Goldsmith puts competition, adviser law at top of 2016 list

Goldsmith puts competition, adviser law reviews at top of 2016 wishlist

By Paul McBeth

Dec. 2 (BusinessDesk) - Commerce Minister Paul Goldsmith says reviews covering competition and financial adviser law are his top priority for the coming year.

Goldsmith took on a large backlog of work when he inherited the commerce and consumer affairs portfolios after the National Party's win in the 2014 election, with his first act as minister signing off 700 pages of regulations attached to the Financial Markets Conduct Act - a mammoth overhaul of the country's decades-old securities law. Also on his agenda is a legislative review of five-year old law governing financial advisers, and a review of provisions in the Commerce Act on monopolies abusing their dominant power.

He says those two reviews are at the top of his list in the coming year and are aimed at improving New Zealand's reputation as a "stable, predictable and financially sustainable environment" for doing business.

"If you look at what most people focus on in politics, it's about trying to improve the living standards of New Zealanders, and we often focus on growing the economy as being the best way to do that and create higher incomes," Goldsmith told BusinessDesk. "Perhaps we don't talk about the flip-side, which is to make every dollar you have go further, and that points to the competitiveness of the domestic economy."

Last month the Ministry of Business, Innovation and Employment called for submissions on possible changes to provisions in the Commerce Act that it says aren't fit for purpose because they don't punish anti-competitive behaviour by powerful firms, are too complex for cost-effective and timely application, and aren't in line with international law.

Goldsmith said the review is in a complicated area, and his officials will have to got through it in a "pretty cautious way."

The review is also seeking feedback on letting the Commerce Commission undertake formal market studies, an extension of the regulator's powers that MBIE has said was "unlikely to be helpful", with potential gains outweighed by disadvantages.

Goldsmith was more upbeat on the use of market studies, saying they were potentially useful in probing an industry to pick up things that might have been missed from the traditionally narrow approach across government agencies.

"The challenge for me is how you design a market studies power that didn’t create a rod for campaigners to demand hugely expensive, disruptive reviews of sectors on the basis of a few allegations," he said. "I think it needs discipline around the process, because those sorts of things can be very resource-intensive, not just for government, but also for the industry being studied."

On the review of financial advisers legislation, Goldsmith said he wants to take a "slow and deliberate process" as the area is "ripe with potential for unintended consequences."

Of concern to him is the cost and complexity New Zealanders of modest means have in accessing financial advice, and the consistency of disclosure of conflicts of interest.

"It’s a very long ongoing process of trying to raise confidence in the conduct of financial markets and New Zealanders' access to that, and the financial advisers space is important," he said.

Goldsmith said the regulatory side of government needs to come up to the same level of rigour shown in the budget process.

"I've inherited a very large suite of regulations, and I think they need to be regularly and rigorously reviewed to make sure that we’re achieving what we set out to achieve and we’re not adding undue cost to industries in various ways," he said. "You do have to continually ask that question have we got it right and are all these regulations we impose justified, given rapid change in some sectors."

(BusinessDesk)

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