Commerce and Consumer Affairs Minister Kris Faafoi says he doesn't want to call a financial services royal commission but conduct and culture improvements are needed to avoid ending up with behaviour of the sort that sparked Australia's royal commission.
Faafoi made the comments at a lunch in Auckland on Friday organised by Westpac. His comments come after a busy period including his announcement that the Government will establish a conduct licensing regime for banks, insurers and non-bank deposit takers, confirmation of a daily interest rate cap on loans as part of changes to consumer credit laws aimed at combating loan sharks, and announcement of new measures aimed at better protecting businesses and consumers from unfair commercial practices.
"While we want businesses to make a profit, we don't want that profit to come at the expense of people," Faafoi said.
"I guess what you'd love to know is what is at the heart of it for me as a minister, and at a high level what do I want to achieve for you and your sector and also for consumers?"
"I want to make sure that New Zealanders are making wise, informed and motivated financial decisions," said Faafoi.
"Ultimately the reforms underway in the commerce portfolio are all aimed at insuring our laws promote an environment where business interests and customer interests work hand in hand so when businesses grow their customers' wellbeing grows too. And that can happen if consumers trust the sector and understand the sector and know what the benefits of good financial advice and products can be."
"It is obvious that we are also in a time of change. What is also obvious is that business wants certainty. So I want to give you the certainty that the current reforms are designed to increase consumer confidence in the sector," Faafoi said.
"We did not have a royal commission here in New Zealand, the sector does not want a royal commission here in New Zealand and I don't want to call a royal commission here in New Zealand. But the recent FMA and Reserve Bank reviews [of banks and life insurers] did say that improvements to conduct and culture are needed or New Zealand risks getting to a place where behaviour here could mirror the kind of behaviour that sparked the RC [royal commission] across the Tasman."
"I want a New Zealand where kiwis can both afford and feel confident to be fully insured and invest because there is benefit for all in that. I want a situation where those who have traditionally been most vulnerable aren't just protected from predatory practices, they also have the means to access safe credit and can even save for things that are not a reality for them now like a holiday or a house. And I want a New Zealand where whether you're a consumer or a business you'll have clear rights and protections to be treated fairly so that business owners can concentrate on going digital or growth and not feel stressed because every day feels like a David and Goliath battle to get paid on time or to get a fair deal," Faafoi said.
The audience listening to Faafoi included Westpac NZ CEO David McLean, parent Westpac Banking Corporation's board members and CEO Brian Hartzer, National Party Finance Spokesman Paul Goldsmith, and Reserve Bank Deputy Governor Geoff Bascand.
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