If there was ever a time the sharemarket should have grown, it has been in the past four years.

The economic boom should have seen an influx of new listings but, as one commentator says, there's been "almost nothing".

At the same time, the gradual stream of companies leaving the market in the past couple of decades has looked in danger of quickening to a torrent. Corporate Australia has ridden into New Zealand on a fresh wave of cash borrowed from a pool of savings this country can only eye enviously.

With the fresh and particularly urgent attack of anxiety that New Zealand's sharemarket and wider economy is in danger of being irrevocably hollowed out to the point of the country becoming an Australian branch office, there is at least a growing consensus that now is the time to make the hard decisions that can turn the situation around.

But it won't be easy, so much has already gone.

Having completed their mop up of New Zealand's major banks by buying the Brits out of the National Bank, Australian interests now control all but one of the listed property entities.

Ports of Auckland, Carter Holt Harvey, Powerco and NGC are among the companies that have left the sharemarket in the past couple of years.

It is now also facing the threat that number two stock Contact will effectively be removed from the board by being folded into majority owner Origin, and that Waste Management will be merged with or taken over, depending on your view, by another Australian firm, Transpacific.

Then to top all that off, a long-time market stalwart, Fletcher Building, this week indicated it was looking at a voluntary move across the Ditch to where it does much of its business anyway.

The corporate migration has seen the sharemarket's capitalisation as a percentage of GDP trend down for the past decade. Having peaked at about 56 per cent in 1993, by 1996 it was 54 per cent and, by 2001, it was 37.57 per cent. Although it has now recovered to 44 per cent, this is largely due to surging share prices rather than any increase in listings.

And that 44 per cent, unfortunately, is low by world standards. In contrast, the Australian Stock Exchange's total market cap is 106 per cent of GDP.

David Skilling, of the New Zealand Institute, says the major downside of such a shrinkage includes the impact on the Government's tax base, the relocation of major strategic decision-making overseas and the loss of the infrastructure that supports the markets themselves.

"Be it equity researchers or lawyers, if the centre of gravity shifts even more in the direction of Australia or further afield, the incentive is for people to exit for larger markets.

"That makes it more difficult for the next generation of New Zealand firms to raise capital for expansion and investment. There are some significant long-term economic risks in addition to the immediate losses."