Fresh concerns over higher investment threshold
The new limit before approval is needed rises to $NZ477 million for Australian investment in New Zealand, up from $NZ100 million.
A higher threshold for transtasman investment in New Zealand has sparked fresh concerns Australia could take over crucial New Zealand assets.
Prime Minister John Key and Australian Prime Minister Julia Gillard will tomorrow sign the CER Investment Protocol, which sets a higher threshold for investment that does not go through a screening process.
The threshold would be $NZ477 million, up from $NZ100 million, for Australian investment in New Zealand, and $A1.005 ($NZ1.33) billion, up from $A231 million, for New Zealand investments in Australia.
The agreement, which started under the Labour government, was reached in August 2009 between Mr Key and his then Australian counterpart Kevin Rudd.
Labour leader Phil Goff yesterday said higher investment threshold means Australia could rapidly buy New Zealand assets.
"Labour was cautious in terms of the investment protocol. That is why perhaps that was the slowest area in terms of the economic relationship with Australia," he said.
"Power companies like Contact [Energy] are now majority controlled from Australia and other major assets that include assets sold in the 1980s. That was a mistake and we've learned from that mistake; National hasn't."
He said a country of about 21 million people had a far greater ability to take over the assets of a country 4.3 million people.
"We don't want to see strategic assets go outside the control of New Zealanders. That's a policy direction that we've announced."
Mr Goff would not scratch out renegotiating the protocol under a Labour-led government.
"We'll address that problem when we get to it. I have to look at the details."
Mr Key said the threshold was balanced and opened the doors for companies looking to expand.
"For a lot of New Zealand companies, Australia is that first stepping stone they take before they branch out to Asia and other parts of the world. I think we've got the balance about right," he said.
The flow of New Zealand investment in Australia went up from $A953 million since the August 2009 announcement.
The rise is due to Australia giving New Zealand and the US same threshold, which goes up every year in line with GDP growth.
NZPA and NBR staff
Tue, 15 Feb 2011
Tue, 15 Feb 2011
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Fresh concerns over higher investment threshold
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