Biggest year in a decade: Arkinstall
The financial services industry is gearing up for the biggest year in at least a decade, says Investment Savings and Insurance Association chief executive Vance Arkinstall.
Tuesday, January 17th 2006, 6:23AM
by Rob Hosking
Moves to encourage private savings, through the KiwiSaver workplace saving scheme; the co-regulatory framework for financial advisers and other financial intermediaries; and changes to how investments are taxed will – if all goes according to plan – take shape this year.
“It looks to me as though 2006 is going to be the most important year we’ve seen for at least 10 years,” Arkinstall says.
“And given the complexity of the issues involved, no-one is likely to want to make any major changes for a long time. This really is going to be a pivotal year.”
The first legislative cab off the rank is likely to be KiwiSaver. The government plans to introduce that to Parliament either late next month or early in March, with select committee processes to take up the middle of the year and enactment by spring.
The scheme, which will involve every employer in the country, is scheduled to start from April next year. The tax changes are set to be implemented at the same time, and some, at least, are crucial to KiwiSaver.
Although the possibility of separating changes to how offshore vehicles are taxed out from domestic investments, and putting the offshore changes back a year, was floated last year Finance Minister Michael Cullen ruled that out just before Christmas, although he hinted a few new options are being considered.
Implementation of the recommendations of the Task Force on Financial Intermediaries will also take place over the course of the year.
Cabinet has approved the recommendation in principal and consultations on the co-regulatory model are already under way with the various industry groups.
Alongside those three policy changes is the Review of Financial Products and Providers, which includes a review of how insurance is regulated.
Although that is not scheduled for implementation until 2008, a great bulk of the work will be done this year.
“The industry has been talking about a lot of these issues for years and this year will see some changes at last,” says Arkinstall.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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