Commerce Minister Complains To ASX About Self Mutilation

Wednesday 23 Jan 2002

New Zealand businesses facing extra compliance costs on the ASX are now paying the price for the business ignorance of Commerce Minister Paul Swain and his overbearing leader, says ACT Commerce Spokesman Stephen Franks.

"Complaining to the Australians about the ASX decision not to continue mutual recognition of New Zealand-listed companies, merely makes worse the position the Minister created last year.

"A year ago Ministers Cullen and Swain were busy giving the Australians the impression that they would push the NZSE into the ASX takeover. For political mileage here they falsely claimed New Zealand was a Wild West regime. That just played into ASX hands. It was what they wanted to hear to enable a platform for the move they have now made, to try to force New Zealand companies to abandon the NZSE.

"No strategic analysis supported the Government's enthusiasm for merger of the exchanges. Gradually the implications for New Zealand financial independence and prosperity emerged.

"The Securities Markets and Institutions Bill is the result. As usual, appeasement is useless for fending off Australian designs. It simultaneously destroys some of the remaining competitive advantage New Zealand might have exploited.

"The bill was introduced prematurely to distract from Helen Clark's market-manipulative statements about Air New Zealand. The real reason for low confidence in our sharemarket is the failure of our justice system to ensure that existing law is enforced. That does not take new law, it just takes commitment to ethical conduct. Why then should the Government expect its new laws to work - except perhaps in a few political show trials? There has been no Government will even to fund show trials. A Government that connives to block enforcement of existing law against the powerful (but not the small fry) will never generate basic honesty, which is the main reason for legitimate investor concern.

"The bill is all about the Government saying things it might do, by giving itself new powers - when it has shown already that it is not willing to uphold existing law. The Australians, if they take at face value the Government's own accusations about the NZ regime are right to wait and see whether key things will happen and whether powers available are used.

"Instead of all this, the Government should be making sure that business law of all sorts is readily enforceable and winning a case does not leave the winner out of pocket. The bill should be replaced with something dealing with the real problems - instead of cosmetics," Stephen Franks said.

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