Financial Markets (Regulators and KiwiSaver) Bill
te-pati-maori
Fri Sep 24 2010 12:00:00 GMT+1200 (New Zealand Standard Time)
Financial Markets (Regulators and KiwiSaver) Bill
Friday, 24 September 2010, 9:38 am
Speech: The Maori Party
Financial Markets (Regulators and KiwiSaver) Bill, AND Auditor Regulation and External Reporting Bill, 1st reading Rahui Katene; Thursday 23 September 2010
I want to say from the outset, that while I am naturally suspicious whenever leave is sought from the House for bring bills together under one umbrella, the so-called omnibus bills, that in this case I am prepared to grant an exception.
Because these bills are truly in the format of what we might call the companion bill.
The Auditor Regulation and External Reporting bill is absolutely linked to the establishment of a Financial Markets Authority – an initiative in the Financial Markets Bill.
And the Financial Markets Authority, once it’s up and running, will be the Government regulator of the audit profession, so the two bills are virtually one and the same.
But it is in its philosophical intent that the linkages are most explicit with both bills designed to foster confidence in our finance industry and in doing so to strengthen the base for our markets.
Mr Speaker, I come to this bill, having been immersed in the situation of our people of Otautahi, following the earthquakes that have ravaged Canterbury since the early morning of 4 September.
The perilous situation for some of our families, as they consider their capacity to provide for the basic fundamentals of life – food, shelter, a place to sleep, a roof over their heads – has been truly hard to bear.
I have seen our elders weep in despair as they wonder how they are going to manage. I have sat with families struggling to cope; and it reminded me just how important it is to ensure our financial viability is secure.
Advertisement - scroll to continue reading
On a different scale – but essentially driven by the same hopes and fears – the financial confidence of our markets is a critical factor in establishing a secure foundation for our economy.
The last few years have seen many analysts expressing concerns around the viability of our regulatory agencies, and in particular whether there are sufficient checks and balances in the system to ensure that providers act with integrity and honesty.
Such concerns have sparked off an enormous legislative agenda around financial advisors; securities; capital market development; prudential regulation; governance of financial service providers; and the like.
I can’t help but think if only Government could put such effort in addressing the situations of abject poverty that so many New Zealand families find themselves in, we could make a difference over night.
I’m thinking of aspirations to create confidence in our communities, such as setting a deadline to eliminate child poverty by 2020.
Or initiatives to address the basic levers – such as raising core benefit levels, including superannuation and veterans pensions; and increasing the minimum wage to at least fifteen dollars an hour.
This Bill doesn’t do that – but it does look after the interests of some of the people - the people who are cash rich and able to invest in our financial markets.
It does this primarily through the creation and establishment of a new Financial Markets Authority.
This is being promoted as a super-regulator for our financial markets – bringing together functions which have been spread across the Securities Commission, the Ministry of Economic Development, the Government Actuary and NZX.
This is a Government which clearly likes the Super Size Concept – the Super regulator; the Super City- but only to a degree. And we have to remember the Supersize my Pay campaign has not been a message that this Government has yet to deliver on.
The Super-Size My Pay campaign was launched in late 2005. It revolved around three main planks - minimum wage; abolishment of youth rates; and secure hours : all perfectly reasonable one would think.
This Bill aims then, to promote fair, efficient and transparent financial markets.
We know that the Government is anxious to aims to fast-track this legislation to establish the Authority as soon as possible in order to promote confidence in Aotearoa’s financial markets.
There is always the concern, of course that fast-tracking the Authority’s establishment might mean that the work carried out by the Authority would be done under uncertainty as the finer details of the shape of a new regulator were still being sorted out and would not be completed by the time the Authority is established.
And I want to turn my attention particularly to the proposals in this Bill to improve the oversight of KiwiSaver.
We have been really pleased to be part of the developments around Kiwisaver that are focused on housing – and I come back to those basic needs I talked about earlier as demonstrated in the last couple of weeks in Otautahi.
Some of the members of this House might be familiar with Maslow’s hierarchy of needs including of course the needs of safety and security which are so fundamental to survival.
One of the developments that we are really proud of over this last eighteen months since we have been in a confidence and a supply arrangement with Government, KiwiSaver Deposit Subsidy and the KiwiSaver First Home Withdrawal option, which helps people with the deposit for a home.
In our analysis, about ten percent of current KiwiSaver members are Maori.
With this new development, the home deposit elements of the KiwiSaver scheme can be coupled with a Kāinga Whenua or Welcome Home loan, and a Welcome Home First Steps education course, providing another pathway for Maori into homeownership.
This is a really significant advance to help create opportunities for Maori to enjoy homeownership along with other New Zealanders.
So we have had a particular interest in looking into the case around the KiwiSaver changes; to ensure the basic thresholds of fairness and justice apply to that scheme along with any others.
The changes to the Kiwisaver regulatory regime include making fund-managers more accountable to regulators and investors, and requires fund managers to disclose information about returns, fees and assets in a consistent and comparable manner.
In the current environment, there is only limited regulation of fund-managers within the Kiwisaver Regulatory Regime.
What this Bill will do, will move the KiwiSaver Scheme closer to the legal structure of unit trusts; and it also brings trustees closer into the licensing regime established by the Securities Trustees and Statutory Supervisors Bill.
We support all these measures, which we believe are done in the spirit of accountability, of transparency, of security.
We are pleased to support this Bill at its first reading.
ENDS
Advertisement - scroll to continue reading
a.supporter:hover {background:#EC4438!important;} @media screen and (max-width: 480px) { #byline-block div.byline-block {padding-right:16px;}}
Using Scoop for work?
Scoop is free for personal use, but you’ll need a licence for work use. This is part of our Ethical Paywall and how we fund Scoop. Join today with plans starting from less than $3 per week, plus gain access to exclusive Pro features.
Join Pro Individual Find out more
Find more from The Maori Party on InfoPages.