1 00:00:00,040 --> 00:00:02,280 Speaker 1: The government is making changes to try and get more 2 00:00:02,320 --> 00:00:05,680 Speaker 1: capital flowing around the economy. Commerce and Consumer Fairs Minister 3 00:00:05,720 --> 00:00:07,840 Speaker 1: Andrew Bailey, he's come out and he's going to make 4 00:00:07,840 --> 00:00:10,680 Speaker 1: it easier for key we Saver funds to invest in 5 00:00:10,880 --> 00:00:13,880 Speaker 1: unlisted companies and assets. He's also going to try and 6 00:00:13,880 --> 00:00:16,160 Speaker 1: remove some of the hurdles some of the barriers that 7 00:00:16,320 --> 00:00:19,160 Speaker 1: the listed companies on the end index face, like climate 8 00:00:19,239 --> 00:00:21,840 Speaker 1: change rules, et cetera. Kirk Hope, the CEO of the 9 00:00:21,880 --> 00:00:25,640 Speaker 1: Financial Services Council, he's with me tonight, Kirk gooday, today, 10 00:00:25,840 --> 00:00:28,160 Speaker 1: you do good, Thank you. Let's talk with the keep 11 00:00:28,160 --> 00:00:31,880 Speaker 1: we Saver funds. First, why can't key we Saver funds 12 00:00:31,880 --> 00:00:34,920 Speaker 1: invest in unlisted companies? Now, what's the logic for that? 13 00:00:36,240 --> 00:00:39,360 Speaker 2: So they can? It's just very difficult because there's some 14 00:00:39,400 --> 00:00:42,360 Speaker 2: liquidity rules that are that are in place, and so 15 00:00:42,400 --> 00:00:45,640 Speaker 2: what does that actually mean. It's because because kee we 16 00:00:45,760 --> 00:00:49,560 Speaker 2: savers can withdraw funds out of the out of the 17 00:00:49,640 --> 00:00:53,000 Speaker 2: keep Saver fund after the hit retirement age. So that's 18 00:00:53,040 --> 00:00:56,440 Speaker 2: that's something they can do now. It just means that 19 00:00:56,720 --> 00:01:00,480 Speaker 2: there are some rules in place, which means that that 20 00:01:00,760 --> 00:01:05,000 Speaker 2: if they weren't in place, you know, make it easier. 21 00:01:05,080 --> 00:01:07,559 Speaker 2: It makes it easier for those key savers, were harder 22 00:01:07,600 --> 00:01:09,640 Speaker 2: for those KEP savers to withdraw. So if you've got 23 00:01:09,680 --> 00:01:12,000 Speaker 2: an what's called an a liquid asset, you know, if 24 00:01:12,000 --> 00:01:14,360 Speaker 2: you're talking about an infrastructure fund that you might have 25 00:01:14,400 --> 00:01:17,920 Speaker 2: a long long life that would be seen as an 26 00:01:17,920 --> 00:01:20,200 Speaker 2: an I liquid asset. You know, that means the fund 27 00:01:20,240 --> 00:01:22,880 Speaker 2: can't liquidate it and pay it out or pay a 28 00:01:22,920 --> 00:01:25,120 Speaker 2: portion of that out. So there's there's some things that 29 00:01:26,120 --> 00:01:29,760 Speaker 2: Minister Bailey's done here to make it easier for for 30 00:01:29,880 --> 00:01:32,280 Speaker 2: KEP we save fund managers to invest in some of 31 00:01:32,280 --> 00:01:33,480 Speaker 2: these less liquid assets. 32 00:01:33,680 --> 00:01:35,440 Speaker 1: How do you do that? Then if you need your 33 00:01:35,440 --> 00:01:36,200 Speaker 1: money out. 34 00:01:36,640 --> 00:01:38,640 Speaker 2: Well, there's there's a couple of things that they're looking at, 35 00:01:38,680 --> 00:01:43,880 Speaker 2: for example, extending or asking key we savers for example, 36 00:01:43,920 --> 00:01:46,240 Speaker 2: if they want to invest in those types of assets, 37 00:01:46,280 --> 00:01:48,120 Speaker 2: if they want their funds to be invested in those 38 00:01:48,160 --> 00:01:51,400 Speaker 2: types of assets, and then having a longer notice period. 39 00:01:51,400 --> 00:01:55,160 Speaker 2: For example, the current notice periods ten days, and so 40 00:01:55,400 --> 00:01:57,440 Speaker 2: you know that might be that might stretch out to 41 00:01:57,480 --> 00:02:00,200 Speaker 2: thirty days or something, but they're going to consult on 42 00:02:00,200 --> 00:02:02,400 Speaker 2: on it and come back to the market. 43 00:02:02,600 --> 00:02:06,880 Speaker 1: So you would basically forego some flexibility around withdrawal in 44 00:02:07,080 --> 00:02:10,120 Speaker 1: order to be able to invest in these more liquid assets. 45 00:02:10,840 --> 00:02:11,880 Speaker 2: Yeah, as an investor. 46 00:02:11,960 --> 00:02:15,320 Speaker 1: As an investor, yeah, cool. Interesting. So that's one side 47 00:02:15,320 --> 00:02:18,600 Speaker 1: of the equation, isn't Is it, by the way, something 48 00:02:18,639 --> 00:02:20,639 Speaker 1: you think that the key saver funds will actually want 49 00:02:20,680 --> 00:02:21,480 Speaker 1: to do as well. 50 00:02:22,360 --> 00:02:26,920 Speaker 2: There's some that have managed to work through some of 51 00:02:26,919 --> 00:02:30,080 Speaker 2: the some of the more difficult issues with that liquidity 52 00:02:30,120 --> 00:02:34,079 Speaker 2: management process. So for example, I think simplicity here and 53 00:02:35,240 --> 00:02:38,560 Speaker 2: have have some housing investments. So you know, typically this 54 00:02:38,680 --> 00:02:41,480 Speaker 2: is just to make it easier for more more key 55 00:02:41,480 --> 00:02:44,639 Speaker 2: we saver funds to invest in those longer term assets. 56 00:02:45,320 --> 00:02:48,880 Speaker 2: So yeah, I think it will make a difference most certainly. 57 00:02:48,720 --> 00:02:52,000 Speaker 1: What types of projects tunnels, railed, stuff like that. 58 00:02:52,840 --> 00:02:55,720 Speaker 2: Yeah, anything where there's an income that can be extracted 59 00:02:55,720 --> 00:02:57,680 Speaker 2: out of the asset if you like, over a long 60 00:02:57,680 --> 00:03:00,520 Speaker 2: period of time. It would be it would be would 61 00:03:00,520 --> 00:03:04,480 Speaker 2: be roads, tunnels, housing potentially or larger housing estates and 62 00:03:04,520 --> 00:03:06,920 Speaker 2: stuff like that, build to rent housing for example. 63 00:03:07,240 --> 00:03:09,639 Speaker 1: Let's talk about the changes on the other side of 64 00:03:09,639 --> 00:03:12,000 Speaker 1: the equation here. This is to do with companies that 65 00:03:12,160 --> 00:03:16,040 Speaker 1: don't aren't listing on the z X. They're kind of 66 00:03:16,040 --> 00:03:18,600 Speaker 1: maybe on the threshold and they just think they're actually 67 00:03:19,000 --> 00:03:21,840 Speaker 1: too hard basket. There are some hurdles, there are some 68 00:03:22,000 --> 00:03:25,040 Speaker 1: compliance costs from being on the n z X, and 69 00:03:25,120 --> 00:03:26,720 Speaker 1: the Minister is going to take a look at those. 70 00:03:26,720 --> 00:03:28,519 Speaker 1: What do you make of his moves in that space. 71 00:03:29,240 --> 00:03:33,120 Speaker 2: Yeah, I think it's actually really really good move if 72 00:03:33,120 --> 00:03:35,760 Speaker 2: you look. So that one of the key things that 73 00:03:35,320 --> 00:03:38,520 Speaker 2: the government's doing and the Minister is doing it making 74 00:03:38,560 --> 00:03:42,160 Speaker 2: what's called prospective financial information voluntaries. So when you list, 75 00:03:42,200 --> 00:03:45,120 Speaker 2: you've got to go through a process of providing and 76 00:03:45,160 --> 00:03:51,280 Speaker 2: publishing forward looking prospective financial information about the company for investors. 77 00:03:51,680 --> 00:03:54,640 Speaker 2: So the costs are pretty expensive. They can be from 78 00:03:54,760 --> 00:03:57,640 Speaker 2: five to fifteen percent of the total IPO costs, So 79 00:03:57,920 --> 00:04:00,520 Speaker 2: that is quite a significant barrier if you're you know, 80 00:04:00,520 --> 00:04:03,680 Speaker 2: if you're relative living, modest sized firm, but you really 81 00:04:03,720 --> 00:04:07,560 Speaker 2: need to get capital in. The information is not necessarily 82 00:04:07,600 --> 00:04:11,800 Speaker 2: helping investors. That was the feedback from the investor community. 83 00:04:10,840 --> 00:04:13,960 Speaker 2: So so what the government of doing is looking at 84 00:04:14,760 --> 00:04:19,680 Speaker 2: looking at making that voluntary and then that'll enable that 85 00:04:19,760 --> 00:04:22,680 Speaker 2: will remove some of those costs out of the IPI process. 86 00:04:22,800 --> 00:04:26,120 Speaker 1: One of those areas is climate disclosures. You have to 87 00:04:26,160 --> 00:04:29,039 Speaker 1: disclose what your impact on the climate is do other 88 00:04:29,080 --> 00:04:31,040 Speaker 1: countries do that? Does Australia make you do that? 89 00:04:32,560 --> 00:04:37,240 Speaker 2: Yeah? They do. Actually, so we already have climate related 90 00:04:37,279 --> 00:04:42,320 Speaker 2: disclosure requirements, but they occurre it very low threshold, so 91 00:04:42,360 --> 00:04:45,480 Speaker 2: if you're a sixty million dollar market cap company, you 92 00:04:45,520 --> 00:04:48,240 Speaker 2: would have to be disclosing. What the government and the 93 00:04:48,279 --> 00:04:50,919 Speaker 2: Ministry of proposing to do is raise that to a 94 00:04:50,960 --> 00:04:55,400 Speaker 2: five hundred and fifty million dollar cap for market capitalization. 95 00:04:57,040 --> 00:05:00,360 Speaker 2: And then there are some other things which I will 96 00:05:00,360 --> 00:05:04,400 Speaker 2: also think will help. At the moment, there is some 97 00:05:04,440 --> 00:05:07,400 Speaker 2: significant direct to liability for some of the if you 98 00:05:07,520 --> 00:05:10,560 Speaker 2: make if you breach some of the climate related disclosure 99 00:05:10,640 --> 00:05:14,200 Speaker 2: requirements if you're a director, so there's personal liability for 100 00:05:14,240 --> 00:05:18,000 Speaker 2: some of those breaches. There will still be liability for directors, 101 00:05:18,279 --> 00:05:20,839 Speaker 2: for example, for things we have acted deliberately or recklessly. 102 00:05:21,000 --> 00:05:24,440 Speaker 2: But one of the things that certainly we've been seeing 103 00:05:24,560 --> 00:05:28,440 Speaker 2: is that the costs to get that climate related disclosure 104 00:05:28,440 --> 00:05:33,000 Speaker 2: stuff right is very very expensive for companies and so 105 00:05:33,000 --> 00:05:35,080 Speaker 2: so this is a positive change. And that they're also 106 00:05:35,120 --> 00:05:38,839 Speaker 2: doing some stuff around increasing the thresholds for funds as well, 107 00:05:38,920 --> 00:05:41,920 Speaker 2: up to five billion from one billion. So overall that 108 00:05:42,000 --> 00:05:44,760 Speaker 2: aligns us with Australia and that that is a positive 109 00:05:44,800 --> 00:05:45,320 Speaker 2: thing as well. 110 00:05:45,760 --> 00:05:47,760 Speaker 1: Kirk, thank you very much for that. Kirk Courk Financial 111 00:05:47,760 --> 00:05:51,200 Speaker 1: Services Council CEO on changes that the Minister Andrew Bailey 112 00:05:51,240 --> 00:05:53,640 Speaker 1: is making and looking at making both too can we 113 00:05:53,680 --> 00:05:57,679 Speaker 1: savor but also to hurdles that's stopping businesses from getting 114 00:05:57,680 --> 00:05:58,480 Speaker 1: on the NXT exit. 115 00:05:59,080 --> 00:06:01,280 Speaker 2: For more from Head Duplessy Allen Drive. 116 00:06:01,440 --> 00:06:04,880 Speaker 1: Listen live to News Talks at B from four pm weekdays, 117 00:06:04,960 --> 00:06:07,160 Speaker 1: or follow the podcast on iHeartRadio.