KEY POINTS:
When Labour entered government nine years ago, it looked out over a "regulatory wasteland", says Commerce Minister Lianne Dalziel.
Under Labour, she claims a sterling record of business regulation reform.
Critics respond by pointing to the finance company sector review - which came too late - increasingly onerous employment law, and a slow pace of change on business compliance.
Dalziel says go back to the scene following the 1987 sharemarket crash, when the National Government of the 1990s failed to properly clean up the business and investment regulatory environment.
"We had to go in and rebuild from scratch. People forget so quickly, but we had a Takeovers Panel that had nothing to do, the Takeovers Code hadn't been implemented."
Labour set about a major programme, starting with the 2002 securities markets legislation which dealt with insider trading and market manipulation.
She says it then moved on to the regime for supervising registered exchanges, which the NZX became. "Our number one focus was to get our capital market regime into world standards. If we want to attract international investment then our securities laws have to be ship-shape."
Next step was the review of financial products, their providers, and the intermediaries who sold them, which began in 2005.
Unfortunately, the house of cards which was the finance company sector started collapsing mid-review, with the failures of National Finance 2000 and Provincial Finance in June 2006. Western Bay Finance followed soon after. "I will admit to many sleepless nights, wondering if there were going to be more," Dalziel says.
The Government pushed on, and by June last year had its ducks in a row that would lead to the Financial Advisers Bill - which passed last month and regulates financial planners - and the Financial Service Providers Bill.
Bridgecorp fell over last July, beginning the domino effect that left Kiwi investors millions of dollars out of pocket and all but killed the non-bank sector.
Dalziel defends Labour's timing. "I honestly don't think that we did things in the wrong order.
"There's only a certain amount of expertise within the Ministry of Economic Development and they had their work programme cut out for them from day one."
Commentator and fund manager Brian Gaynor agrees that under former Commerce Minister Paul Swain, things were steaming ahead. But Dalziel did not move reform along "with anything like the same speed", he says. "They dealt with the capital markets first, but they should have dealt with the other things a lot quicker."
Lawyer Mark Lowndes, of Auckland firm Lowndes Associates, does not buy the argument that officials were too snowed under to deal with the finance company sector. "I don't think Labour's been overly economical in its staffing of the public sector."
Lowndes believed business needed help in the areas of employment law and the enforcement of competition law in relation to telecommunications.
"I don't think many businesses would say the way employment is regulated is helpful," he says. "The Holidays Act is now so complex I have to get legal advice on it."
Lowndes says it's ridiculous that the only way to terminate an employment relationship is either by redundancy or a protracted process of making someone wrong. He says there should be provision for no-fault termination, perhaps with a two-month notice period.
He also believes the Commerce Commission is not sufficiently funded to fully enforce competition law, which has been plain in telecommunications. "At every stage Telecom has successfully dragged its feet."
He says this is continuing in the cellphone market, as Vodafone and Telecom are each extracting high mobile phone charges from businesses.
John Walley, CEO of the Manufacturers and Employers Association, says changes such as the realignment of provisional tax and GST payments have been useful. "There certainly has been an effort from Lianne Dalziel to make a difference."
But he says compliance with KiwiSaver and other employment issues have added to small business owners' burden. "Words such as `where practical' in legislation are just great for the lawyers." Walley says there has been a lot of talk about simplification but little has fed through.
Dalziel says Labour's single business reporting system - in which businesses will satisfy the information needs of all government departments by electronically filing their details to a central point - is due for consideration at the next Budget.
Dalziel is also proud of the new regulatory impact analysis unit, part of the Treasury since October 1. It means the Treasury requires other departments to deliver a statement on how regulatory changes will affect business, before the changes are made. John Walley calls the moves "a step in the right direction".
By the rules
Labour's regulatory achievements:
* Implementation of the Takeovers Code, protecting small shareholders
* Securities markets legislation, cracking down on insider trading
* Regime supervising registered exchanges, like the NZX
* Financial Advisers Act, regulating financial advisers
