Financial Markets (International Money Transfers) Amendment Bill

I move, That the Financial Markets (International Money Transfers) Amendment Bill be now read a first time. I nominate the Governance and Administration Committee to consider this bill.

This bill is a simple one in its purpose, but important in its effect. It’s about fairness, transparency, and making life a little bit more affordable for New Zealanders who are already doing it tough. These guys are doing it particularly tough; it’s about our migrant workers, our cleaners, our nurses, people who are in Aotearoa doing the mahi and paying a little bit every week for their family offshore. Maybe it’s our Pacific migrants in South Auckland who are working those jobs which we really need them to work—they are the backbone of the South Auckland economy—and perhaps they are paying a little bit to their mum every week or perhaps they are making a transfer for their retirement.

Whatever it is, at the moment they are paying more than almost anyone in the world for that service because the fees that are being advertised to them are very unclear; they’re not transparent and there is not a point of competition at the point of sale. Often, these people, who are some of the most vulnerable workers, are provided with very little information and that information is misleading about what the fees are because it is perfectly legal in New Zealand to say “zero fees” when all of the fees are hidden in the forex spread. This is a market which is not working and this is a bill which makes a simple change, fixing that up so that we can have a competitive system and so people can get a fair deal, shop around, and get what they’re owed.

While we’re debating this bill, fuel prices are soaring, households are under pressure, and people are finding it harder and harder to make those choices every week. This is a cost of living measure because it will cost people in this situation thousands of dollars every year if they are sending regular payments every week, or, for the grandfather who came to my office for help from his local MP because he thought he had been scammed when he sent a large amount of savings back to where he was from to his daughter—he thought he had lost $13,000 in that transport. When we started helping him with a scam claim with his bank, we discovered that actually what had happened is that that was the fee which he was charged to make that payment. That is wrong. We can fix that. This bill will go some generous way to making sure that services that are better for catering to his needs have a foothold in this market and fintechs can compete for those services, and that those fees have to be actively disclosed to him at the point of sale so he would have known what he was being charged and didn’t hear about it weeks later from his daughter on the phone. It was incredibly difficult for me to work through with him because after we had helped him understand that he felt shame. He doesn’t want to talk about it anymore because it is something that he deeply regrets.

This is something which is not only costing New Zealanders, but it is robbing them of dignity; robbing them of their money and robbing them of a feeling that they are in control of their own financial affairs. That’s what happens when you have markets which don’t work for consumers, when people are paying whatever kind of fees that rob them of the certainty that when they are advertised a product they will pay that price. Things like dark patterns on internet transactions where you sign up for a concert ticket, you expect to be paying $80 for that and then you’ve added on concert insurance, you’ve added on the credit card fee, and you’ve added on another fee for the merchant, and all of a sudden that concert is $120. Things like that, which make people feel like transacting online, transacting through some of these services is all a bit hard and further robs them of the ability to participate in what is simply financial infrastructure. Just like we should view the Government’s role in providing roads, schools, and bus routes for people to get around the city to live their lives and to do business, we should also see this as essential financial infrastructure that everyone should be able to participate in.

I know every party in this House can agree about those critical services which mean that people can transact, can buy products, and can participate as full citizens in the New Zealand economy. This is one of those things. It’s a particular thing for people who have been left out of the decisions about consumers. They’re not often prioritised. These are migrant workers. These are people who are some of the most vulnerable workers. These are also people who—say, our Filipino community, many of whom are health workers and work in incredibly important jobs and will be making these payments regularly. For many of them, they’re pretty tech savvy and able to use many of the tech services. But for others, where there are barriers to them accessing those kinds of financial technology services which are targeted at this and bring rates down, they’re also seeing on shopfronts in their communities rates that are advertised to them as if they are low, but they are not in fact low. They are coming from a jurisdiction which legislates and regulates this much more closely than we do, so the level of trust in the New Zealand system is actually too high, coming from their jurisdiction which has proper rules in place like this. New Zealand isn’t doing its part for these people who are working really hard in the jobs that we need them to. This is a simple fix that we can make here.

It’s also not just about migrant workers; it’s also about any New Zealander who buys anything online and anyone who goes away on overseas trips or goes to see family overseas. If you’re in Australia and you’re converting New Zealand currency to Australian currency, you’ll be paying, often, more in New Zealand than you would do to convert it the other way in Australia because, at the moment, the way that our fees are regulated means that there’s not transparency—but there are those sorts of rules in Australia. It’s really important that we at least line up with different jurisdictions to make sure that New Zealanders can get a fair deal on our shores. Then New Zealanders wanting to buy things overseas are also well served by our rules and regulations here.

This is one simple way that the rules are stacked against people who are just trying to live their lives and buy products that are overseas and enjoy the hard-earned money that they make. This is something which is very profitable for many of the services that offer this.

It’s really unclear, for people who are using them, that that is the case and that it is actually really profitable if they continue to use them in that way. I hope that this clear change to the Financial Markets Conduct Act 2013, requiring upfront disclosure, is something we can agree on around this House. I’m very hopeful that this is something we can work through at the select committee stage to also raise this issue as something that has cross-partisan support and will stick, because there are thousands of people right now who would benefit from this change. It’s something that I hope we can all be talking about with the people in our communities who need to be able to see this change.

For migrant workers, at the moment, things are tough. For Kiwis who have small businesses that are transacting offshore, things are tough. This is one simple measure where we can say the cost of these services should not be borne by you. You shouldn’t be cross-subsidising other services offered by financial institutions, because you are doing this; you should be paying what, say, Australians are paying and what, say, Americans and people in the UK are paying, and that is not the case now. That is something we can all fix tonight, working through the submissions and getting the bill and regulations planned out that we can all support. I hope we do that. I commend it to the House, and I encourage everyone to vote for this cost of living measure.

ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.

Thank you, Mr Speaker. It’s great to stand up and talk to the Financial Markets (International Money Transfers) Amendment Bill, and I congratulate the sponsor, Arena Williams. I also want to follow in her tribute earlier on the late, great Sir Barry Curtis, long-time Mayor of Manukau City from 1983 to 2007—24 years of building Manukau—one of our great civic leaders in Auckland and someone who leaves an incredible legacy behind. Condolences to Sir Barry Curtis, aged 87, who lived a very full life of community service. For those of us that remember, in the 1990s and 2000s, getting around Auckland—as you would, Mr Speaker; I’m not trying to age you—Sir Barry would recite his introductory comments and greetings, every Pasifika greeting that ever existed, as part of his repertoire. Here’s to Sir Barry Curtis.

The National Party won’t be supporting this bill, and I’ll take you through that shortly. I’m pleased that it is going to be referred to the Governance and Administration Committee by the sounds of it, and I want to also acknowledge the Governance and Administration Committee deputy chair, Tim Costley, and the whole committee that today launched a parliamentary inquiry into Fire and Emergency New Zealand’s (FENZ’s) fleet issues. That was following a motion, a very proactive motion, that was put on the Table by Tim Costley earlier, deputy chair and member up the Kāpiti Coast. Well done, Tim. I wish the committee all the best with its endeavours on its parliamentary inquiry into FENZ.

As the previous sponsor’s already articulated, the financial markets amendment bill—let’s just call it that—proposes to amend the 2013 Financial Markets Conduct Act, claiming to require greater transparency of international money transfers. It requires of financial institutions fair-conduct programmes to ensure that customers are provided with full disclosure of fees and costs associated with international money transfers. I don’t think anyone would disagree with more disclosure and more transparency around fees and costs pertaining to international money transfers.

I come with good news—I come with good news. Help is already on the way, and many members will recall that we are in the process of passing, through this Parliament, three bills regulating our financial services sector—a trifecta there to ensure that they are more effective. Our Financial Markets Conduct Amendment Bill, I think, has had an interrupted second reading. It’s certainly gone through select committee, and that will address and provide the architecture to more closely scrutinise and regulate, and provide oversight to, the issues that the sponsor has outlined. That bill, the one that’s halfway through Parliament, has got a focus on improving outcomes for consumers, and, importantly, it simplifies and clarifies minimum requirements for fair-conduct programmes. It aims to modify the conduct of financial institutions (CoFI) regime to streamline compliance and strengthen the Financial Markets Authority’s (FMA’s) oversight. Of course, this bill comes in over the top of this piece of legislation, and it comes in 12 months—only 12 months—after CoFI has taken effect, on 1 April 2025. So 12 months on and with a bill already in the House, we don’t see the need for this. I’ll speak further to that.

The financial services and banking sector remains on notice—frankly, it remains on notice—and you may have seen, and you may have read about, a 16-month banking inquiry, and we’ve had a six-month follow-up since then. We made about 19 key recommendations—14 which were unanimous. There were a range of issues—and I want to pay tribute to Arena Williams for being at the forefront of that inquiry and never missing an opportunity—and never missing an opportunity. That work continues. The banking inquiry is a live document. We reported back later last year, and we are having those six-monthly come-to-Jesus moments with our banking sector, our non-deposit takers, and others—fintechs as well—as to how it is working. You might have seen, today, from the Hon Scott Simpson, more progress and more push as we open up, and regulate, our open banking system.

The Financial Markets (Conduct of Institutions) Amendment (Duty to Provide Financial Services) Amendment Bill, otherwise known as the “Woke Banking Bill”, is another piece of legislation that sits with the Finance and Expenditure Committee and that Mr Foster is the sponsor of. We’ve given Mr Foster an extension of time re: that conduct bill for him to report back and see if we can come to an agreement and if there’s anything that we could get through the House. In good faith, Mr Foster continues to do that work on the “Woke Banking Bill”.

The CoFI is also under way and leading the charge on reviewing the insurance sector and all the costs that it faces. That is something that CoFI’s been assigned to do and that our Cabinet has agreed to, and it will report back on the insurance sector in ways that, perhaps, we can add more accountability, more transparency, and, perhaps, even more cost-effectiveness to the insurance sector in the coming months.

Three bills streamlining the financial services are going through this Parliament, and there was a banking inquiry that went on for 16 months and came with a number of key recommendations that we continue to monitor, and the Financial Markets Conduct Amendment Bill, which is sitting at second reading, will simplify and clarify minimum requirements for fair-conduct programmes. It does aim to modify the CoFI regime, which is only a year old, to streamline compliance and strengthen FMA oversight. We are very confident, in the National Party, that, frankly, there is a lot of work going on and there is a lot of sunlight being shone—as they say, sunlight is the best form of disinfectant—on the banking sector and on the financial services sector as far as transparency around costs, fees, and pricing.

With that work well under way, with three bills before the House, with one inquiry completed and another still to report back, we are confident that we have got all the oversight that we are ever going to get as far as costing and prices on this. Ongoing reforms are already addressing what the sponsor is trying to achieve here, and the bill that’s before the House is already clarifying and simplifying the obligations of our financial institutions. The bill that is being promoted today would separate that out and run in direct conflict with the legislation that is there and the regulatory tools that already exist and that we are looking to strengthen and put more transparency and accountability around.

I commend the sponsor on her member’s bill and congratulate her on having it drawn, but, again, we’ve got so much work under way in this space and we can’t afford to be distracted with this member’s bill. We wish her all the best, but we won’t be supporting it. Thank you.

I just want to commend Arena Williams for this member’s bill. I think we’ve been lobbied by quite similar stakeholders on this very same issue. As the Green Party’s commerce and consumer affairs portfolio holder, we support the intent of this bill. We know, from evidence as well as feedback from the community, that New Zealanders do pay more on international money transfers than our counterparts.

We have a huge migrant population. We’re a Pacific nation. Consumers should have access to certainty, transparency, and fairness when it comes to international money transfers. I do think the member putting forward this bill is making a very commendable effort to put in place some clarity around the fair conducts programmes, specifically in international money transfers, so we are supporting this bill.

I did want to touch on some of the contributions that have happened in this debate, and particularly from the National Party. I do think that the arguments being given for not supporting this bill just simply do not stack up. It’s bizarre to me that the National Party claims that there’s a lot of work happening in select committees on related bills. They argue that this bill goes contrary to what is already happening. But I would say that—

Cameron Brewer: I never used those words.

RICARDO MENÉNDEZ MARCH: Well, basically, that was the argument that was presented. I do think that if the National Party had issues with the specific language, in clause 5 and 6 particularly, of Arena Williams’ bill, that’s what the select committee is for—to actually refine the language in the bill, to make sure that, perhaps, if the issue is that the member thinks that it’s not aligned with the Government work programme or other bills, we make it aligned. But I did not specifically hear from the member of the National Party about how the Government is looking at focusing on international money transfers, which, to my knowledge, hasn’t been a particular focus of select committee work. I think the opportunity that we have with this bill is to actually shine a spotlight on international money transfers more broadly, and I do think we would benefit from hearing from members of the community in relationship to how much they’re paying compared to their overseas counterparts.

This is an issue that particularly affects people who need to support their loved ones who may live overseas. It feels like having New Zealanders pay more money for international money transfers serves no one but the entities that benefit from it. It doesn’t serve people here, it doesn’t benefit the families overseas, and so we do think this bill deserves attention in the select committee stage. If the Government was concerned about the work programme of select committees, perhaps they should just drop some of the silly bills that I think are taking indeed a lot of time in select committees—the English Language Bill, for example, is a great one, where I do think we can just basically get rid of it and open some space in the select committee to actually evaluate this bill.

I do think, again, this bill ultimately deserves attention in the select committee. I welcome the member for engaging constructively with stakeholders who have long called for reform in this area, and we are supporting this bill.

Thank you, Mr Speaker. I am taking this call on behalf of the ACT Party to speak on the Financial Markets (International Money Transfers) Amendment Bill. I would like to start by congratulating Arena Williams for her bill being drawn and for coming before us for the first reading of this bill. We thought hard about this bill. We understand that there is a very narrow policy in this bill, and after thinking hard, we have decided that we will be supporting the first reading of this bill to enable it to go to the next stage—that is, the select committee process.

We really want to scrutinise this issue in the select committee process. We really want to test the policy in this bill against the real-world evidence before we commit to any change after the select committee process. We want to allow this process to happen, because we understand that there are lots of communities that are impacted because of international money transfers that happen, because of some hidden costs that sometimes people can’t see—especially Pacific communities and migrant communities. If there is anything we can do to help our Pacific communities and migrant communities, we really want to give serious consideration to that. On that basis, we have decided that we are supporting the first reading of this bill.

In the select committee process, we definitely want to hear from people who do lots of international money transfers, including Pacific communities and migrant communities. We also want to hear from banks, financial institutions, and those who provide money transfer services, because we want to understand from them, as well, what the impact will be of this bill on them—on their capacity and operations and how it will impact competition. All those things are really important for us to understand.

We know this is about consumers. It is about transparency of fees or any additional costs that come when somebody is making an international money transfer. On the other hand, we do not want to put unnecessary regulatory burdens on the sector, because we know if you do that, it’s, ultimately, the consumer that will be paying the cost. We want to weigh up all those things in the select committee.

I said that we specifically want to hear from Pacific communities and migrants, but, of course, businesses also do lots of international money transfers, but businesses are more informed; they are more aware. But there are some communities that are not that aware about the hidden costs. We understand that this bill is to require these international money transfer providers to make the cost visible upfront, because there is no point if they realise the cost after the money has been transferred and then they see the actual money that has been received at the other end, and they realise that, actually, the money that they thought they would receive is actually less than that—it’s too late.

In having that cost available upfront, there is both explicit and implicit cost available to consumers, and then they can make an informed choice. These are the kinds of things that we want to explore in the select committee process. I also know, as an immigrant myself, that migrant families do send money to their families in their own countries where they have come from. From my connection in the Pacific communities, I know that for Pacific communities, for many, many families, it’s not a matter of choice; it’s an obligation. Most of these families I know have to regularly send money to their families in their Island countries. If there is a big event happening, anything in the family that happens, then they have to send more than the usual amount they would send.

Sometimes it’s the frequency: there are times they have to send that money. Even if this fee is small, if you add that up, it can become a reasonable amount. That definitely needs to be looked into. Another example is recognised seasonal workers. We have so many of our Pacific Island people coming and working here—if I take the example of our viticulture sector, people are coming here from Vanuatu and other Pacific countries, and they are working here and sending money on a regular basis. We need to take all that into consideration and we want to make this process fair. We want to look at it in the select committee stage and see if there is something that we can do to make this process fairer. It is about transparency of the fee, the actual cost.

Overall, it looks like a very reasonable policy intent, but we really want to see what the real-world evidence is, and if this is something that we need to do, we will decide after the select committee process. The ACT Party is supporting the first reading of this bill. Thank you, Mr Speaker.

Malo. Fa’afetai lava, Mr Speaker. I rise to speak on behalf of New Zealand First on this Financial Markets (International Money Transfers) Amendment Bill, designed to make fee transparency for international money transfers transparent, which I think is wonderful. I just had the chance to reflect on an experience I had working for the Hon Fiame Naomi Mata’afa when she was the Minister for Women, Community and Social Development in Samoa. I met a wonderful man, the wonderful Afamasaga Toleafoa, who is now the ambassador for Samoa in New Zealand. I was to work with Afamasaga on this village development project and institutional strengthening, and he thought, “Well, who’s this Pālagi coming over here to help us out with this? We’ll just have to school him a little bit.”

Cameron Brewer: Little white guy.

Dr DAVID WILSON: Ha! Yeah, “Who’s this guy?” He opened with a good question for me. He said to me, “What do you think the major export from Samoa is?” Of course, I thought, “Well, it’s got to be tourism, doesn’t it?”, and he said, “No, by a long way, it’s remittances. We export people and they send money home, and that is the biggest export we have from Samoa.” Of course, this is the same thing around many of the Pacific Island nations—exactly the same situation. It’s not just those that are living here—and thank you, Parmjeet, for bringing up the fact that this is a cultural thing; that these remittances are sent home to help the family when they are actually living here as well, but we’ve got the recognised seasonal employee workers who are also tripping backwards and forwards to their home nation and they have to transfer their money home.

Now, this is crazy: some of the fees that they have to pay are ridiculous and it’s just unfair. I thank the member Arena for bringing up some of the examples, especially one grandfather, which, you know, reached right in there. That wasn’t nice.

I just want to turn to the chair of the Finance and Expenditure Committee and commend him for the work that the committee has done—and Arena is on that committee for part of the time—around the banking inquiry and looking at all those things that matter in financial services, such as the Financial Markets Conduct Amendment, where we’re going to give more power to the Financial Markets Authority—fabulous. However, the Financial Markets Authority has no authority in any of the Pacific Islands and so this leaves us with a little dilemma. How do we actually attend to those people who are our citizens and our workers and ensure that they get a fair deal in this process?

Another thing that came out of our banking inquiry is the kind of nature of what Payments NZ serves in those transactions. Payments NZ is like the live wire that runs between all of the payments within New Zealand. Internationally, now, of course, you can use things like Revolut or Wise, travel wherever you want to go in the world and you’ve got access to all these different currencies, no matter what, at a very reduced fee, and nowhere near the price of what you would pay if you go through your bank. However, this service is not available in Samoa. Wise can’t get a bank account there, so what we’ve got now is a block in the system, which is unfair.

In respect of what the honourable member from the National Party said in terms of all the work we’re doing in the financial markets and financial services, this bill is actually complementary to what we’re trying to achieve through those efforts. I think we need to give it some time; we need to take it through select committee.

I commend Arena Williams, the member from the other side, for this bill because it looks at fairness and equality. As you know, New Zealand First has a heart for the Pacific communities and the Pacific region, and we just want those things to be an outcome of the select committee process so we get to hear all of the people that are affected by this transaction. We commend this bill to the House.

Thank you, Mr Speaker. It is a pleasure to stand and take a call on this bill, the Financial Markets (International Money Transfers) Amendment Bill. Now, there’s been quite a lot of talk about exactly what this bill is, but, essentially, what this bill is about is fairness. It’s a bill about making sure that when people who have come to New Zealand and who have worked very hard and need to, in a lot of cases, transfer money back home to family members there, can do that without being charged ridiculous penalties or fees on top of those funds.

It’s been great tonight to hear from Arena Williams, who brought this bill to the House, but also to hear from colleagues around the House from quite different political perspectives who all see that, despite their different viewpoints, the concept of fairness when it comes to people being allowed to move their money from one place to the next is an important thing that can unite almost all of us. Tonight, in the House, the one political party who is not going to support this bill is the National Party; the same National Party who promised to take action on the cost of living and have failed and have made it worse and are now not wanting to do anything to address the lack of fairness in the transferring of funds for people and families and communities across New Zealand. I think that is embarrassing.

Tim Costley: Did you vote for tax relief? Did you vote for it or against it? Voted against tax relief.

REUBEN DAVIDSON: I think it is shameful, and I think that the National Party should be absolutely embarrassed and should be making noise in support of this bill rather than general barrage. I commend this bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow.

Debate interrupted.

The House adjourned at 9.56 p.m.

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