’m not going to rule it out, but he should make it relevant to Part 3.

Thank you, Mr Speaker. Well, I think the issue of efficiency is paramount, because we are talking about monetary policy statement here and the operation of it, and part of that operation and how it’s applied is at the crux of this issue. Removing the requirement of efficiency from that is actually quite a significant issue, particularly when it wasn’t supported widely by industry.

I think the big differentiation is when you think about the deposit takers bill. What’s going to happen is, by all accounts, this is going to be taken into account in that bill, which we haven’t yet seen, this issue of efficiency, and that is the problem. Because in terms of the efficient operation of the Reserve Bank, we need a bank, in pursuing its objectives, to have regard for both maintaining financial stability and also financial system efficiency, and those, as I was saying before, are real trade-offs. There is no hook now on the Reserve Bank to have regard for, to take into account, how they manage that trade-off, because the bank will simply be no longer required to have regard for efficiency when it comes to implementing these issues that the Minister’s referred to. I think it’s a fundamental issue that should have been debated and needs to be debated as to why or not efficiency is no longer in there. What certainty can the Minister give us that in this subsequent bill, that no one has seen, we’re going to see adequate representation or consideration of that in the bill that’s to come forward into the House?

Thank you, Mr Chair. Part 3 is very important. In fact, Part 2 was important as well, and the fact that we seem to gloss over a number of parts in less than an hour for a reformation bill that is 30 years in the making, I think is an interesting approach—[Acting Minister for Emergency Management’s phone beeps] Is that something we need to be aware of? Do we need to evacuate the building? Is that a civil defence notification from the Minister?

💬 Hon Kris Faafoi: You’re OK.

I’m glad to hear that.

I’m not sure I heard the Minister correctly, but it seemed to me, in his introductory comments, that he was sort of downplaying the significance or importance of the monetary policy remit. One of the concerns I have had with the framework of this bill and the degree to which we are moving away from the principles of statutory independence of the Reserve Bank from the Minister is that we seem to be going in two directions that are both sort of counter to that. One is the Minister is having a quiet, step-by-step level of influence over the Reserve Bank that I and my party are uncomfortable with, and yet a distancing of this House from that scrutiny as well.

So my first question, as we discuss the process of the monetary policy remit, and why he doesn’t feel that this place has any role to play—I think Mr Bayly’s Supplementary Order Paper requires it to be a confirmable instrument, which I think is an underused form of scrutiny in our democracy. Does the Minister agree that a monetary policy remit is a significant instrument and does have, potentially, quite far-reaching implications for the bank and for the way our economy runs? And, if so, is it not appropriate for this place to have some oversight, and potentially confirm it in the public interest?

To repeat some of the comments I made in my introductory remarks, the issue we’ve got here is the initial and most regular way in which a monetary policy remit will be created—it will be created by the Minister signing that, issuing that, negotiating and discussing it, obviously, with the Reserve Bank at the same time. The issue is that when the monetary policy remit was first created, the issue of how to update it, the decision was made that well, perhaps an Order in Council could be used for that.

As I said in my earlier remarks, you then create two ways in which a monetary policy remit is created. It’s not a question of the oversight of the House per se, because, in fact, in the normal course of events, the way in which a monetary policy remit is created does not have that. It has to be aligned with the rules on how to create and what it contains, but in terms of the oversight of the House per se, it was in fact an anomaly to have the Order in Council process for when, you know, there needed to be an amendment to it.

There is plenty of opportunity for oversight, and the member, both as a Minister but also as a member of the Finance and Expenditure Committee, is well aware of the many opportunities that members have to ask questions about monetary policy. But the truth of the matter is that the monetary policy remit is an agreement between the Government of the day and the Reserve Bank on the way in which the Reserve Bank does its job in terms of monetary policy as outlined in this bill. So I think there’s a confusion about what the concern is here. If the concern here is around the way in which remits are created, actually, the normal course of events is not for the House to be involved.

Thank you, Mr Chair. I thank the Minister for that response. I should make it very clear: my concern is not that this House has oversight over the Reserve Bank, my concern is that this House has oversight of the executive and the Minister of Finance.

That creeping influence that we are seeing by some of the changes in this bill does give me cause for concern. Not of the individual who holds that warrant right now—mostly, at the moment—but of future Labour Ministers of Finance who may not act in a way that’s consistent with the arm’s length. I want to know, actually, what changed between this bill being introduced—and, actually, I don’t think the recommended changes—if memory serves me, we weren’t able to have submissions on this point because the amendment that we are talking about only came through officials to the committee after the select committee submissions process had been concluded. So my question is: what changed? What was the problem the executive is trying to solve with the amendments that were confirmed in the second reading, but through which we seek to improve through Mr Bayly’s Supplementary Order Paper? Because it’s still not clear to me what problem we are trying to solve and why we are so concerned at the degree of oversight of the executive.

Oh, I was waiting for the Minister to stand up and answer that question, but—

💬 Hon Grant Robertson: I’ve already answered it.

Hmm. Well, interesting.

So I think my colleague just made a very good point—this was a late addition by the officials to grant the Minister the power to issue a remit without benefit of a consultation process. So therefore, we don’t really know how people in the banking sector, particularly, view this—other than what we’ve heard subsequently, and in an anecdotal sense. But I think the Minister’s response before is conflating two things: one is there is a normal remit process driven by the Reserve Bank to change, if they so wish, on a five-yearly basis. If it wants to change a remit it goes through a proper process that involves extensive consultation before it comes to the Minister. Now, that is set down, laid out, understood, and subject to wide consultation. The process for that is fine and we do not have an issue with that process because it is one that follows a prescribed arrangement or framework.

This Supplementary Order Paper (SOP) 48 in my name is dealing with the occasional use—and the Minister’s used it once, equivalently, under section 68B where the Minister chooses to make a change to the policy remit of the Reserve Bank. It is not subject to any outside consultation. It may be negotiated between the Reserve Bank and the Minister, but it’s not subject to any other outside consultation, and I’m not sure that it actually be subject to any select committee processes either. So what this SOP is saying is if that is the situation—and hopefully it’s used very sparingly—the Minister should still be entitled and able to do that if he or she so wishes. But if they use it in that extreme circumstance, then that change should be debated on the floor of this House. Because it’s extraordinary, it’s unused, and it’s not subject to any other oversight.

Now, the Minister says it will be subject to discussion with the next select committee. It may be, but as the Minister well knows, the select committees are controlled by the party in power and the opportunity to debate this may be actually quite limited. So what this bill has been very clear about is: if you want to do it, that’s fine—as the Minister, that’s fine. But make sure it goes through a parliamentary process. And what we are talking about is confirmable secondary legislation, which means it can be implemented quickly, but it just must be subject to debate on the floor of the House so it’s very transparent and everyone can see that the Minister made the change—because not everyone follows regulations and all that sort of stuff and knows exactly what goes on in Government. It’s explicit. It’s debated here. It’s confirmed and, obviously, the Minister from the party that controls Parliament and it will be passed. But at least people have the opportunity to debate it publicly on the floor of Parliament, which I think is the proper way to do this type of change to our most esteemed and significant financial institution in this land.

I want to draw the committee’s attention to clause 118 of Part 3, the remit for the monetary policy committee, because it’s important, I think, that the committee understands that this part of the bill changed during the select committee process. As introduced to the House by the Minister, the bill required the Reserve Bank to provide advice to the Minister of Finance before the Minister could issue a remit to the monetary policy committee. As originally presented to the House, the bill required that we deduce—because it was believed that that would allow for a comprehensive consultation process that would ensure a well-informed monetary policy remit. The bill now, as the committee examines it, as reported back by the Finance and Expenditure Committee—on which, of course, there are a majority of Government members—provides for the Minister to issue a remit without first receiving that advice.

So this is a significant change. My colleagues have referred to the implications of this, have constructively provided an alternative mechanism which could be used to fill the gap. But my question for the Minister is: what is the reason for the change from the way he introduced the bill to the way it is now? Why did he see fit to remove that consultation requirement? If he could elucidate on that reasoning I think it would be very helpful, because this is a significant matter. The monetary policy remit, in many ways, is at the heart of what the Reserve Bank does. It has incredibly far reaching implications for the economy; for example, as amended by that Minister, it currently requires the support of the maximum sustainable employment level. There has been much debate about what that means and whether that has encouraged a more expansionary policy from the Reserve Bank, whether it has potentially allowed it to have lower interest rates for longer, and the ramifications of that. So it is a very significant remit. It has significant implications in terms of price stability and inflation levels. The change from requiring consultation to not requiring consultation is significant in that broader context.

I also want to highlight an apparent contradiction, I think, which is that clause 121 of Part 3 is quite specific in that it allows the Governor-General, on advice of the Minister, to direct the monetary policy committee to formulate monetary policy for one or more economic objectives for a particular period of time. So for 12 months, to say “Well here’s a particular thing you’re required to achieve over the next 12 months.”, and it gives the Minister that power. But tellingly in subclause (4), when the Minister exercises that power, he is required to make an Order in Council—the Order in Council is viewed as secondary legislation that is set out explicitly. I think it’s interesting that the Minister thinks that constraint is appropriate for that section, for clause 121, where he’s setting out a short term objective, but is not necessary for clause 118, in departure from how this bill was originally drafted, and I would invite his comments.

The member has hit on the very point that I made in my first intervention here, and we discussed this with Mr Brownlee earlier on for the reason why clause 121 is how it is. And, as I said to Mr Brownlee earlier, in one form or another, clause 121 has existed in the Reserve Bank Act since it began, although not utilised. The point being that the appropriateness of the Order in Council process for this is because that is about the amendment of the objectives of the Act. So for a period of time not exceeding 12 months, you can actually, and have always been able to, amend the objectives of the Act. The difference for clause 118 is that is about the remit, which is the operationalisation of the way in which the Government of the day and the Reserve Bank give effect to the monetary policy aspects of the bank’s work.

As I said in one of my earlier interventions, a way of helping explain to members of the committee is that the monetary policy remit is effectively the new generation of the policy targets agreement. Bill English or Michael Cullen or Ministers before then all went about their business of negotiating a policy targets agreement with the bank and publishing it—that’s what they did. That is essentially the same process that happens with the remit. As I have already said in my earlier calls, what you end up then, with having the Order in Council process in addition to the normal remit process, is effectively two remits issued by two different people: the Governor-General or the Minister of Finance. Actually, the best place for the Order in Council process, as is appropriate, is at the objectives level of legislation, not at the monetary policy remit, which is the operationalisation element of it.

In terms of the other interventions that have been made, I’ll simply be repeating myself that there is ample opportunity for oversight of the work of the monetary policy committee through the Finance and Expenditure Committee, who do it every single time.

💬 Andrew Bayly: That’s all.

And, Mr Bayly, I again take you back to the fact that this is not what Bill English did with the policy targets agreement; there wasn’t a parliamentary moment for that. This is an arrangement between the Government of the day and the Reserve Bank Governor for how they are going to express the ability for the bank to go about its monetary policy work. That is how it has been; that is how it now is. There is opportunity for oversight. There is also the advice that the bank must provide on a five-yearly basis, and if the Minister is going to alter the remit, they have to consult with the monetary policy committee before doing so. This is the similar process we’ve had for a very long time. The anomaly was the introduction of the Order in Council process, which we now don’t deem to be necessary.

With regards to efficiency, ACT believes we should be reinserting this concept. Fundamentally, it was based on making the Reserve Bank better. It would be a measure of how well the financial system performs its functions, thereby contributing to what we hope is a sustainable and productive economy. So it doesn’t make sense to me that there isn’t some sort of formulation reflecting efficiency in that sense. ACT believes that it should be an objective in itself, not merely an analytical consideration, and we’d just like to get your thoughts on that, please.

This is in Part 2 of the bill. The objectives were covered in clause 9. Part 3 of the bill does not cover those matters. I’ve also explained that to the member in the debate we had not today but the previous time we were debating Part 2.

I move, That the question be now put.

The last explanation from the Minister was good and what we would expect but not necessarily agree with entirely. But I just want to speak to clause 117 and the clause 117A. It talks about the bank’s functions “of implementing, in accordance with the Act, the monetary policy formulated by the [monetary policy committee].” It goes on to then, in 117A, talk about the bank is not required to implement monetary policy that is inconsistent with the financial responsibility duties. The question I’m leading to is: at what point does the Minister consider there might be the use of these almost contradictory arrangements inside the bill? Clearly, it’s a belts and braces - type arrangement. I think it would be good to get some explanation of it.

In clause 118, it says that the—well, firstly, 117A refers to the duty of the bank under clause 45, which, of course, we have debated, but to clarify for people: “The board must ensure that the Bank operates in a financially responsible manner and, for this purpose, that it [prudentially] manages its assets and liabilities.” It goes on with some other requirements that they must do. I’m just a little concerned about what would trigger a circumstance where it was considered that the work of the monetary policy committee was set aside because of some other circumstance that occurred within the bank.

It goes on to talk about clause 205A, which is, you know, one of the problems we have: that in order to understand 117A, we have to go through to 205A, which is a new clause, and it talks about the power of the Minister to direct the bank relating to minimum levels of capital and financial risk management. There are a number of other provisions in here that add to that, and in that direction, the Minister could set out expectations as to the bank’s financial risk management. What would have gone wrong in the system to get to this position? Why is it necessary to have it?

If you think about the way this is being structured, we’re going from a governor who has been pretty much all powerful—notwithstanding the points made by the Minister that there have been various provisions in the law for a long time that would allow some ministerial direction—to a point where we have the exclusive powers of the Reserve Bank Governor being shared, at least shared, by a board of people, and we’ve said who those people can’t be but not who those people can be, and then, of course, separate to that, the monetary policy committee, who are setting out that aspect of the bank’s work. So inside this much broader consideration that this Act is going to allow, what is it that the Minister can see might go wrong that would lead to a setting aside of the functions of 117 in accordance with the newly inserted piece of law or statute—not quite yet, but in the bill, the new proposal in 117A?

I thank the member for his question. So this is essentially a clause in the bill that puts in place the operational requirements of having a board, and, obviously, understanding that there were concerns raised by members of the Opposition during the first part of the debate around the question of the role of the board and is it appropriate. But the board now has a series of responsibilities, and this is, I would say at the outset, a highly unlikely set of circumstances, but the advice that we were given was that it was important in order for the board to be confident about the hierarchy of their duties, essentially, that were the monetary policy committee to—and I repeat again. In the highly unlikely event they were to take a decision that would compromise the overall financial responsibilities of the board to run the bank—for instance, a balance sheet - related issue that would make it impossible for the bank to do its job—then this clause 117A then gives them the ability not to implement that decision if that were true. It is, and I want to stress, as the member himself has actually indicated, highly unlikely. It is the belts and braces that he mentioned before. But when one is establishing a board to have the oversight of the operations of the bank, this is a necessary measure.

Simple question that arises out of that explanation is: why is it, then, that clause 205A empowers the Minister to do that and not the board itself?

💬 Hon Grant Robertson: What clause, sorry, Mr Brownlee?

Well, here’s our problem, you see. We’re debating Part 2—

💬 Hon Grant Robertson: No, we’re not.

Part 3. We have a very important clause, that I can see. And it might be technical, it might be belts and braces, but none the less it’s there and it should be considered. But the effect of the bank’s duty to comply with a direction given under 205A—so what the Minister has just outlined is that the board of the bank might determine that the monetary policy committee’s approach to things is not 100 percent, and therefore there needs to be a turning away from that. But the turning away from it is power of the Minister to direct the bank.

💬 Hon Grant Robertson: No.

Well, how’s that work? Why is it saying then that the direction is given under 205A if the board is unable, under clause 45, to exercise its duties?

No, so—thank you. So I simply didn’t hear the number of the clause; that was the reason I asked the member for clarification. So again, what clause 205A does is allow the Minister power to direct the bank relating to the minimum level of capital and financial risk management. The matter we were debating earlier on with Mr Bayly, that would be a material matter in terms of whether or not the bank was able to meet all of its duties, and it would be theoretically possible that the monetary policy committee could take a decision that would impact upon an already agreed minimum level of capital, for example.

Yeah, I want to return to my Supplementary Order Paper (SOP) 48. I just wanted to say that not one member from the Government side has actually stood up and addressed or debated any of the issues of the five SOPs that have been put up. I make that point quite deliberately because in returning to this SOP, which would require the Minister, if he or she put in place a new remit, and it is at their discretion whether they did so, they would be empowered to do so, but it would only be subject to confirmable secondary legislation, which, effectively, means it would have to be debated on the floor of the House.

The Minister made the assertion before—look, in his case he would negotiate with the Reserve Bank board, because it is no longer, probably, with the Government there, it’s probably the board, and then make a determination without any outside consultation. That goes through the House, and, if I understand what he was saying before, that would then have the opportunity to be debated at the Finance and Expenditure Committee.

What assurance can he give—because I’m not sure he can, because there is nothing specified in the legislation or the proposed bill—that actually this would be properly debated, first of all, in the Finance and Expenditure Committee, whether that involved any third parties, particularly if the remit change affected a number of the banking sector, as an example, or perhaps some other organisations? And what is the opportunity in this House other than to ask questions of the Minister? Because, otherwise, we have a substantial change to the direction of the Reserve Bank, premier financial institution, and, basically, under this current arrangement, it all happens and gets done and dusted without any form of debate.

I am literally repeating myself, but the monetary policy remit is akin to the policy targets agreement that has been and was in operation in the earlier life of this piece of legislation. That is an agreement between the Government of the day and the Reserve Bank Governor. The opportunity for scrutiny does come through the parliamentary process. The Reserve Bank Governor and the monetary policy committee’s decisions are debated at each and every term by the Finance and Expenditure Committee. The process of putting a remit together is clarified in this legislation. And this is, I think, the third or fourth time I’ve explained that to Mr Bayly that I don’t believe the Order in Council process is commensurate and appropriate with the remit; it is commensurate and appropriate with the objectives, therefore that is why that process is in there, but is not when it comes to the remit. I don’t think the change here is the characterisation that Mr Bayly has given it—it is simply just not correct.

I want to change tack a little and talk about clause 151, which is about defacing bank notes. This is an interesting part of the Act, which the Minister has chosen not to change in this modernisation. I just want to ask him a little more about that, because I do remember being informed as a young person that it was, in fact, an offence for me to intentionally deface a bank note: to write on it, to rip it, any of that sort of thing. That is, in fact, the case in the bill we are debating here. I note—and for the purposes of all those who may be concerned that they have, in the past, written on a bank note and may now have broken the law and not been aware of that—that that offence does not apply if you have first sought permission from the Reserve Bank. But if you have committed the offence of defacing a bank note, you are liable on conviction to a fine not exceeding $2,000. So you could be fined for drawing on a bank note.

Now, the interesting case in which this could occur, of course, is the artist, who uses the $5 note in all its glory to create a mural or to do some such. The charity auction where someone signs a bank note and uses it for it. The interesting question I have for the Minister is why he thinks that should remain an offence. Because I think we can all understand that offence in the context of subclause (3), which says that if you are defacing or disfiguring the bank note and then intentionally using it to put in circulation or using it to demand payment or using it as a deposit, then that’s not quite right, and I think that’s fine. But did the Minister give any thought to the idea that defacing a bank note—if actually it’s only for your own personal use or it’s actually just for the purposes of raising money for a charity—and not intending for the bank note to be used legal tender in future should continue to be the case—should New Zealanders be very aware that if they write on a bank note tomorrow they are liable to a fine of $2,000?

Does someone want a call?

I move, That the question be now put.

If no one wants a call, I’m going to put the question. The question is that Andrew Bayly’s amendment to Part 3, inserting new clause 118(4) set out on Supplementary Order Paper 48 be agreed to.

Amendment not agreed to.