New Roundtable chief wants guarantee scrapped

The Crown Retail Deposit Guarantee Scheme should be scrapped immediately, says the new chairman of the Business Roundtable.

Roger Partridge, a litigation expert and chairman at law firm Bell Gully, told BusinessDay the finance companies' collapse meant the sector, regulation and the law needed proper scrutiny.

"[It] raises questions about business judgment of some of the companies operating in that sector as well as about the performance of our regulators and some aspects of law," he said.

Last week the government announced it would pay $1.7 billion to South Canterbury's debt holders after its receivership triggered the deposit guarantee.

Mr Partridge said the company's collapse "underlines the risk to taxpayers of government deposit insurance arrangements which should be terminated as soon as possible".

He said the Economic Development Ministry discussion paper on the Securities Act had positive features "but also weaknesses". The new legislation was due to come in next year but may now be delayed until 2012.

"More generally, we need to get the policy settings right – prudent fiscal management and monetary policy – and we need the government to press on with a regulatory reform agenda."

He warned that over-regulation could be just as damaging.

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