The ACT Party will be supporting the Financial Service Providers (Pre-Implementation Adjustments) Bill. I will comment on the speech given earlier this evening by the Minister of Commerce, Simon Power, and also on the comments made in response by Lianne Dalziel. The Minister made the point that the bill is aimed at promoting confidence in the financial sector; that is absolutely fundamental to a growing and developing economy. Lianne Dalziel, in her speech in response, made the comment that the consequences of financial failure have been far-reaching. Well, that has to be the understatement of the year. At last count, some $4 billion or $5 billion either has been lost or is tied up in moratoriums on money invested in finance companies. Lives have been ruined, people have committed suicide, and couples—grandparents who have worked their whole lives believing that they were setting aside sufficient funds to live off in their retirement—have been left destitute. People have been left homeless, and have had to move in with their children or with their parents. Huge amounts of money have been lost.
Yes, it is very important that we have confidence in the financial sector, and it is very important, as the Minister said, to create clarity for regulators and the industry, but I would like to comment on the importance of enforcing that regulation—actually enforcing that law. Some 3 weeks ago, prior to Parliament resuming, I was surprised to read on the front page of the New Zealand Herald that the new head of the Serious Fraud Office was committing the resources of his office exclusively to the investigation and possible prosecution of losses in the finance industry. I say that when one looks at passing legislation like this, it is important to have the law in place but it is more important that the law be enforced. Yes, it is great that the Serious Fraud Office is putting in the effort, but I ask why it took a change of chief executive and why it took until November of last year, when this Government had been in place for the previous 12 months, to create that focus and create that priority. I think of the thousands of families, mainly elderly people, who have lost money in the many finance company collapses reading that, some 15 months after a change of Government, the priority of the Serious Fraud Office has shifted, and it is making this matter its first priority and is putting resources into it. If we are to set up a framework such as this, it is very important that the regulators be well resourced, that the resources be there to investigate breaches of the law and to prosecute and uphold the law.
Lianne Dalziel referred earlier this evening to the situation of ING and ANZ. Let me remind members of the House who are not fully aware of the circumstances what they were. The ANZ bank owned 49 percent of ING, and it actively promoted and sold products on behalf of ING. The client advisers of the ANZ—qualified bank tellers, financial advisers—actively sought out clients of the ANZ and encouraged them to shift their money from safe deposits into the two ING funds that are at fault, the regular income fund and the diversified yield fund. What is interesting is that, for the most part, I do not believe there was malice on the part of those ANZ staff. I do not believe that those staff knew what they were actually selling. So when I heard the Minister say this evening that this law will require the qualifying financial entity to assume responsibility for the advisers and for that advice, I thought that that had to be a good thing. It is important. Those people hold themselves up as experts. People, and in particular the elderly, look up to banks and respect them. They believe that they can rely on their advice.
There were many disgraceful things about the ING-ANZ situation, not least of which was that when it first came to light the people who invested in that fund were offered a derisory 10c in the dollar. I acknowledge the protest group that set out to try to get a better deal for investors. The tragedy is that most of the people who invested in that product were offered 62c or 64c in the dollar; that offer was made to all ING investors, and, as Lianne Dalziel pointed out, to get their 62c back they had to sign a piece of paper and sign away their rights.
That brings me to my next point. While the Serious Fraud Office seems to have taken far, far too long to put effort into investigating the collapses that have occurred, the Commerce Commission has been beavering away for more than 12 months, looking at whether ING and ANZ misrepresented the situation and breached the Fair Trading Act. I ask again whether sufficient resources are being put into that investigation. What is the point of bringing a bill like the Financial Service Providers (Pre-Implementation Adjustments) Bill to Parliament to pass it into law, if the Government bodies are not prepared to enforce it and the Government is not prepared to make the resources available? It is a fact that those people who invested in those two ING products on the advice of ANZ bank advisers had the option of applying to the Banking Ombudsman for additional compensation, but the many clients who invested in them on the advice of ING advisers did not; they did not have the benefit of that extra advice. If the qualifying financial entity is required to take responsibility not just for its employees but for its agents—for the independent financial contractors who hold themselves up as experts and sell these products—that has to be a good thing.
In conclusion, I am trying to say to the House that it is all very well to have laws and regulations in place, but it is important that the regulatory bodies are resourced and that they are prepared to enforce the law. I believe that that is the very minimum that the people of New Zealand can expect from this Parliament and this Government. Thank you