Financial Service Providers (Registration and Dispute Resolution) Bill

TIM BARNETT (Senior Whip—Labour) Link to this

I seek leave for the bill to be taken as one question.

SIMON POWER (National—Rangitikei) Link to this

Although we will not have any difficulty with giving leave in that regard, I just want to make it clear that that will not in any way limit the overall time that is available for members to make a contribution. It would be simply taken as one question, is that right?

SIMON POWER (National—Rangitikei) Link to this

I find myself taking an urgent interest in the Financial Service Providers (Registration and Dispute Resolution) Bill. I will make a couple of more general comments to the Committee stage this afternoon, and leave my colleagues Gerry Brownlee and the Hon Murray McCully to make the more detailed contributions in respect of this legislation, which no doubt they will make with their usual high regard for detail on commercial legislation. I see that Mr McCully has come to the Chamber specifically for that purpose, and we welcome him back.

Could I start by saying that this bill is one of a suite of measures that implement the Review of Financial Products and Providers, which yielded nine discussion documents in that area, about 12 to 15 months ago. What became clear at that point was that the legislation relating to the Reserve Bank of New Zealand Amendment Bill (No 3), which imposed a regulatory framework on non-bank deposit takers, was swiftly dispatched to the Finance and Expenditure Committee and has been dealt with by the committee and by the House in fact, in a unanimous way, as a regulatory framework is sought to be put in place for those particular institutions. Earlier today we also considered the Financial Advisers Bill, which passed through all remaining stages—the second reading, the Committee stage, and the third reading—today.

One of the more technical bills to form part of that suite of legislation is the bill currently before the Committee of the whole House called the Financial Service Providers (Registration and Dispute Resolution) Bill. The name could be misleading, but it is not. This bill is decidedly useful in creating an approved industry-led dispute resolution system, and in establishing a registration scheme and system for financial advisers. What we know about this particular area, of course, is that billions of dollars, literally up to $5 billion, have been put at serious risk with the collapse of finance companies in this country over recent months and years. Tens of thousands of New Zealanders have had their savings and investments put at risk. This legislation, along with the other legislation I have described, is not designed to take risk away from investment. What it is designed to do is provide a regulatory registration framework for financial advisers to ensure that when individuals are contemplating such an investment they know the quality of the advice and the competency of the people who are giving that advice, that they are having disclosed to them the necessary fees, commissions, and royalties that are being paid by the various bodies concerned, and that they are able to make an informed decision. Legislation alone, of course, will not necessarily make those decisions more informed. What is required is continuing education, financial literacy, and financial awareness of some of the more complex documentation that often comes alongside these sorts of investment opportunities.

This particular bill, as I have said, adds to the suite of legislation in the financial advisers’ scheme that we have already seen today. I am reluctant to talk about any of the specific detail of this legislation with Lindsay Tisch in the Chamber. He, of course, has far more knowledge of these more technical aspects than I do, and on that basis I look forward to his contribution on new clause 61A, because it is one of those clauses that often strays under the radar in this House, and it needs a bit more of an explanation to this Committee. We are very keen, on this side of the House, to see this matter progressed, so keen in fact that at the commencement of what was a disastrous time for lower tier finance companies and their collapse, the Leader of the Opposition, John Key, wrote to the Prime Minister to offer to assist in a bipartisan way in negotiations and discussions surrounding the suite of legislation.

GERRY BROWNLEE (National—Ilam) Link to this

Anyone who has been watching the proceedings of the Committee, or indeed listening to this debate on the Financial Service Providers (Registration and Dispute Resolution) Bill this afternoon will be absolutely amazed that the Minister in the chair, Lianne Dalziel, could have listened to such a learned contribution from Simon Power and sit there dumbfounded and unwilling to take the floor of the Chamber and give the explanations that we now know we will have to wait for Mr Tisch to give this afternoon.

These sorts of bills may in some circumstances be described as somewhat mundane. Indeed, a lot of people would say that often people take the floor of the Chamber, and speak for their 5 minutes, and offer absolutely nothing of substance in the debate whatsoever, and that sort of comment, of course, does not do Parliament itself a great deal of good. But, generally, there is a reasonably sound reason for people to ask the questions they do. It has nothing to do with the hope that more traffic may find its way down to this House. It does have to do with a desire on this side of the Chamber to be sure that the Minister who is imposing these regulations or conditions upon the financial industry service does in fact know what is going on.

So we look forward to the Minister recognising that she has some considerable responsibility to the nation, taking the floor as soon as possible, and explaining the bill to the Committee, particularly that clause that Mr Power seems so very worried about—clause 61A. Although we can assure the Committee that in Mr Tisch there is an expert on these matters, it is very, very important that his knowledge is not given to the Committee ahead of the Minister stating what it is all about. His speech may be a short one. Mr Tisch may in fact give a short speech, saying simply that the Minister knows what she is talking about. That could happen, and the Committee’s time would not need to be taken in this way, were it not for the Minister’s reluctance to speak. I am getting no sign from the Minister that she is willing to answer these important questions. What I can say, in all seriousness, is that this legislation is a companion to the financial services bill—

The CHAIRPERSON (H V Ross Robertson) Link to this

I wish to advise members that in accordance with a decision of the Business Committee for members to make valedictory statements, I will report progress and ask to sit again presently.