12 May 2010

Plan for NZ financial hub faces Aussie challenge

10:55 am on 12 May 2010

Prime Minister John Key's dream of a financial services hub faces a challenge from Australia, where the government has outlined in its Budget incentives to boost its funds management industry.

Mr Key has said New Zealand hub could create thousands of jobs and hundreds of millions of dollars in tax revenue for the Government.

The Australians seem to have similar ideas, however, with Treasurer Wayne Swann saying he wants to make the country the region's leading financial services hub.

As part of the Budget delivered on Tuesday, it was announced that $A25 million was will be pumped into a centre to develop skills in Australia's trillion-dollar funds management industry.

A shake-up in taxes on foreigners' investments in funds based in Australia was also signalled.

Government officials in New Zealand are still considering similar changes to tax rules to get Mr Key's funds management hub off the ground.