A proposal requiring large, privately-owned companies to publicly report their annual financial data could stymie economic growth, Otago Chamber of Commerce chief executive John Christie said yesterday.
Submissions on the Ministry of Economic Development's statutory framework for financial reporting close tomorrow.
The main objective of the ministry was to create a New Zealand-Australia financial reporting system.
Australia already requires the large, privately-owned companies to undertake an audit and publicly release their financial information.
Mr Christie said those requirements could be a ceiling on how large some companies grew.
The proposed thresholds for the definition of "large" were meeting two of the following: total assets of $10 million, revenue of $20 million and 50 full-time equivalent employees.
"This type of legislation will inhibit people from wanting to cross the line.
"We want our companies to grow into that space - not face barriers."
However, Craigs Investment Partners broker Chris Timms said the requirements for financial reporting, if introduced, could benefit the NZX.
"If they are forced to report publicly, they may decide to become listed companies.
"They will realise they have access to public capital by listing.
"A lot of those businesses are family owned and I understand they won't be too happy making that information public," Mr Timms said.
Mr Christie was concerned competitors of the private companies would have access to the data, along with employees and outside observers.
Asked if the information available would have proven one way or another whether companies were justified in laying off staff during the recession and not increasing pay in some instances, Mr Christie said large companies already could not hide behind those levels of secrecy.
Small and medium enterprises would not be affected by the financial reporting requirements and they made up the majority of industry in New Zealand, he said.
The chamber is one of several organisations submitting on the proposals, which will eventually go to Economics Minister Gerry Brownlee, although no definite timetable has been published.
WHK audit director Phil Sinclair was concerned the proposals could mean two sets of financial reporting rules - one for large private companies and one for smaller enterprises.
A proposed grandfather clause, where existing large businesses were exempted from the reporting requirements, would soften the impact.
