Government Makes New Zealand a Twiglet Economy

Monday 11th Jun 2001 Stephen Franks Media Release -- Economy

Australian fears that their competition law will make Australia a “branch economy” show our Commerce Amendment Act last month will make us no more than a twiglet on the Australian branch, ACT Commerce Spokesman Stephen Franks said today.

"Commerce Minister Paul Swain’s dropping of our current US style take-over law in favour of the UK/Australian model makes foreign domination even more certain.

"Australian Stock Exchange Chairman, Maurice Newman, warned last week that Australian competition laws are damaging Australian global competitiveness and making Australia a branch economy. These laws help foreigners acquire Australian businesses through interfering with growth within Australian. Transactions are blocked which “would not register on the radar screens of similar regulators overseas”.

"Commerce Minister Paul Swain forced through the recent changes to our Commerce Act to ape the Australians. He was warned that they were already wrong even in Australia. The Select Committee deadlocked on the Bill. Applied to our tiny market they are dangerous nonsense. But Mr Swain rejected precisely the arguments now advanced in Australia’s Committee for Economic Development, for criteria which focus more on global competitiveness.

"The twiglet economy risk is now much worse for New Zealand. The take-over law which takes effect next month all but locks New Zealanders out when a large control parcel is up for sale. The Government was warned of this too. Only bidders who can afford the risk of being forced to buy the whole company can bid for a control stake. New Zealanders saw how this damaged Brierley when it bid for Thistle in the UK. They will not want to repeat that here.

"For example, the new take-over law is likely to mean that control of Air New Zealand goes overseas, entirely unnecessarily, and forever.

"Populism pushed Mr Swain into this. Ignorance of business here, and of overseas led him in this bad law making.

"It will see head offices disappearing even faster, along with ambitious New Zealanders. Our best and brightest want to be where the instructions come from, not where we have to jump to them. They will go to have more scope than the Government’s twiglet economy will provide," Stephen Franks said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

© Scoop Media