The assurance industry is a critical component of our economic framework. The idea that there is a trusted independent watchdog of the public interest underpins investor confidence and ensures financial probity on behalf of our country's leading institutions. New Zealand has generally been isolated from the kinds of catastrophic audit failures such as Enron and WorldCom that shook up the industry and led to such restructuring back in the early 2000s. When this bill first came before the House we did have a number of concerns.
Although not opposed to widening the pool of people who are able to perform audits, we did have a concern that in New Zealand's comparatively light regulatory environment, there was some risk that to do so would lower the quality of audits being performed. Second, we were concerned that the regulatory impact statements indicated that there was little or no evidence that the proposed changes would bring about the benefits that we were looking for, such as quality audits or being aligned with other jurisdictions. Many of those benefits could be achieved if we were to move to a co-regulatory regime, such as in the UK, or a direct regulatory regime, such as that in Australia, which are two of our major trading partners, rather than retaining the relatively light self-regulatory environment that New Zealand has. Our third main concern was that really this represented a bit of a missed opportunity for a broader review of New Zealand's regulatory environment in the wake of the global financial crisis and domestic finance sector meltdowns.
However, obviously, the bill contained a number of other measures that we supported, such as introducing the requirement for financial statements of medium and large-size charities. However, we heard the submissions and we were assured that the proposed changes are relatively minor and will not substantially change the status quo within the confines of the current framework. We do still hold the concern that the current framework, which relies on self-regulation, is out of line with some of our major trading partners—for example, Australia and the United Kingdom—and that a co-regulatory or direct regulatory framework such as they employ would reduce economic risk in New Zealand. However, given that the changes in the final set of bills do have the support of all submitters and that, if enacted, they do seem to make our regulatory framework more efficient and more effective, we are supporting these bills. Thank you.