Prime Minister John Key has slammed bureaucratic pin-pricking over the proposed New Zealand financial services hub as "absolute rubbish" and stepped in to put the project on the fast-track.
Economic Development Minister Gerry Brownlee has been ordered to produce an urgent paper covering a zero tax rating for the relevant foreign funds which Key wants incorporated in the November taxation bill and passed by April 1 next year.
The Prime Minister's frustration with Ministry of Economic Development officials spilled over publicly during a question session at an Auckland dinner on Tuesday night where he stressed New Zealand needed to be more optimistic and back success.
"There's been a whole series of advice coming from MED which basically says 'if you want to do this, you've got to deliver the Magna Carta of documents'," Key told the International Business Forum audience.
"'You've got to do all these things and need bipartisan support' and [so] it goes - on and on and on."
Key went on to say MED's approach was "absolute rubbish".
"I don't need the Magna Carta of documents - just get on and do something - which is why I have told Gerry to deliver me a paper that has zero rating of funds and we'll work on that."
Craig Stobo - who chairs the Government-appointed group which was tasked with working out how an international funds services industry could be created here - is delighted the proposal has got Government approval.
Stobo said if a zero rating for the relevant funds (international funds which are not invested in New Zealand but are administered out of NZ) is incorporated in the November taxation bill, "it will be a signal to the rest of the world we are serious".
Stobo's group reported to Brownlee in May. But he noted the minister has had other urgent issues to deal with including the Canterbury earthquake and Pike River disaster.
Key told the Business Herald he had "got the numbers" to get the legislation passed and Inland Revenue and the Treasury had signed off that it would not affect the tax base.
Key is confident New Zealand will be able to attract financial funds to place their back office administration here saying a chief executive of one of the world's most powerful banks had told him: "If you are prepared to zero-rate foreign funds that are not invested in NZ, we're going to move $2.5 billion of funds here in two years because you're 50 per cent cheaper than Australia."
Visiting Hong Kong Financial Secretary John Tsang welcomed the Prime Minister's intention saying if New Zealand develops a financial services hub it will help to grow the worldwide industry.
Earlier reports to the Prime Minister suggested the administration of financial services could become a billion-dollar industry and create 3000 to 5000 new high-paying jobs.
The Government is not planning a "big bang" launch but expects the hub to grow organically.
Brownlee believes New Zealand's transparent, stable and neutral legal systems, high quality regulatory and tax environments, deep pool of talent and time zone advantage amount to a unique offering "particularly in light of the global financial crisis".
But Stobo stressed the Government also had to address two other issues: Ensure investor protection standards are adequate and promote the quality of the regime.
He said the new securities legislation should include clauses to cover investor protection and wanted the new Financial Markets Authority to be tasked with promoting the New Zealand regime to its international counterparts.
Key itching for quick action on financial hub
Prime Minister John Key. Photo / Steven McNicholl
