New Securities Bill a Government Smokescreen
Wednesday 7 Nov 2001 Stephen Franks Press Releases -- Commerce
ACT Commerce Spokesman Stephen Franks says that Commerce Minister Paul Swain is misusing his power by suddenly pushing
forward a large Securities Bill. "It is to divert attention away from the Prime Minister's bizarre behaviour during the
last weeks of the Air New Zealand debacle."
"Paul Swain claims the Securities Markets and Institutions Bill will improve confidence in the New Zealand sharemarket.
The Bill has a lot of legal ya da ya da ya da, but is really a move to import Australian securities law into New
Zealand. Nobody should take confidence from that.
"The Securities Commission should have reported before now on uninformed and misinformed trading in Air New Zealand
shares. There is no doubt the Government breached the due diligence rules. With this Bill in the House the Securities
Commission can boldly blame the NZSE and the Market Surveillance Panel, and allege poor rules, but avoid dealing
directly with the PM's conduct, unless public reaction now forces otherwise. Springing the new Bill at this time is just
the Government's tactic for distracting people away from its own behaviour.
"The Government has not published any proper policy analysis on this Australianisation. There should have been a White
Paper months ago so that New Zealanders had facts on which to base evaluation of this move. 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 will lead to the transfer of most of our broking and capital raising industry to Sydney. Australian practice
requires constant contact and good relations with the regulators, who have enormous discretions. As NZ companies have to
employ Australian advisers, local activity will be strangled by Australian level compliance costs. They are about three
times the level in New Zealand, with no evidence of routinely better outcomes in terms of market honesty, or access to
capital for growing smaller enterprises.
"This legislation effectively signals the abandonment of New Zealanders' opportunities to develop as competitors, using
better law than Australia," 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.