The Government is taking steps to invigorate New Zealand’s capital markets to encourage investment in infrastructure and productive businesses, Commerce and Consumer Affairs Minister Andrew Bayly says.
“Kiwis work incredibly hard but do not see the same level of return for their labour as other advanced nations. The Government is committed to turning this around and improving productivity so that Kiwis can benefit from higher living standards.
“Part of the problem is our relatively shallow pools of capital, meaning businesses often struggle to raise money to invest in labour saving technology and equipment.
“That’s why the Government is progressing a package of reforms to unlock capital for the benefit of New Zealand’s economy.
“The package is made up of two strands of work that will begin now, plus a commitment to undertake further work in 2025
- The first strand includes changes to make it easier for KiwiSaver funds to be invested in unlisted assets, such as infrastructure projects and great New Zealand businesses, where it is the interest of KiwiSaver members.
- The second strand of work is a series of adjustments to reduce the costs and barriers faced by companies listed or listing on the New Zealand Stock Exchange (NZX).
“There is over $120 billion invested in KiwiSaver. Currently, most of these funds are parked offshore in foreign stock exchanges, generating little good for New Zealand’s economy. Similarly, only around 3 per cent is invested in unlisted assets, compared to around 16 per cent of Australian superannuation funds.
“Leveraging the money held in KiwiSaver to invest in unlisted assets, particularly domestic ones – such as transport projects, renewable energy generation or large-scale housing developments – would be a win-win.
“For unlisted Kiwi businesses, it means more capital to innovate and grow. For Kiwi investors, exposure to different asset classes means risk diversification and potentially higher returns.
“Separately but relatedly, we are progressing changes to improve the competitiveness and attractiveness of the NZX.
“The fact that only a handful of companies have chosen to list on the NZX in recent years speaks to the unattractiveness of our capital markets.
“A particular concern is the cost associated with providing forward-looking financial information – known as prospective financial information – as part of an Initial Public Offering and the burden of complying with the climate-related disclosures regime.
“To address these issues, we are introducing greater flexibility about how companies provide prospective financial information and proposing changes to the climate disclosures regime to better align ourselves with our international peers – especially our closest economic partner, Australia.
“We know New Zealand urgently needs to address our falling productivity and failing infrastructure. Healthy, vibrant capital markets offer huge potential to address these issues and support competition and innovation for the benefit of hardworking Kiwis.”
Notes to editors:
The two consultations, led by the Ministry of Business, Innovation and Employment, open today and close on 14 February 2025 and can be found on the MBIE website