19 Feb 2010

Greater urgency sought over taskforce recommendations

7:03 am on 19 February 2010

The Government's response to a taskforce call to overhaul New Zealand's capital markets has been met with general approval, though some would like to see greater urgency.

Commerce Minister Simon Power says the Government has accepted about 25 of the 60 recommendations by the Capital Market Development Taskforce and is considering another 28.

It's backing the creation of a financial hub for back-office services, simplifying financial documents and loosening rules for raising money from more experienced investors.

A review of the Securities Act will also consider making it less expensive to raise capital, including allowing the NZX to run unregistered markets to bring firms through and eventually list them.

A discussion document is expected by April, with potential changes implemented in October next year, something that NZX chief executive, Mark Weldon says he would like to see happen sooner.

The Government is also looking at creating a single regulator by merging parts of the Companies Office, Securities Commission, and NZX.

But a recommendation to partially float Crown-owned assets won't be adopted, as the National Party promised not to do so in its first term.

Mr Weldon says that should still be left on the table.

Meanwhile, Finance Minister Bill English says the Government's medium term goal is to align the tax rates for companies, individuals and trusts.

Currently, the top tax rate is 38%, the trustee rate is 33% and the company rate 30%.

Mr English says he's been advised the aligning the trustee rate and the top personal rate should be a priority.

He says the Government has not decided whether to change the current corporate rate. He acknowledged it can not get too far out of line with Australia.

Australia's company tax rate is also 30% , but is under review as well.