Labour continues to support the Financial Service Providers (Pre-Implementation Adjustments) Bill, as it makes necessary changes to the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008, which were passed under the previous administration. I chaired the Finance and Expenditure Committee that heard submissions on both Acts, so I can pay an informed tribute to Lianne Dalziel, who was the sponsoring Minister of that legislation and who went on to chair the Commerce Committee in this term of Parliament, which dealt with this bill. Lianne Dalziel worked diligently to ensure that there is an improvement to her own legislative agenda. Thanks in large part to her efforts the changes that the House considers tonight will mean that the legislation passed originally under Labour can be implemented in such a way that it restores confidence in our financial services sector. I was pleased to be a member of the committee that worked under Lianne Dalziel’s chairpersonship on the current bill. I want to compliment all of its members, regardless of whether they are present in the House tonight, on their diligent and non-partisan approach to the legislation.

The bill is important because the changes that it will make to our financial services regime are about protecting everyday investors. Mum and dad investors deserve not to be exposed to a predatory environment. Never again, if we pass this legislation, will this country have to put up with the lack of regulation in our markets that in recent years has seen the collapse of finance companies, resulting in families losing their life savings and their homes. This bill will not outlaw risk; no bill could or should do that. But it will have the effect of assisting people to achieve more robust financial advice, and of making sure that that is available to them in the future. But we must remember in passing that this by no means lessens the harm that has already been done. I think, in passing at least, the House should remember those people who have lost everything. In remembering those people, we need to recommit ourselves to preventing the financial markets from running wild, with little regulation. We do owe it to those who were badly affected by finance company failures not to let that situation ever repeat itself.

The changes to the bill that the Commerce Committee has recommended are extensive, and they are technical. I do not propose to traverse them all in this speech. They will be exhaustively canvassed, along with the provisions in the Supplementary Order Paper that the Minister has proposed, in the Committee stage, which, as the result of the urgency motion the House has just passed, will take place tomorrow.

I will summarise the key points that the committee made in its report. The changes that the committee recommended will attempt to ensure that people have better access to robust financial advice, so as to avoid situations where uninformed investment leads to massive harm. There are three main ways that this will be done, if the committee’s recommendations are adopted. First, a qualifying financial entity will have to name all of its contractors, whose advice it will become responsible for, instead of there just being a presumption that the qualifying financial entity is responsible for all advice. Secondly, the bill as amended will allow contractors of the qualifying financial entities, rather that just the immediate employees of the entities, as is the status quo, to provide financial advice on complex investments without them having to be individually licensed. Thirdly, both contractors and employees will have the ability to provide advice for products that the entity promotes under the Securities Act. At the moment, that can only be done for products that the entity issues, not for products promoted by it. In combination, those three principal changes will reduce costs and increase efficiency, and hopefully ensure that advice is readily available to those who participate in our financial services industry.

This is a sensible bill. I commend the House for working so constructively to find solutions to protect mum and dad investors and vulnerable consumers in our financial services industry. I congratulate Simon Power, because he has clearly recognised that there is a power imbalance between a company operating in the finance industry and the ordinary consumer. It is obvious that there is a need to protect those more vulnerable parties when those deals are being made. There is an obvious asymmetry of information and often a massive imbalance of skill. It is important that we make sure that we protect the ordinary investor when we try to regulate the industry.

But I wonder why, if the Government can see the importance of the imbalance in this sector—or at least in this part of the financial services industry—and can acknowledge the severe consequences that can result from inadequate regulation in this case, it cannot apply that approach across the board. It is all very well to protect the sorts of investors who were very badly tricked by companies like Blue Chip and lost their savings as a result. Indeed, as I have said, that protection is a good thing; I am glad that Parliament is addressing those issues. But there is an obvious inconsistency when the Government is unwilling to protect the most vulnerable consumers, particularly the lowest-income consumers, who are experiencing the loss of everything they have because of having entered into arrangements with payday or marginal lenders—loan sharks, in the vernacular. I am astounded that members of the Government have expressed the indication that they will not be supporting the referral of my colleague Carol Beaumont’s Credit Reforms (Responsible Lending) Bill to a select committee on the next members’ day.

I do ask members to reflect on that inconsistency. It is not logical to provide a decent level of protection to financial services industry consumers, such as those for whom it is proposed in this legislation, but to fail to look after the most vulnerable and the most financially illiterate consumers at the lowest end of the financial services market. This Parliament runs the risk of doing that if the Government maintains its approach to Carol Beaumont’s bill. To be properly consistent, the Government must reverse its decision on that legislation, and I hope it will. Meanwhile, I look forward to further debate on the Financial Service Providers (Pre-Implementation Adjustments) Bill. I commend this bill to the House on its second reading.