There are more tales of companies leaving the NZX, and the question is asked (via a workshop) whether the Government could step in. I really fail to see what more this Government would materially do to solve for a market that is simply too small. Not that there aren’t any possibilities, just that most would be unpalatable for this Government.
Cullen has already started Kiwisaver, and distorted the capital gains rules to skew investors towards down under markets, both of which will bring more investor money.
So here are ten more things the Government could do:
1: List a big chunk of remaining the State Owned Enterprises, including more of Air NZ.
2: Change the laws that currently require too much paperwork before people can invest or move money. Let me apply and get a brokerage account instantly.
3: Push for a full merger of NZX with ASX – which has critical mass, and global companies listed. This would also mean the Australian owned NZ assets would be back in the “local” market.
4: Lower the corporate tax rate for NZ publicly listed companies (and other companies). This needs to be a dramatic lowering, not a few percent. Think Ireland.
5: Bring them back – lower the top personal tax rates and bring in other measures to attract and retain some of the Kiwi diaspora. This talent will help create the next wave of companies.
Along with 4 and 5, make sure we lose the disjointed tax system where the top corporate tax rate is different from the top personal tax rate, thus creating a booming industry in tax avoidance, at the expense of time and money spent on helping industry boom.
6: Legislate, or push NZX to insist, for much greater depth and frequency of disclosure for companies listed in NZ. Back it up with real teeth.
7: Legislate against insider trading and dealing – NZ has a reputation for cozy deals, and it is time that reputation was eliminated. Mandate what boards should do when an offer is received. Make sensible, not SOX level, corporate governance procedures – simple, friendly and transparent. Think Delaware.
8: Cajole Fonterra into listing. We all want a slice of those payouts, and we could create some very wealthy farmers along the way.
9: Double the dollars and efforts around all levels of education. This investment always pays in the long run.10: Finally, but quickly, drop a billion dollars on decent broadband infrastructure. Just make sure we do not end up beholden to one supplier of technology or service.