Financial Markets (Conduct of Institutions) Amendment (Duty to Provide Financial Services) Amendment Bill

I move, That the Financial Markets (Conduct of Institutions) Amendment (Duty to Provide Financial Services) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.

This is a very long title for what has popularly been called the “Debanking Bill” or, more accurately, the “Protection from Debanking Bill”. This bill is all about the ability to participate in a modern economy, because banking services are critical to participation. We all need places to put our money to be able to conduct transactions; to be able to access credit; to be able to buy assets; to be able to establish, operate, and grow a business; and to be able to employ our fellow Kiwis.

Hon Shane Jones: Hear, hear! Jobs.

ANDY FOSTER: How many businesses, Mr Speaker, do you know that have no debt?

ASSISTANT SPEAKER (Greg O’Connor): Perhaps, Mr Jones, you could whisper to your colleague if you want work included in the bill, because it is actually your colleague’s bill, other than yelling it out so that it can be heard at Wellington Railway Station. Carry on.

ANDY FOSTER: Mr Speaker, how many businesses do you know that have no debt? The Department of Statistics in 2022 said that the average New Zealand business, for every $100 in its own equity, owed $202. So what that says is the ability to better borrow is essential to running a business.

Look, it’s right and proper—indeed, it’s fair and reasonable—that banks are able to decline to do business with people or organisations for legitimate commercial reasons. It’s right and proper that they’re able to charge interest rates reflective of the risk that a client represents. But the question that this bill is all about is whether it’s right for banks and other financial institutions to make decisions on non-commercial grounds, when it’s environmental, moral, or cultural.

Now, some people have suggested that banks could simply argue that they’re withdrawing lending from a business or even a whole sector, a whole industry, for commercial reasons, because they see an industry going out of business, because it is a sunset industry and they see it going into the sunset within a short period of time. But that, of course, is a self-fulfilling prophecy. If you remove banking services, you, essentially, remove the ability for those businesses to do business, and of course they’re going to go out of business.

My bill puts the onus on banks that plan to withdraw or withhold a banking service to be very sure that there is a real—and the bill says this—valid and verifiable reason based on financial risk, to withdraw or withhold services. I’ve been asked about the penalty regime and the penalty process. My bill backs that obligation with penalties, and the regime is already in the existing Act.

The Financial Markets Authority (FMA) website says, “The FMA is New Zealand’s financial markets conduct regulator. We’re responsible for promoting and facilitating fair, efficient, and transparent financial markets in New Zealand. … We are dedicated to promoting and facilitating fair, efficient, and transparent financial markets, characterised by”—here is a key word—“fair access”—fair access—“suitable products, quality advice, transparent actions”—that’s important, too—“and integrity.” They go on to say, “Our goal is to ensure New Zealand businesses, consumers and investors”—and here again is critical—“believe the financial services sector works well for them.” Of course, if you withdraw those banking services, it’s not going to work very well.

What is not right and proper is for banks to make those decisions for non-commercial reasons because they do not like the industry or even they do not like the people—as we’ve seen in the UK in one instance. Some—possibly some in this House—will say, “Well, those businesses are bad”—particularly around climate emissions—“so good riddance, and well done to the banks.” But that is a very dangerous pathway, because who is next? Who is next?

The question I put to you, though, is: is that the role of a bank to make that judgment or is that the role for an elected Parliament? Of course, this Parliament has made a decision this year about terminating an industry—that is, the greyhound industry. But we’ve done that transparently, fairly, and democratically. It is very different than the banks making those sorts of decisions, that lawfully established and legitimate businesses should be, effectively, shut down.

Indeed, banking doesn’t just affect the targeted business or sector but all of those around it—their suppliers and services, their communities, in many cases. It affects our economic performance.

One other thing is that we have been struggling as a nation for decades, in terms of productivity. The last thing we need to do is to have our banks, or our Australian banks, hamstringing us any further.

So let’s look at some of the industries who have already been targeted or have expressed deep concern about being targeted, because those industries, by and large, contribute to our economy, they provide vital services, they contribute to New Zealand’s export revenue, and, by doing this, they underpin the living standards of every New Zealander and the tax revenue that pays for the public services we all enjoy.

Well, first of all, there’s the mining industry—and I can hear some nervousness across the other side of the House. Some would wish that the mining industry did not exist, but they still happily, even if unknowingly, consume products made from mined materials.

But let’s say it’s the coal industry that they’re particularly concerned about. Well, the Finance and Expenditure Committee heard from Minerals West Coast and Straterra that some banks prevent New Zealand coalmining companies from accessing some or all of their services for climate change reasons already. We heard from Kiwibank, who said they don’t lend to the coal, oil, and gas sectors. Well, Kiwibank, sorry, that is not going to keep the lights on and it’s not going to keep energy prices down, as we saw last winter, and, hopefully, we don’t see again this winter. Westpac said that they had ceased lending to the coalmining sector, following losses incurred when Solid Energy collapsed. Look, that’s fair enough to say, “Risky business”, but one miner’s failure in a poor market does not mean that other better-capitalised and better-run miners in a good market are the same risk. I have found that some of our Australian banks actually invest heavily in mining in Australia, but they are thinking about that and whether they continue doing that—some of them are thinking about that.

But if your beef is specifically with coal, can I give you a few numbers? It’s worth thinking about global coal production being at an all-time high. In the West, it’s going down, but for the rest of the world, it’s going up faster than the West is going down. New Zealand produces 2.6 million tonnes, approximately, of coal a year. It sounds like a lot, but when you put that in context, China, which is the biggest coalminer in the world, by a long distance, produces 46 percent of all the world’s coal, and that is 4,382 million tonnes or 1,677 times more than New Zealand. Even if you put population, that’s 6.2 times as much. Do you know what? That number is going up all the time. Their growth, since 2007, has been 701 times our entire production. So what difference do we really make in that context?

Perhaps climate-concerned Kiwis would rather that those mined minerals and coal come from other countries—other countries that do not have the same environmental standards as New Zealand does. What about the labour standards? What about the jobs that we export? What about our balance of payments? It’s really, really good that in New Zealand, we shut our own industries down and we buy those products and those minerals from overseas. Because do you know what? We’ve got a balance of payment—oh, deficit, isn’t it? We haven’t run a balance of payment surplus since, what, about 1970? So we need to be firing on all cylinders and not hamstrung.

What about our primary sector, which produces 80 percent of our goods exports? The ANZ told the FEC—the Finance and Expenditure Committee—that they don’t currently apply restrictions to businesses with significant agricultural emissions, and they seemed to put a “yet” warning in there. Let’s be very clear: if we damage or destroy our agriculture sector, we damage or destroy the living standards of every single Kiwi, urban and rural. We cannot afford to do that. According to the Federated Farmers May 2025 survey, which will be released next week—so this is in advance, but they have told me that I can use that—roughly 20 percent of farmers report being asked about their emissions profile by their lending banks, and an overwhelming 70 percent said that they would support—

Hon Shane Jones: Parity.

ANDY FOSTER: —this bill and also Mark Cameron’s bill, which is coming along soon, we hope.

ASSISTANT SPEAKER (Greg O’Connor): Mr Jones, I hope you haven’t changed your seat to improve your ability to get away from the Speaker, but, either way, it is against the Standing Orders. Carry on.

ANDY FOSTER: In summary, the farming sector is worried about banks making lending decisions on non-financial grounds.

And then what about the motor trades industry and petrol stations? FEC also heard from Waitomo. They told us that only their current bank was willing to continue providing finance; the others were not so willing. The BNZ indicated that they would reduce lending to the fossil fuel industry. We’ve had correspondence, as a party, from quite a number of petrol stations, saying that they’re, effectively, asked to pay back their loans over the next five years. Now, think about how hard that is going to be for them as businesses. And just imagine: let’s say all the banks went down the same track and we had no petrol stations in five years’ time.

Hon Member: We’d go nowhere.

ANDY FOSTER: We’re going nowhere, and what does that do to 4.8 million vehicles around New Zealand? Do you know what? We could all use electric vehicles because we’ve got 80,000 of those. How is that going to work? How would New Zealanders feel about their cars, trucks, utes, and motorbikes being unable to be used, and then being unable to get anywhere? What about freight?

There’s a lot more I could say about this. Suffice to say that there is a lot of concern about the behaviour of our banks. This bill is about getting through its first reading and then giving New Zealanders the chance to tell us their stories; to tell us their experiences to the banks; and to make sure that the banks cannot decline to provide banking services, which are critical to running businesses, for non-commercial reasons. I commend this bill to the House.

The question is that the motion be agreed to.

It’s with great privilege to stand up here on behalf of the National Party and say that we will be supporting this to select committee. Let’s have a look at it at select committee because it raises that vexed question—and many of us on the Finance and Expenditure Committee (FEC) and the Primary Production Committee looking in and around banking practices—as its sponsor, Andy Foster, has already raised: are the banks making moral decisions or are they making valid and verifiable commercial decisions? So that is at the heart of this, and that is what we will be looking at, Mr Bidois, and it could arguably be seen as supplementary to an extensive programme of work, Ryan Hamilton, that the FEC and the Government generally continues to do.

And so, James Meager, if you were here last night—I don’t know if you were or not—you would have seen the Holy Trinity of financial services reform, and if you’d read those three press releases out of FEC today, you would have seen that those three pieces of legislation—one is the second tranche of the Credit Contracts and Consumer Finance Act reform—are now open for public submissions for five weeks, and we will be reporting back within five months.

Greg Fleming: Which select committee?

CAMERON BREWER: “Which select committee?” says Greg Fleming—everyone wants a shout-out here. Which select committee?

Dan Bidois: Māori Affairs.

CAMERON BREWER: It could be the Māori Affairs Committee, but more likely—more likely—it’s the Finance and Expenditure Committee.

Of course, this supplements the banking inquiry which was launched, Mr Foster, back in August last year.

Hon James Meager: Is that still going?

CAMERON BREWER: It is still going, Mr Meager, but submissions have closed. Submissions have closed, the departmental report is in, the independent advisers’ report is in, and we are working collectively—aren’t we, Deborah Russell?—and across the Chamber as best we can to put together some solid recommendations out of that banking inquiry, which focuses on banking competition, particularly pertaining to the rural and commercial sector.

This is something that has been exercising committee members past and present, and I want to acknowledge Stuart Smith—is he here?—who was on FEC and who led the charge and took it to the banks late last year. And we’ve had the banks back since, and they have been under the spotlight. The big banks have been under the spotlight. Climate disclosures were raised. The Net-Zero Banking Alliance was raised, and the whole area around risk profiling and lending to rural and the weighting of that and the high equity that farmers must have, for example, to get their loans through, and the wider issue of: is debanking actual, real, or not happening, or is it in our imagination? Is it a moral decision that’s being made or is it a commercial decision that’s being made? That is something that we will be looking at.

Looking back at the explanatory note here—this is a colourful explanatory note, Andy Foster. I actually wish that you had a member’s bill that said something like, “Let’s Not Dig up the Golden Mile Amendment Bill” and “Let’s Not Ruin Lambton Quay When There’s Absolutely Nothing Wrong with It and Not a Paving Stone Is out of Place Bill”, but we’re not going there. But this amendment, as the explanatory note says—and I won’t give you the full name of it; Mr Foster’s already given that, and isn’t he uncanny? He puts it in the tin, he walks out of the library, the bell goes off signalling that there’s a ballot being made. Andy turns around, he’s halfway down the passage, he goes back, and it’s drawn—and it’s drawn. It’s drawn. I don’t know what you call that. In some small countries, that sounds like it’s well organised—that sounds like it’s well organised. I don’t know who he knows in that office, but, anyway, it got drawn very quickly, on 20 February this year.

And so his bill aims to prevent debanking driven by, as is known, political views or environmental social governance (ESG). ESG is what we’re looking at here, and the explanatory note—I have to say, Andy—almost, almost, reads like a press release really, but it says, “This includes the withdrawal or refusal to provide banking facilities and services from businesses on murky”—murky, I don’t know, is that a legal term? I haven’t seen that in an explanatory note before—“environmental, social, or governance moralising.” And it goes on to say, “To provide teeth, the bill creates an offence that provides for fines of up to $500,000.”

Greg Fleming: How much?

CAMERON BREWER: $500,000 is small change for someone that lives in Greenlane—$500,000.

The lawyers and the consultants, of course, have been piling into this, haven’t they, Andy Foster? I don’t know if you’re still on their Christmas card list, but Russell McVeagh, for example, says—and this is why we walk into this with an open mind, as the National Party, going into select committee, because we need to hear on its workability as well, don’t we, Dan Bidois? But Russell McVeagh and Chapman Tripp have raised their concerns, but that’s just their views.

Tom Rutherford: What did they say?

CAMERON BREWER: Well, Russell McVeagh says, “In our view, the Bill as currently drafted is likely to be unworkable in practice, whether viewed from the perspective of financial institutions or their customers.” Then there’s an article here, too, in Radio New Zealand with Andy Foster—a defiant Andy Foster—in the front with his arms folded: “lawyers and financial experts say the proposed law would not stop banks considering climate risks [but] might raise the cost of borrowing.”

Again, this is for the Finance and Expenditure Committee to open submissions and wade through it, and Mr Foster has been very open about that. He said, “Let’s open submissions, let’s hear what the commentators have got to say, let’s hear what the business experts have got to say, and let’s hear what the consumers and small business and farmers have got to say for themselves on this specific issue.” Lawyers say Radio New Zealand and Russell McVeagh and Chapman Tripp have called it likely unworkable in its current form, because climate change does pose commercial risks. And, again, that is at the crux of this whole debate. Are they legitimate commercial decisions, verifiable valid commercial decisions, or is it—as this member’s bill’s explanatory notes suggested—a lot murkier than that? And are banks moralising and making decisions that they can’t justify?

This is something that we will pull apart. This is something that we will look at. We will invite all to submit. We will also be looking at all those submissions, of course, Mr Foster, and we invite you to pore over what’s been submitted, both from the banking sector and the consumer rural and commercial lending sector, as to what they’ve already said on the public record in the banking inquiry. I think from MP to MP, Mr Foster, we want to give you all the support we can. And we know that our officials at Treasury and the Reserve Bank of New Zealand and others have done a lot of summary and analysis of submissions, and we would be very happy for you to have a look at that work to help strengthen up your case, if indeed you feel that it’s worthy—and the House feels and the select committee feels that it’s worthy—to proceed beyond submissions.

The Reserve Bank, as Steve Abel well knows, is already going under a number of reviews at the moment. It’s opened that big capital review. It’s looking at Māori lending, as you know, David MacLeod. So the Reserve Bank is very much looking in the mirror, looking behind it, looking in front of it, and reviewing its practices, looking at its prudential policy, looking at its monetary policy, and looking at whether these issues are real or perceived. That is the challenge of the select committee. The National Party is pleased to support it to select committee. I commend the first reading.

If the New Zealand business community needed another reminder that this National Party is not the party of Bill English and John Key, that was it: a 10-minute call to tell the House why the “party of free markets” is now demanding Government intervention to protect industries affected by the transition to a clean economy. Once capitalists, now an attitude of telling businesses what to do; a little bit of tough talk, whilst, in the background, this Government is the one that has just forgiven the debts of ANZ and ASB to tens of thousands of New Zealanders who are owed thousands of dollars for their loans from 2015 to 2019. “We’ll look tough, but we certainly won’t make those decisions when we are convinced not to do so by the banks.”

What’s the difference here? When first-home buyers and small businesses tell this Government that they cannot access credit, they cannot do business in the New Zealand market because of the barriers they face in this economic downturn of their making, the ACT Party and the National Party throw their hands up and they say, “That’s just how the market works. That’s just how the market operates.” But when big corporate organisations get in beside New Zealand First and they say, “Hey, guys, we need a change here because we can’t get a bank account because we are literally so risky—so commercially risky—that the major banks won’t touch us here and in the Australian market. You need to help us out with that.”, this is posturing 101.

But, for years, the Labour Party has argued that banking should be more accessible and affordable for Kiwis, and here’s what that looks like. If that was a Government that was interested in it, they would be pushing for more competition in the market, they would be making sure that everyone who needs a bank account can get one when, in fact, thousands of Kiwis cannot get one. Those are people facing homelessness, getting away from domestic violence situations, getting out of prison. These are still people who cannot get bank accounts, and this bill does nothing for them. They would also be focused on solutions like the expense of remittances in the New Zealand market, which I have a member’s bill that they could help skip the ballot. There would be a number of small interventions that they could actually do to help people who face barriers to accessing credit.

But, no, instead they’ve identified a small part of the market to launch just another ideological culture war on. This is not a bill which solves a real problem. This is a bill which signals some sort of action on banks—we don’t know what it is, but we look scary. It’s going to go to select committee and we will be looking at it with interest. Because, you know what? There are a number of changes, Mr Foster, that could be made to this bill to actually help the people that you say you are trying to help: people who need bank accounts who don’t have them yet. You know what the barriers for them are? Not that they’re being debanked, because you’re asking the question about who has been told by their banks that they are so risky that they cannot have bank accounts, people who could never get them in the risk place. Young people who are facing homelessness and do not have an address cannot get access to bank accounts that they need to participate in the system—that is a social justice issue as much as it is an economic issue. There are people in the electorate of Manurewa who my electorate office are helping right now who do not have access to bank accounts. If we are serious about banking access, we would design a bill to help them. That is what we should be focusing on in this. This is not just another side of a culture war; this is an issue which seriously affects people.

That is a Government which promised it would solve the cost of living for them. At the election campaign, they campaigned on bringing the cost of living down for those people. Instead, they have picked a small number of industries that do not have a problem making money and a big bank to go after as the villain. Are we meant to believe what the National Party is suggesting to us, that a few months after calling it a cozy pillow fight between the most profitable banks in any jurisdiction we like to compare ourselves to, the banks are actually sacrificing their profits for woke ideology? Are we meant to believe that after the finance Minister called them out for their excessive profits in the New Zealand market as compared to the Australian market, actually, the New Zealand banks are so gentle and kind that they have been giving away their opportunities to make money out of industries just out of the goodness of their heart and because they’re bleeding heart liberals? That does not make sense. This is not a problem that we can solve with this sort of ideological culture war. This is a problem we should be solving, but Andy Foster’s bill doesn’t do it.

I feel really bad for the member Andy Foster because no matter how reasonable he tried to make this bill sound in his first reading speech, he kept being undermined by his own colleagues with interjections. It reminded me of even the Deputy Prime Minister’s own commentary on this bill that completely derails it from what I think was an attempt at making a cogent contribution on this nonsense of a bill, because we’ve got the Deputy Prime Minister, who was not, obviously, reading from the same song sheet as Andy Foster, talking about the globalist agenda that he’s going to be ending with this bill, which, obviously, wasn’t reflected in the discourse by the member. So either they’re not talking to one another, or this bill will be helping Winston Peters’ Twitter engagement far more than everyday consumers.

This is clear when we realise that yesterday—just yesterday—the Government was actually supporting a piece of legislation that would have undermined countless consumers who have had a class action taken against the Australian banks ANZ and ASB, which themselves admitted with the Commerce Commission that they had failed to take the necessary care of a responsible lender. It’s so clear to me that this is a Government that cares far more about virtue signalling than actually addressing the needs of consumers and everyday people.

It’s so obvious, and it should be so obvious for those members, that under the free-market, capitalist society that we live in, banks are probably not stupid—and I’ll be the last one to be defending these banks. But I think the people who are running the big banks are not stupid, and they are taking measures to stop investing in things that drive climate change and industries that are not for the future, like fossil fuels, and now we’ve got a really heavy-handed intervention here, supported by the National Party, to actually force the banks to take fiscally nonsensical decisions. This is made even worse by the fact that this is driven by climate-denialist rhetoric and a complete disregard for the evidence that climate change does not risk just banks’ profits but our livelihoods and the communities that we’re supposed to represent. I think those members should be taking this issue with the severity that it deserves, rather than pretending that the mining industry represents the big picture of our economy when it actually doesn’t compare to other industries—no matter what they try to say—and even with their interventions that they’re making, the mining industry is unlikely to become as major a player as other parts of our economy. So this is just fiscally illiterate rhetoric from the Government members.

This bill is, obviously, not supported by us, because, at the core, these banks are making calls right now on “What if?”, and it’s not a safe investment for them in the context of our changing climate and economy. Banks and other actors are slowly waking up to the huge climate risk on their balance sheets, and regimes such as the climate-related disclosure framework are assisting in making these risks more visible to businesses and investors. I just think that, at the end of the day, the Government members—including those on the backbenches—could either be far more effective campaigners and lobbyists to convince their members in the executive to take action to actually support consumers, or bring in members’ bills that address real issues by people.

I acknowledge that where there are good ideas from members of the Government, when it comes to members’ bills; we’ll be supporting them to either get the scrutiny that they deserve at the select committee stage or go all the way, as they have done for some of our bills when they have thought that the bills had merit. This should be the space that we work in. But we can’t be supporting a piece of legislation that goes against the best available science and evidence, that undermines progress on one of the most existential issues that we face, and that I think just wraps up the Government members in a bunch of contradictions over their belief in the free market.

This bill just makes absolutely no sense. It has no evidential basis behind it, and I think Andy Foster’s rhetoric is undermined by the realities that, actually, this is driven by members of his party who would rather keep yelling “Coal, coal, coal” over and over and over, as they are drowned by rising sea levels. We look forward to changing this Government and getting rid of these climate change - denialist members of Parliament and supporting policy that actually helps the cost of living, that drives down inequality, and that creates an economy that works for everyone by taxing the wealthy few—including many members on the other side of the House.

Thank you, Madam Speaker. I’m pleased to rise on behalf of the ACT Party to provide our conditional support for this bill to progress to the select committee. We believe there are a number of issues to do with the availability of banking that do require the thought and the debate that the select committee can provide, and, hopefully, provide a reworked bill that we could support past the first reading. Fundamentally, at the ACT Party, we believe in only intervening in the market where absolutely necessary. This bill’s main action is that financial institutions must not withdraw or refuse to provide financial services except for commercial reasons. Now, in most circumstances we would be of the view that it is the free choice of any business as to whom they engage with in business and whom they don’t, and if they want to stop an arrangement, then they should—they’re free to do that, so long as they follow the contract. Again, that is their choice.

However, there is a real concern that has emerged through the banking inquiry at the Finance and Expenditure Committee around the practice of a number of banks making loaning and servicing decisions based on wider environmental, social, and governance (ESG) matters. There is the question of: do we really have that much competition in the banking sector? Members opposite have talked about: what about the free market? Yes, the free market works really well—where you have good competition.

Now, particularly as a farmer, my choices are really limited as to what options I have for banking. The level of competition that others in this House may experience with their home loans and the good competition that exists there does not exist for rural banking. Just to add to the level of concern around competition, we have issues with the banks signing up to such initiatives as the Net-Zero Banking Alliance, and thus the Commerce Commission is investigating as to whether or not that is market collusion. Also, collusion dampens competition. Whilst we’re working on things such as open banking, we are not there yet, and it remains to be seen whether or not the improvements to banking competition through open banking will apply to farming, mining, and other industries. Or will it just be focused again around home loans?

Another solution to enable much-needed access to capital, for farming especially, would be the relaxation of foreign investment rules. End of the day, is there a difference between me having capital in my farm from an Australian or a Dutch bank or any other overseas investor? Our strict rules in this regard do hinder the ability of farmers and others to access capital, so we operate in an environment where competition is hindered.

The other point I would make is that it is so hard—and previous speakers have made this comment—if not impossible, to exist in modern society without banking services. I myself came afoul of anti - money-laundering rules last year, when I forgot to send in some paperwork to my bank of 40 years to let them know who I was, and so my accounts got frozen for several days until I was able to resolve the situation. They did say, “We sent you an email”, and I said I was having eye surgery on that day so it was a bit hard to read. That experience of just a few days without banking services really brought home to me how difficult things can be if you don’t have those banking services.

Finally, I’d say access to capital is critical for investments into businesses to be able to improve your productivity. Now, around this House, whether your political goals are to double export growth, to create new jobs, to have better-paying jobs, or to lower the cost of food, investment is needed, capital is needed. You know, if we constrain access to capital, we constrain all of that. So, given the challenges around meaningful competition, we think it is right that the select committee should explore the question: do financial institutions have a duty to continue to provide financial services to their customers even if they happen to work in sectors that the bank may no longer approve of? If the business is engaged in lawful activities, who are banks and financial institutions to be our nation’s moral arbiters? I commend this bill to the House and look forward to the discussion from the select committee.

Kia ora e te Mana Whakawā. I always find it interesting going after the ACT Party, the party of freedom and rule of law and sanctity of contract, and here they are into voting in favour of a bill that intervenes in contracts. This is not a hypothetical question. There’s a case called the Bank of New Zealand v The Christian Church Community Trust and Others, and the Christian Church Community Trust was debanked by the BNZ. The BNZ said, “We’re not going to bank you any more; we don’t want to be your banker.” For whatever reason, they gave them an appropriate period of notice and said, “We are not interested.”

Now, the Christian Church Community Trust is better known as Gloriavale, and the reason—the pretty clear reason—that the BNZ wasn’t particularly interested in banking Gloriavale is because it’s a place which, basically, engages in modern slavery, flouts health and safety laws, and is a centre of abuse. Now, to say that BNZ should be compelled to bank Gloriavale, despite the abhorrence of the activities there, frankly beggars belief because that, in Andy Foster’s words, would be the bank following some woke environmental, social, and governance goal. Well, for a major financial institution to say, “We will not be complicit in an organisation which is premised on modern slavery, abuse, and victimisation of its workers.”, frankly, is the kind of society I want to be in.

That’s not the only case. Targa Capital Ltd v Westpac New Zealand Ltd—Targa was a company which had branches in Australia as well, and in Australia it was in breach of Russian sanctions. Now, the New Zealand entity may not have been in breach of Russian sanctions but, in that case, Westpac said, “We’re not comfortable banking a subsidiary where the parent is supporting a foreign nation aggressor that is invading the Ukraine.”

Steve Abel: Woke!

Hon Dr DUNCAN WEBB: “Woke”, the ACT Party says. Yeah, well, that’s where we’ve come to. There we have it. There’s a third case: E-Trans International Finance Ltd v Kiwibank Ltd, where E-Trans were money remitters and no one could tell who the money came from or where it went. In that case, Kiwibank wasn’t happy supporting an entity which couldn’t convince it that it wasn’t helping money launderers. Now, that’s not woke, thank you. That’s not some woke goal; that is responsible corporate citizenship.

Those are three cases—cases which have got to the courts and in some cases the highest courts. This bill would say, “No, you’ve got to bank these people who are engaging in activities that I think everyone in this House would agree are utterly reprehensible.”

Now, this bill looks like it’s going to get to select committee. I hope that you’ll look at this bill and take the advice, as one member said, of Russell McVeagh and say that it’s unworkable, that it makes no sense, and, in fact, it undermines freedom of contract, that it’s a fundamentally bad idea, and we won’t be seeing much more of it.

Thank you, Madam Speaker. Look, I was going to start with the end, but I’ll end with the start now. To talk to the previous member the Hon Dr Duncan Webb’s comments, around the three examples he gave—well, we’d actually agree, and there’s actually a caveat in this bill, in new section 446JA(2)(a), that says—and I quote—“for a valid and verifiable commercial reason; or (b) as required or permitted by any other enactment.” So, in cases like those, they’d be justified in not banking those entities, and so we’d support that. The challenge, of course, is how we define what is “verifiable”, and what is a “commercial reason”, and that will be the work of the select committee. I admit I was a little bit cynical about this bill because we’d just come through the banking inquiry, and it kind of felt like maybe we’ve covered this off. But you know what? Maybe we haven’t dug deep enough. So we’re going to take this back to select committee and we’re going to do some “scrutinisation”, as my friend Cameron Brewer would say. It’s really important.

But one of the things about the purpose of this bill is it talks about preventing them from withdrawing or refusing services to customers based on political views or environmental, social, and governance factors. Imagine if we couldn’t bank someone because of their political views. Imagine if there was a bank for the Labour Party. You can only go to this bank and withdraw money if you’re a member of the Labour Party. Or you can only go to this bank if you’re a member of New Zealand First, and Shane Jones would be sitting behind the teller there, checking your membership. Or you could have the bank of the Green Party—the only trouble is they wouldn’t have any money to lend you; that would be the only issue there. But this has been a work of the Finance and Expenditure Committee (FEC) over the last eight months, because we’ve been looking at how do we make the banking sector more competitive. And the former speaker the Hon Andrew Hoggard said previously, we do like free markets, but they have to be competitive—and that’s what we’re all about, is ensuring there’s adequate competition.

Through the work of the FEC, we found some really interesting things. We’ve got a lot of work around the Reserve Bank of New Zealand, they’ve said they’re going to come back and look at the capital requirements, they’re going to look at the use of the word “bank”, they’re going to look at the tiered capital proportionality so that start-ups—most start-ups in New Zealand, to be banked, need $30 million; that’s quite a high barrier to entry, so they’re going to be looking at that. That’s really cool. That will have a flow-on effect in the banking ecosystem. We’ve just made legislation—the Consumer and Product Data Bill—which is the forerunner to open banking, and that was going to be in train for middle of next year; our Ministers have said no, we’re going to accelerate that and bring that forward to December of this year—

Tom Rutherford: Oh, fast track!

RYAN HAMILTON: Fast track the open banking. That’s going to make the opportunity for the interface of retail banking for consumers much more competitive. Instead of taking three days or three weeks to get another mortgage offering, you can be done within 30 minutes. That’s going to provide real competition at the front end.

The other thing which is real exciting is the Financial Markets Authority. They’ve created this thing called a “sandbox”, where they’re trialling six start-up digitechs or fintechs. One of them—and this might be a revelation for some of the members of the Opposition as well—called IndigiShare, in that they call it “koha loans”, where they’re actually trying to support Māori businesses with lending, and they’re in the sandbox, so they get to trial it and pile it and test it, and see if it will work without the risk of failure, because the Financial Markets Authority is creating guardrails for six different entities to test these things. That’s awesome! That’s awesome for Māori business. Willie shakes his head, but next week he’ll be shouting and going, “Oh, check out this IndigiShare. It’s awesome! It’s awesome!” You watch! You watch him. And then the Speaker will remind him to stay focused on the bill. But that’s very important.

Another great one is HomeShare, for example—a young entrepreneur, who actually happens to come from Hamilton, which, by the way, is New Zealand’s fastest-growing city, the city of the future. But we know that home affordability is hard for many people in New Zealand. If you think of a million-dollar home, it’s going to be divided into 1,000 shares, and so someone can buy one share or two shares and actually get in the housing market and earn equity on those shares. They’re dividing houses into, as I say, 1,000 shares. It’s another little awesome innovation. This is at the entrepreneurial, innovation end of the banking sector. If we get those things up and running, that’s going to create real competition in the banking sector. But, of course, we need to hold these banks to account, and so we will support this to select committee, where it will undergo robust scrutinisation.

Thank you, Madam Speaker. I also wanted to just take this opportunity to thank the member Andy Foster for bringing this bill to the House and to congratulate him on the good luck of having it drawn from the biscuit tin so that it could come to the House tonight and be debated.

Given that it’s nearing the end of contributions on this bill, I thought it would be good to look at a couple of things, from a perspective of sort of debunking some myths about debanking. I think the first thing to consider is: what does this bill claim to be? Mr Andy Foster’s bill aims to prevent financial institutions from withdrawing or refusing services to consumers based on non-commercial considerations. The bill seeks to address the growing issue of debanking, where financial services are withdrawn from individuals or businesses based on political views or environmental, social, and governance criteria. The bill goes on to emphasise that access to banking services should be determined based on legal or valid commercial grounds, not moral judgments. It’s good to have that information and great, also, to have received a letter from Mr Foster today detailing some of the engagement he’s had with individuals, with industry, with a number of people who have talked about the challenges they face.

I’m going to say that it’s possibly, or probably, a well-intentioned bill, submitted for the right reasons, and Mr Foster delivered a robust and thorough speech, but there is a number of problems, and here are just some of them. The bill suggests overriding the default position at law, which is a little bit of a challenge. It’s definitely focused on fossil fuel interests and not everyday Kiwis. It actually does less to enable everyday Kiwis to have access to the banking services they need than it does to provide protections for the fossil fuel interests and industry. Now, the reason I raise that is that banks are responding to climate risk because it is a commercial reality. That’s why banks are responding to it, and that can be seen as a good thing as opposed to something that we need to legislate around.

Another member spoke this evening and drew attention to the fact that there are actually a bunch of people in New Zealand, in our communities, who can’t open bank accounts currently. Those people are prisoners, people who have recently gotten out of prison, young people with no fixed abode or address. They’re facing some very real challenges, and opening a bank account is another one of those challenges. This bill, if it was true to its stated intent, would actually address that and provide a service for those people and access for those people to have a bank account, but in fact it doesn’t do that. The argument, I think, it would seem, is that all people, all entities—the argument being made by this bill—should enjoy the same access and rights to a bank account, the same access and rights to be able to access and transact their funds.

I think there’s some interesting timing here, on the eve of Budget day and speaking about bank accounts and equity and rights, because the same member who put this bill into the tin, which has been drawn and been debated tonight, seeking this equal access, has also very recently, in fact only a couple of weeks ago, supported halting pay equity claims for 180,000, mostly, women—180,000 of our lowest-paid workers. Whilst this bill argues that everyone should be entitled to a bank account, the argument is also being made that women should get less money in theirs. Tomorrow, we’ll find out what the money they’re not getting is going to be spent on, in tomorrow’s Budget. I cannot commend this bill to the House, because I don’t think it does what it says on the tin, even though it was pulled out of one.

I rise to actually speak to support the Financial Markets (Conduct of Institutions) Amendment (Duty to Provide Financial Services) Amendment Bill progressing to the Finance and Expenditure Committee. Now, this bill raises a very important and timely question, one that has been in the media and with many Kiwis and New Zealanders having an attention on the banking inquiry: should financial institutions be able to withdraw or deny services to day-to-day New Zealanders based on political views, industry affiliation, or ESG—which is known as environmental, social, and governance—considerations, or simply because they don’t sit on the same side as banks or if banks don’t think that they are the “good” businesses?

But the reality is there are individuals and businesses across New Zealand who are increasingly concerned about their access or their future inaccessibility to banking and financial services because they’ve been unfairly restricted; so whether it’s sectors like—as members have mentioned before me—farming or firearms or fossil fuels, or simply, as some people have put it, to be unpopular views. Please, can I make a note here: it’s not just about climate. It’s not just about businesses that seem to be, according to some Opposition members in this House, anti-climate—it’s not about those industries. It also includes other sectors and businesses who have a genuine idea about making business and obviously have suppliers and consumers who needed that business, but those often have unpopular views by some and those that are impacted and, therefore, have no ability to continue to bank. Now, that is not a healthy banking system that New Zealanders can have confidence in.

Let me be very clear to all those speakers before us: we are not here today—and to people tuning in on TV—to actually pass any judgment on banks or to pass any legislation. We’re not rushing into regulating banks for the sake of it. But we have a duty to scrutinise and to listen to consumers, to listen to New Zealanders about what they believe is a healthy and fit framework that will be fit for purpose for New Zealanders to continue to bank.

We also acknowledge that financial institutions should have the ability to continue to manage risks and make decisions that are commercially sound, but they shouldn’t be, I think, handcuffed to popular views or to go in with a certain trend—for example, like the ESG—and to disallow services that don’t really quite fit with the “valid” trends that are in our market. But banks should be allowed to have the ability to continue to validate and also verify proper, healthy commercial reasons for our open market.

There are concerns raised in the bill, as some members have also mentioned before me, like, for example, what about a potential overlap with existing legislation that we already have in New Zealand—for example, the Companies Act. Now, there are also questions raised about whether this bill will unintentionally capture entities like insurers under the CoFI regime—CoFI here is the conduct of financial institutions. I am aware many Kiwis watching on TV probably don’t really understand the acronyms that we often use. It is the conduct of financial institutions. So whether or not there are overlaps or complications or duplicate work or inefficiency because of the duplication, these are the questions that we should ask the select committee to understand and to make sure that we are not duplicating the work or wasting public resources.

So we must be very careful when we consider the unintended consequences—for example, the increase in compliance burdens or higher consumer costs or the risk of legal uncertainty. But these are all risks and they must be worked through methodically. But our bottom line is that New Zealanders should have fair access to financial services. This is why, as a member on the Finance and Expenditure Committee, I do support the bill on this very first reading: because I’d like to see it go through to select committee; I’d like to see the public coming in for their submissions on their views, on their recommendations, but also providing some examples of how we can provide a healthier and better financial market going forward. Therefore, I commend this bill to the House.

The—

Andy Foster: Madam Speaker?

DEPUTY SPEAKER: Oh, sorry, yes. Andy Foster in reply. How could I forget?

Thank you, Madam Speaker. Look, just responding, and thank you, everybody, for your contributions to the debate. I’m going to start off with the comments around Russell McVeagh, because it’s interesting that when you look at what they have said on their website around this, they are saying that climate change can cause some risk around some businesses. If it causes risk to that particular business, to that particular investment that’s being made, sure, you would take it into account, because it is about the risk to that loan and being able to get that money back again. But if you were saying that investing in a particular business is going to change the world, save the planet, whatever it might be, that is a very, very long bow. For example, if it’s the coalmining industry, you would say—well, look at New Zealand, as I said; China produces 1,677 times more coal than New Zealand does, so we are not going to move the dial there.

The second item that I wanted to raise: quite a number of people raised issues around competition, particularly the ACT Party. The reality is that we involve ourselves, as a Parliament, in the financial industry in many different ways. For example, the Hon Andrew Hoggard talked about the anti - money-laundering process and having his accounts shut down. I can tell you, that is a labyrinthine, horrible process to have to go through, and that is this Parliament intervening in the banking industry; we do it all the time.

One of the other things that came up is around the issue of free markets and Government intervening. Well, if you are David it’s hard enough when you’re facing Goliath, let alone when there’s a cosy cabal of pillow-fighting Goliaths—and there are four of them there. That is a really tough thing. If that is what a free market looks like, that is a real challenge for the small businesses. Actually, it’s really funny seeing the Opposition standing up for the big banks against the small businesses and against the farmers, because what we heard from them is that this all about fossil fuel - emitting businesses. What about the farmers? Well, there might be a bit of methane in there, but if we crucify our farming industry, we crucify this whole country. They don’t seem to recognise this.

Speaking of the Greens, we got a little bit of a lecture about financial literacy from the Green Party. We were in hysterics before about some of the previous legislation—this is an example of comedy hour, when the Green Party are trying to lecture anybody about financial literacy.

There was concern from Dr Duncan Webb about some businesses, and I think quite rightly so, of which he said, “Well, these aren’t really legitimate businesses doing legal work.” I would agree with that, but what I said, consistently, is that it’s about making sure that banks are not penalising lawful, legitimate businesses. The examples that he gave of breaching sanctions against Russia, of the Gloriavale community, hardly fit into that context. If those are things that need to be written out as you go through the select committee process, then have a look at those things to try and make sure that you are able to do that.

Would the banks sacrifice profit for environmental, social, and governance reasons? Well, I think that they would. Why would they do that? It’s because they are concerned about their image and the pressure they are getting from some parts of our community. Oh, and by the way, one other thing is that they also get pressure from the Parliament, again, because they are required to report on not just their emissions but the emissions of their customers. So when they’re required to do that—now, that, of course, is a bill that Mark Cameron has got into the tin, which is about saying, well, actually, that is unreasonable, because the banks themselves might not be producing a lot of emissions but their customers might be, and yet they’re being required to report on that and then they’re putting the squeeze on their customers. Is that a particularly sensible thing to do?

Then Ryan Hamilton talked about whether the Finance and Expenditure Committee (FEC) has covered these issues. It’s a fair question. I mean, I only sat in on FEC for I think it was a day and a bit, but what I did hear from people who were submitting to FEC were real concerns about these issues. I would suggest that if you’ve heard them, you haven’t fixed them yet, and we do need to fix those, so this in a sense is a response to those issues.

I thank people again for their contributions to the debate. I look forward to hearing the submissions when this bill goes through its first reading. It does give our community the opportunity—and that includes the likes of Russell McVeagh, it includes the likes of the banks, it includes our farmers, it includes our Motor Trade Association, it includes our miners, it includes the sex industry, it includes all of these people, who can tell us their stories. You can have a look at what changes need to be made to the legislation to make it work. But what is very, very clear to me is that banking and financial services are utterly essential to anybody doing business in our modern economy, and for banks to be able to deny legitimate and lawful businesses the access to those things because they’re big, because they can, because they feel the pressure to do so, that is a real problem to our economy and a real problem to those businesses. I commend my bill to the House.

The question is, That the Financial Markets (Conduct of Institutions) Amendment (Duty to Provide Financial Services) Amendment Bill be considered by the Finance and Expenditure Committee.

Motion agreed to.

Bill referred to the Finance and Expenditure Committee.