NZ- Aus: Ministers announce key achievements
22 February 2006 Media Statement
Ministers announce key achievements in the trans-Tasman single economic market agenda
Joint Media Statement
At their annual bilateral meeting today, Australian Treasurer Peter Costello and New Zealand Finance Minister Michael Cullen announced significant progress on single economic market issues. "We are pleased to announce a number of measures that will accelerate moves to remove barriers between our two economies," said the Ministers.
"We are also signalling our intention to continue driving efforts to streamline the trans-Tasman business environment by agreeing to a comprehensive work programme for 2006 and beyond."
The Ministers today signed a treaty on Mutual Recognition of Securities Offerings and a revised new Memorandum of Understanding on Business Law Coordination. In addition, both Governments have committed to implement the recommendations of the first report of the Joint Trans-Tasman Council on Banking Supervision and to legislative amendments to facilitate information sharing between the competition regulators in both countries.
All of these important developments should have significant benefits for trans-Tasman business and those looking to enter the trans-Tasman market. Over the past year, officials from Australia and New Zealand have also made progress on issues relating to taxation, investment, rules of origin and competition and consumer policy.
The bilateral meeting is a valuable opportunity for the Ministers to discuss regional commitments and developments in the Asia-Pacific. Ministers exchanged views and discussed their shared interests in a number of important forthcoming international meetings, especially the G-20 and APEC, which Australia is hosting in 2006 and 2007 respectively, and the Forum Economic Ministers’ Meeting.
The Australian Treasurer Peter Costello and the New Zealand Finance Minister Dr Michael Cullen today announced that the Australian and New Zealand Governments have agreed to legislate changes recommended by the Joint Trans–Tasman Council on Banking Supervision.
The Council was established by the Ministers in February 2005, and was asked to report on legislative changes that would ensure our banking supervisors, the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of New Zealand (RBNZ), can support each other in the performance of their regulatory responsibilities.
These changes will require the banking supervisors to support each other and consider the impact of their actions on financial system stability in the other country. APRA and the RBNZ will also be required to consult each other on these matters.
The proposals reflect the high degree of commercial interdependence of the Australian and New Zealand banking markets and will facilitate the development of the single economic market objective. In addition, the regulators will be able to afford the banks some more flexibility in how they structure their businesses within the trans-Tasman markets, which is expected to bring compliance cost reductions and efficiency benefits.
Ministers also agreed that the future work programme will include looking at improved cooperation on crisis management, promoting seamless service provision for customers, and sharing experiences on improving the quality of insurance regulation.
The proposed legislative changes comprise the following elements. General provisions that require each regulator to support the other in fulfilling the other’s statutory objectives and, where ever reasonably possible, to avoid actions that could have a detrimental effect on financial system stability in the other country. A specific reference to the definition of ‘detrimental actions’ to actions that interfere with or prevent the provision of outsourced services to a related party in the other country. A requirement that, where reasonably practical, the regulators consult each other before exercising a power that is likely to be detrimental to financial stability in the other’s country. A requirement that an administrator or statutory manager advise the regulator if they have reasonable cause to believe that the proposed exercise of a function or power by them is likely to have a detrimental effect on financial stability in the other country. Further information: http://www.rbnz.govt.nz/finstab/banking/supervision/2420258.html
Treaty on the Mutual Recognition of Securities Offerings
The Ministers today signed a Treaty in relation to Mutual Recognition of Securities Offerings. It will form the underpinning for a scheme which will allow an offer of securities to be made in both countries in the same manner and with the same offer documents (subject to some minimal additional requirements). It will reduce red-tape for business and allow for increased trans-Tasman investment and choice for investors.
Memorandum of Understanding on Business Law
The Ministers today signed a revised Memorandum of Understanding (MOU) on Business Law, in accordance with the commitment to review the MOU every five years. The MOU provides the framework for the coordination of business law between Australia and New Zealand. The MOU proposes an extensive work programme to increase trans-Tasman coordination in business regulation. The consultation process that was undertaken as part of this review confirms overwhelming community and business support for its objectives.
Trans-Tasman Accounting Standards Advisory Group
The Trans-Tasman Accounting Standards Advisory Group (TASAG) has organised cross-appointments and a protocol of cooperation between our financial reporting and accounting standards setting agencies. In addition, the TASAG hosted a very successful regional forum on International Financial Reporting Standards attended by officials from 11 countries in the Asia-Oceania region. This forum plays an important role in promoting regional cooperation and communication on developments and issues facing economies in this region. Competition and consumer policy
The Australian and New Zealand Governments have agreed to amend the Trade Practices Act and Commerce Act respectively to allow the Australian Competition and Consumer Commission (ACCC) and the New Zealand Competition Commission (NZCC) to exchange information gathered in the course of investigating competition and consumer protection matters under the agencies’ powers regarding competition and consumer protection matters.
The ACCC and the NZCC have proposed formal annual meetings at commission level to discuss the strategic relationship and issues of mutual interest in the competition, consumer and regulatory areas. The agencies have also agreed to develop a protocol to enhance their cooperation in respect of dealing with the approval of trans-Tasman mergers. These developments are expected to benefit business and consumers on both sides of the Tasman.