The Treasury today released two policy perspectives papers in the October round of its working paper series, both of which cover aspects of New Zealand’s financial system.
The preliminary assessment of the first paper, New Zealand Financial Markets, Saving and Investment, is that a lack of development in certain parts of New Zealand’s financial system could be a moderate constraint on the growth and performance of New Zealand firms.
The paper acknowledges the progress that has been made through KiwiSaver and reduced tax on savings funds, but suggests there may be a role for Government in further development of the financial system. There could be further useful measures providing they prove worthwhile in cost-benefit terms.
The second paper, Investor Protection and the New Zealand Stock Market, examines investor protection issues and concentration of ownership, and concludes, based on available evidence, that neither has contributed to underdevelopment of the New Zealand stock market. It suggests it is more likely that other factors, such as low savings in the form of financial assets, the tax treatment of savings and trans-Tasman integration of capital markets have contributed.
The paper concludes that further reforms to the regulatory settings around investor protection beyond the measures already in progress through the Review of Financial Products and Providers are unlikely to have a significant impact on the development of the New Zealand stock market.
Policy perspectives papers reflect the views of the individual authors and should not be reported as Treasury’s view.
Media enquiries on these two papers should in the first instance be directed to Phil Barclay, Senior Communications Adviser, The Treasury.
[Serene Ambler | Senior Communications Advisor]
Officer for Enquiries
[Tel: +64 4 917 6163]