Hekia Parata: Tena koe, Mr Speaker. Huri noa e to tätou e te Whare. Tena tätou katoa. I begin my remarks on the Credit Reforms (Responsible Lending) Bill by firstly acknowledging Carol Beaumont for the work, effort, and purpose that sits behind this bill, and her predecessor, Charles Chauvel, who equally has made significant contributions to this area of work. I would also like to join with the House in acknowledging Her Worship the Mayor of Porirua, Jenny Brash, her deputy mayor, Litea Ah Hoi, and Andrew Shann. I acknowledge all the work and the many months and years he has devoted to this piece of work. If It is not clear from the speeches tonight, I would like to make it clear that I do not think there is any disagreement between any sides of the House as to the problem that we face and the concern we have about the predatory nature of fringe lending and the vulnerability of fringe borrowers. With respect, the fact that we disagree on the solution that we might take to address this problem does not attribute to one side or the other a greater moral authority. I think it is important –
Carmel Sepuloni: It’s shameful that that side is not supporting this bill.
Hekia Parata: I am not ashamed at all to say that I think this is absolutely a problem and it is one we need to deal with. Obviously, it disproportionately affects those who are on the fringes of our society – those who are the poorest. In many cases, they are Maori and Pacific Islanders. To have the Opposition shouting abuse at me that I should be ashamed is offensive, because I do share the concern of the House; I do not share those members’ view that the Opposition has the monopoly on understanding what the solutions are. This is a very complex area and the measures the bill proposes are not, in my view, viable solutions. The Government is looking at comprehensive measures to address these issues, and we are reviewing –
Carmel Sepuloni: Looking is not good enough.
Hekia Parata: It is amazing how those members can sit on a moral high ground when Labour had the opportunity for 9 years to address this issue, but it did not do so. I have 4 minutes, and I would really like the opportunity to contribute my 4 minutes to this debate. We are reviewing the Credit Contracts and Consumer Finance Act, we are implementing the Financial Service Providers (Registration and Dispute Resolution) Act, and we are undertaking a major review of consumer law and improving financial literacy. Lacking as they might the drama that the Opposition wishes to bring to this, those measures have far greater potential to bring about the changes that we all agree are necessary. The interest rates cap component of the bill has generated the most publicity as a way to stop loan sharks. Although National does not support the charging of excessive interest rates, we have reservations about interest rate caps being a viable regulatory intervention for over-indebtedness and poor lending practices. This is because the issues are wider and more complex than just the cost of affordability of credit. All consumers should have access to credit when they need it, on an informed basis. If a cap is introduced at a level insufficient to generate a lender’s required margin the price of credit can be transferred from the interest rate into fees and other charges, thereby negating the intention of price control. The bill also seeks to limit a creditor’s right to the value of goods at the time of enforcement. This too is problematic. There is concern that the finance market for lending on consumer items could potentially collapse overnight if such a law was introduced. The bill proposes the introduction of responsible lending obligations that seems to be based on initiatives in Britain and Australia. We have already heard from previous speakers that capping of interest rates has been halted in the Commonwealth of Australia while they study the effectiveness of this. This notion that we should embrace what every other country in the world is doing, which they have only been doing for the last 12 months or so, without knowing how effective it is seems to me to be a foolhardy rush when we have the opportunity to test the confluence of changes that we are already bringing about. I do not resile from my position that I share the concern of this House for fringe borrowers; nor do I resile from the position that this Government is taking.