Financial Markets (International Money Transfers) Amendment Bill

Financial Markets (International Money Transfers) Amendment Bill First Reading Debate resumed from 1 April. NANCY LU (National) (19:30): Thank you, Madam Speaker. I am standing to speak on the very first reading of the Financial Markets (International Money Transfers) Amendment Bill. As suggested by the title, it is very specifically about international money transfers. Now, I’ve had a read, obviously, of the notes related to the bill. I have to say, I am rising to oppose this bill. I want to start by acknowledging the intention behind the bill. The bill is to make sure people understand exactly the components of the cost of what they are paying when they send money overseas, hence the international money transfer. Now, the intent sounds reasonable. Most New Zealanders would agree they would want to understand the component of the cost that they are paying, but ultimately it is one final cost that they will be paying. Understanding how it is made up, component-wise and ratio-wise, I don’t think necessarily adds any benefit to people who are using this service. However, the question we have today, and the reason why I oppose this bill, is that it’s not improving any safety measures with international money transfers. It is not improving any speed of making international money transfers. It will not actually do anything to reduce the cost of making such international money transfers. Actually, on the contrary, if the bill goes through and it becomes law, the financial providers will now have to do the extra administrative work to provide the breakdown of the cost involved with making international money transfers. They will end up having to have additional staff, possibly, working on the cost, have people who are aligning to make sure that their cost component is actually following the requirements of the legislation, and therefore adding additional cost. Overall, if this becomes law, we are actually asking for the financial service providers to be providing additional administrative costs, therefore, ultimately, the responsibility of that cost will be borne by New Zealand consumers who will be using the service. Ultimately, I don’t agree with the amendment in this bill, because we are seeing that the impact of this bill is to add the additional layers of rules, therefore requiring additional layers of costs, and therefore ultimately, they will be passed on to everyday New Zealanders. Now, if we think about how this works in real life for New Zealanders, the people who regularly need such a service to transfer money internationally to a different market would be a lot of people from the community that I work with very, very closely, particularly the migrant ethnic communities, some of whom work very, very hard. Like our Prime Minister said, working hard in one job, two jobs, and three jobs to find and to save and, ultimately, possibly send the money overseas, back to their home country to support their families overseas. What these people want to see is that their money will be transferred safely, it will be transferred timely, and at a minimal cost, because every single dollar that they pay for the bank’s service or pay for international money transfer will be $1 less that their family members will receive on the other end. It also applies to many New Zealand companies who send money overseas for, for example, their international suppliers. They have purchased something from overseas and they will therefore be sending money overseas, and therefore every single dollar they are paying additionally for making the international money transfer will be $1 that they won’t be keeping as profit for the New Zealand company or to grow the business they have in New Zealand. Now, no matter the migrant community workers or the New Zealand businesses, they won’t want to see more complexity, more layers or burden that they need to go through. They obviously don’t want to see the higher fees caused by additional compliance requirements. Therefore, as a member of the National Party, when I talk to businesses, my understanding would be that this is not a bill that will be welcomed, because it doesn’t address or improve any of the key requirements that they want, which is safety and speed and reduced cost. Therefore, I don’t believe this bill is fixing any basics that we have in New Zealand right now. It’s definitely not building any future for a faster, safer, and more cost-efficient service for international money transfers. Therefore, I do not support this bill. Thank you. DAN ROSEWARNE (Labour) (19:35): I rise on behalf of the Labour Party to speak in support of the Financial Markets (International Money Transfers) Amendment Bill at its first reading here. This is a practical bill, it’s a sensible bill, and one that could make a real difference to everyday New Zealanders. At its heart, this bill is about fairness, transparency, and making life a little bit more affordable for people who are already doing it tough. Every day, people across Aotearoa send money overseas. They are sending money to support parents, children, brothers, sisters, and loved ones. They are helping with rent, food, school fees, medical bills, or simply doing what families do: looking out for each other. Very often, the people making these transfers are migrant workers, who are contributing hugely to New Zealand. They are our cleaners, our aged-care workers, our nurses, and our hospitality workers, and many others. Just contrary to the earlier contribution there, the communities that I’m talking to are looking at this bill with anticipation, particularly in South Auckland, especially Pacific communities. Our migrant communities are the backbone of the local economy. They work hard, they pay tax, and they contribute, and many quietly send a little bit of money to the Pacific Islands each week to help with family, but, right now, too many of them are feeling that they’re stung by fees they cannot clearly see. That is the problem this bill seeks to fix. At the moment, some providers advertise zero fees, but the real cost is hidden in the exchange rate spread. People think they’re getting a bargain, but they’re not, and they only realise later on that far less money has arrived than what they expected. That’s not a properly functioning market. A market only works when consumers can compare prices, make informed choices, and know what they’re actually paying for. If the real fee is hidden, there’s no real competition, and that’s not a fair deal. Thank you. DAN BIDOIS (National—Northcote) (19:38): I was caught up in the moment of what the previous speaker said. Ha, ha! He even wrote down his speech! It is a privilege to contribute to this debate today, which might be my only contribution in the House tonight. I do want to start out by acknowledging the member Arena Williams. Well done for getting your bill drawn from the ballot. Knowing the member reasonably well, I know this is definitely within her general wheelhouse of areas of responsibility. Arena Williams: Yeah, stop getting in my wheelhouse with your other bill! DAN BIDOIS: Ha, ha! Look, we are here to discuss what I think is an issue. I actually had a professor in the United States, Ricardo Hausmann was his name, and he used to say two things: he would say, for Government policy, you want to look at whether there is a problem to be solved first. Then, the second thing is: is there a role for Government in solving the problem? To this first issue that my professor would say, this is a problem. It is clearly a case of differential rates when you transfer money, particularly for remittance purposes. We do acknowledge not just our Pacific neighbours, there are people from around the world who come and work here and send money back to Ukraine, developing countries in Central Asia, right across the world. We certainly acknowledge their contribution to our society. It is another thing to then say whether the Government can and should intervene and solve this problem. In New Zealand’s context, we answered that as a partial yes, the Government should do that. The reason why this side of the House isn’t supporting this bill is because there are a range of instruments from Government that are designed to help address this particular issue. I do, for those two people at home, wish to outline those particular instruments. The first is the Conduct of Financial Institutions regime, which we brought into place in March 2025. That requires, of course, all financial institutions to operate fairly and transparently towards consumers in the products they offer. Next, we do have the Financial Markets Conduct Amendment Bill, which is before the Finance and Expenditure Committee at the moment, and it’s currently going through the House, and that clarifies obligations for financial institutions with respect to fair and transparent practices. I do want to come back to what I got caught up with at the start of this debate, which is the previous member’s contribution when he said—and I quote—“properly functioning markets”. Yes, properly functioning markets are all about price signals, but they’re also about competition. I think, actually, in this House we rushed too quickly to say the Government must solve this. Actually, the key to a functioning market is competition. Where is there competition coming from? Well, thankfully we’ve got a greater use of fintechs out there, companies that are bypassing through technology and enabling customers to transfer at next to nothing for international money transfers. We should be encouraging this. We’ve got a huge amount of digital technology companies that are providing solutions for customers where the big companies cannot provide and where Government cannot provide. We on this side of the House are all about free markets. We’re all about competition. We’re all about price transparency. The Government’s doing its bit. We do not need a piece of legislation like this. We think that it’s actually just overly cumbersome and it’s actually providing too much in terms of bureaucracy that is already in the works. On that basis, I don’t commend this bill to the House. DEPUTY SPEAKER: Arena Williams in reply. ARENA WILLIAMS (Labour—Manurewa) (19:43): Thank you, Madam Chair. What a delight to get to the stage in the debate where it is afforded the member in charge of a bill to offer a reply. I want to use it to thank the Greens, Te Pāti Māori, ACT, and New Zealand First for coming together to recognise the principle that every dollar that goes into unnecessary costs, into these hidden fees, into the inflated margins being charged to New Zealanders, is a dollar that is not going to groceries, rent, petrol, and the real economy. This is a simple bill. The effect is that it will make prices transparent, and it is an issue of fairness, because those costs are adding up. They’re not always obvious to New Zealanders, and when they become obvious, often after a transaction has occurred, people feel terrible about that. People feel a degree of shame, and week after week it’s adding up for people in a way they feel powerless to change. It’s also about the dignity of the people who have seen thousands of dollars being wasted on these fees because they are being ripped off in New Zealand right now because we don’t have the rules that other countries do. Those parties who are voting for this are voting for standing up for those people who are being ripped off and are saying we can change it in this House, and we should. This is why I’m going to write to every National MP in this House alongside their constituents and the people who want it most. The organisations like our Filipino Nurses Association in Manurewa and Takanini, people like the Supreme Sikh Society in Takanini, people like the Waitakere Indian Association, those organisations are really calling for change and they want this to progress. I know that, at a local level, National MPs can see what the cost of living is doing to their constituents, and it’s hitting everyone. This is one simple measure where a small regulatory change can impact on everybody’s costs that are adding up and do something real for those people who are least able to avoid those costs. These are people who speak English as a second language, these are the workers who are working two or three jobs. These are the people who need our help most. And this is something simple. Where banks are the ones ripping them off, where institutions that are charging their fees are getting the actual services and providing them at a low cost, we can do something about it, so we should. The people most affected by opaque remittance fees are those who most often are the least able to absorb them. They’re low-income workers, they’re migrant communities, they’re people spending small amounts regularly, where even a few extra dollars each time makes a big difference. We talk a lot about inclusion and opportunity in this House too. This is what it looks like in practice, making sure people are not quietly overcharged simply because the system is too hard to navigate. Now, in response to those National MPs who have given contributions tonight. This change means that prices will be known. The problem at the moment is that, when you walk down the street—there’s an interchange service just on the way down to Where’s Charlie, the Vietnamese restaurant, where I saw some colleagues tonight. Between us and there is an interchange service that is advertising zero fees. What they mean by zero fees is that, when you transfer the money overseas to your mum you’re looking after in Samoa, to your family in the Philippines, to someone you are transacting with to buy a holiday experience when your family visits in November, you will be charged a fee but you won’t know it up front. In fact, you might not know it until the money arrives in that person’s account. That is not fair. That advertising shouldn’t be allowed. That is happening in front of our eyes, but we can navigate it, because, as Dan Bidois set out, we have the right kind of information in the market to be able to use the alternatives. But lots of people don’t. Lots of people see that sign and think “Zero fees, sounds good to me.” And why wouldn’t you? That’s what’s being advertised. There are services out there that are charging up to 10 percent in fees by the time you add on the extra costs on top of it. That should be disclosed up front, and it’s not. For most products in our market it will be, but this is a special case where it is not regulated in that way. Of course, New Zealanders deserve a Government that believes in the principle that they should pay a fair price and the one that’s advertised to them; the price you see at the shelf should be the one you pay at the till. That applies to international money transfers too. I want to thank the ACT Party. I want to thank New Zealand First. They are coming to this for different politics than I do, but there is a principle here that we can do something about New Zealanders’ cost of living, and we will. I want every National MP to vote for this. I hope we can arrive at a position we can all agree on, which is that this is a simple thing we can do, with a simple and targeted regulatory measure that will make a difference to thousands of New Zealanders’ lives. A party vote was called for on the question, That the Financial Markets (International Money Transfers) Amendment Bill be now read a first time. Ayes 74 New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5; Ferris. Noes 49 New Zealand National 49. Motion agreed to. Bill read a first time. The result corrected after originally being announced as Ayes 54, Noes 49.