Friday 2nd of November 2007

One of the things I was looking out for in the Cabinet reshuffle this week was what happened to the Minister of Commerce. Lianne Dalziel has been running this portfolio, which has in its brief regulation and control of the financial sector, including advisers and finance companies. There was a thought that she may have been replaced in this role, however that didn’t happen. Dalziel has done a pretty good job in understanding issues and being prepared to listen to arguments when change is being considered. However, there is a view, starting to be expressed more loudly in some quarters, that she has been far to slow to act in tidying up the finance company (or non-bank deposit taking) sector, and indeed the area of financial advice. One of the issues which is starting to get traction is that New Zealand law offers very little in the way of investor protection. This may start to become a bigger issue as next year’s general election moves closer and people realise how much money they have lost. While she is still in this role, Dalziel maybe well-advised to speed up changes in this area as it could well become a soft spot for the government. A few elections back NZ First Winston Peters spent some time on this issue, but failed to get much traction. This time around, with the events which have taken place, a political party could well hone in on this area. More importantly though, if the sector is to grow and people are encouraged to save and take advice, then they deserve some half-decent protection.