Liam Dann, Herald Business Editor, blogs on capital markets
The relevance of capital markets to the lives of ordinary New Zealanders remains grossly misunderstood.
Scarred by the failings of 1980s and 1990s, many see markets solely as a means by which foreign capitalists can plunder our resources.
The fact that this has happened before is something the nation needs to get over if we are to ensure it does not happen again.
We need to get smarter about how we run markets and we need to ensure that they are strong enough to meet the challenge of global competition.
Forget about the machinery of markets for a moment - the jargon and the complex numbers. Strong local markets breed strong local companies.
And strong local companies bring with them jobs that are challenging, interesting and well paid. These are the jobs we want for ourselves and our children.
That's the reason why we should care about the Capital Market Development Taskforce, which reports back on Wednesday.
Of all the taskforce reports we are being bombarded with this is the one least likely to be the hotly anticipated by the average Kiwi punter.
But ultimately it is the one that may deliver the most practical pathway towards lifting the nation's productivity and wealth.
Certainly the team on the capital markets taskforce is unlikely to repeat the indulgence of Don Brash's 2025 Taskforce.
But next week the Government is likely to face recommendations for some politically difficult decisions. We may see calls for compulsory KiwiSaver, we may see calls to for the float, or partial float, of state-owned assets.
The report will present challenges but let's hope the Government sees it as an opportunity.
John Key's understanding of financial markets gives him a rare insight in to their power and potential to change worlds. That they can change things for the good is taken for granted at the best of times - and these aren't the best of times.
It will be Key's job to sell the positive power of markets to the population. It is no easy task, but it's a task too important to avoid.
Despite the best efforts of Mark Weldon and his team at the NZX, the local market is precariously placed. It is always just a couple of big takeovers away from dropping below a sustainable level of depth.
Next week Weldon and his fellow taskforce members will deliver a prescription for change. It is up the Government to deliver the medicine.
