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Taupo Group Has A Plan To Improve Capital Markets

Fuseworks Media
Fuseworks Media

Wellington, Sept 25 NZPA - A group of business people met in Taupo mid year to discuss what could be done to improve the capital markets that generate wealth in New Zealand.

It was an informal meeting in response to the global financial crisis outside the usual business talking shops such as the Business Roundtable and Business New Zealand.

The Taupo Group commissioned research by former BT Funds Management chief executive Craig Stobo who presented a "primer" to the Institute of Finance Professionals conference in Auckland this week. Politicians are also being briefed.

Mr Stobo has come up with a list of things that need to be done, many of them to do with anomalies in the tax system, improving financial literacy and the Government's method of managing its businesses and superannuation investments.

The Taupo Group believed that developing New Zealand's capital markets would reduce the risks associated with the country's heavy reliance on overseas savings, the report said.

The report suggests increasing the involvement of New Zealand Superfund in local capital markets and that the Government's Debt Management Office should become the New Zealand Asset Liability Management Office, managing government owned assets "as a changing set of portfolio risks" at arms length from politicians.

The report questions whether the Kiwisaver default schemes will serve savers and whether they need more education about choices.

More financial education in schools is suggested as is a rebuilding of trust in the integrity of the financial services industry.

Changes to a levy on bond issuers is suggested as a way to build the corporate bond market.

Five suggestions are made in the area of imputation taxes which affect investments in shares.

These include allowing imputation credits to apply in some areas where they currently don't, mutual recognition of credits with Australia, relaxing shareholder continuity rules that rob companies of tax credits and recognising foreign tax credits for New Zealand shareholders.

The people who attended the meeting were from ABN Amro Craigs, ASB Securities, Deloitte, First NZ Capital, HRL Morrison and Co, Macquarie Equities, Russell McVeagh, ABN Amro Craigs, Chapman Tripp, Direct Broking, Forsyth Barr, Tyndall Investment Management, ANZ National Bank, Citigroup, Fisher Funds Management, McDouall Stuart, NZX and UBS New Zealand. Endace and Xero were also represented.

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