The Government’s final report under the Business Growth Agenda lists useful undertakings to enable better access to capital.
‘Building Capital Markets’ is a useful component of the Agenda to build the New Zealand economy.
However, much more needs to be done to achieve the Government’s goal of New Zealand becoming a magnet for foreign investment.
OECD’s ‘Going for Growth’ Report on the New Zealand Economy said that the country should reduce barriers to Foreign Direct Investments (FDI) and regulatory opacity.
OECD’s three recommendations are that FDI screening requirements should be clarified, ministerial discretion over FDI bids be removed and the revised Regulatory Standards Bill be passed.
These three simple actions would do more than anything else to improve the flow of investment and allow New Zealand businesses to get on with growing exports.
Business is supportive of these simple changes.
The vagueness of FDI rules and ministerial power over them are significantly constraining investment flow to New Zealand.
The Regulatory Standards Bill would require all planned new legislation to conform to standards of transparency, accountability and cost-benefit efficiency.
This Bill should not be left languishing on the Order Paper with little chance of being advanced, as is currently the case.
The Government’s initiatives listed in ‘Building Capital Markets’ are welcome. Changes to foster more efficient private capital markets, along with better equities law and increased support for venture capital programmes are positive.
But if the Government is serious about the goal of making New Zealand a magnet for investment, it must concentrate on fixing the investment and legislative rules that are holding us back.
Phil O’ Reilly is Chief Executive of BusinessNZ based in Wellington
Our Staff Reporter adds:
In their foreword to the Report, Capital Markets Group of Ministers Bill English (Finance), Steven Joyce (Economic Development), Tony Ryall (State Owned Enterprises) and Craig Foss (Commerce and Consumer Affairs) said that Building Capital Markets is the sixth progress report on the Government’s Business Growth Agenda.
They mentioned about the challenge of building well-functioning capital markets and outlined the initiatives that are underway to enable capital markets to become a better engine for growth.
“For New Zealand businesses to be successful, they need to be competitive. And to be competitive, they need access to innovation, capital, skilled workers, resources, supporting public infrastructure, and markets to sell their products. Making it easier for firms to access all six is the focus of the Government’s Business Growth Agenda,” the ministers said.
They said that the Government has established six informal portfolio groups of ministers, specifically grouped around six work streams, to drive the Business Growth Agenda forward and focus on what matters to businesses.
“Across the Business Growth Agenda, the Government is working on over 300 separate actions to improve conditions for business growth.
“We need to ensure that our capital markets fully support businesses that are successfully taking advantage of opportunities in international markets,” they said.