Financial Markets (Conduct of Institutions) Amendment Bill

Members, we now come to our final debate, clauses 1 and 2. This is the debate on clauses 1 and 2, “Title” and “Commencement”. The question is that clauses 1 and 2 stand part.

I suppose the first question is on the commencement date. The bill provides for a dual commencement date. Sections 16 and 17 come into force immediately, but the rest of the bill, basically, comes in—and it’s been changed from the second to the third anniversary of the date of Royal assent.

So the first thing we’d like to say is: we don’t think it should come into force at all—it shouldn’t come into force. This is a wasted bill that is going to impose millions of dollars’ worth of additional cost and compliance costs on banks and make it harder for them to lend. It’s going to drive up their prices and also make it worse for ordinary New Zealanders trying to access credit. This bill should have been captured under the Credit Contracts and Consumer Finance Act (CCCFA), and we should have done that properly rather than muck that up. And so our first point is it shouldn’t have taken place. We shouldn’t even be discussing this.

But I suppose the issue about extending the date from the second to the third—I know this was sort of a poisoned chalice from the financial institutions’ perspective, because they don’t want to see this come in, but they did try and get to a point of if they had to have it come in, what would be an appropriate date to give time to put all these arrangements in place. But I suppose it gives an issue about if we’re waiting for three years for this bill to come into effect—and the Minister couldn’t even answer some of the issues that will be covered by regulation which he was asked about tonight—then I think: why the dickens are we doing this bill? Why doesn’t the Government take it back, fix it up, and deal with the regulations so that there’s absolute clarity? The regulations and the compliance involved in this is significant. It will require a lot of additional people. Why doesn’t the Minister actually go away, do the homework, get it in place, make it clear as to what’s going to come in place, make sure it doesn’t overlap, or conflict with the CCCFA changes, and actually then put through a good piece of legislation? If he did that, I would think that we may possibly support a bill of that ilk.

But what we’ve ended up with is a double-headed monster for financial institutions, with competing regulatory bodies that are going to have to be accountable for—and I don’t think this will make a jot of difference to people trying to get a loan, trying to buy a house; all it’s going to do is make their loan harder to get and more costly to get. One of the questions I did ask the Minister, which he refused to answer, was: how much additional costs is this going to take and impose on financial institutions who, in the main, do a pretty good job in New Zealand? But we don’t know what it is. It’s certainly more than $1.4 million. Financial institutions do make mistakes. It could have been adequately catered for in the CCCFA. This is a bit of a clown of a piece of legislation.

The question is that the Minister’s amendments to clause 2 set out on Supplementary Order Paper 173 be agreed to.

Madam Speaker, the committee has considered the Financial Markets (Conduct of Institutions) Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.