25 July 2005 Media Statement

Australia/New Zealand business co-ordination review

A review of the Memorandum of Understanding (MoU) on business law
co-ordination with Australia was announced today by Commerce Minister Pete Hodgson.

The MoU was signed in 2000 and was due for a review after five years. The Australian and New Zealand governments have agreed on Terms of Reference for the review.

“This review is an opportunity to look at the work programme under the MoU and identify any areas where the it may be strengthened," says Pete Hodgson.

The review will look at:

- whether the framework set up by the MoU needs to be modified

- what amendments need to be made to the MoU to reflect the changes in the commercial environment over the past five years, and
- how the MoU can be amended to enhance future business law co-ordination.

“Trans-Tasman business is of vital importance to our economy. It is supported when we take the opportunities available to co-ordinate business law and frameworks.

“Better co-ordination has been called for by the business community on both sides of the Tasman and we are interested in their views on the MoU and how it could be improved."

The review will be carried out jointly by the Ministry of Economic Development and the Australian Treasury. The closing date for submissions is 7 September 2005.

Comments received from interested groups will be taken into consideration. Australian and New Zealand officials are due to report to the two governments by the end of October.

ENDS

Background Information

What are the basic principles of the MoU currently?

The focus of the MoU is on finding ways to reduce transaction and compliance costs and on increasing competition. It is recognised that an array of approaches exist to achieve the goal of increased coordination in business law. The operation of the MoU takes into account that one single approach is not necessarily suitable in every area, nor is the adoption of identical laws. Rather, the focus of the work done under the MoU is to find ways to deal with differences so that they do not create barriers to trade and investment.

What is currently on the work programme under the MOU?

The MoU contains an annex of eight areas identified as possible candidates for co-ordination.

These are:

1. Providing for the cross recognition of companies
2. Seeking greater compatibility in disclosure regimes for financial products
3. Managing cross border insolvency
4. Providing a regulatory framework for mutual recognition of share markets between New Zealand and Australia
5. Exploring co-ordination in the granting and recognition of intellectual property rights
6. Sharing information and jointly participating in policy and education programs on consumer issues relating to business law
7. Seeking greater consistency in legislation on electronic transactions, and
8. Exploring the potential for greater consistency in application and enforcement of competition law.

How do people make a submission?

The MoU, the terms of reference for the review, the process for making a submission and the specific questions officials would like feedback will be available on the Ministry of Economic Development’s website from Tuesday, 26 July.

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