Overseas investment will be under closer government scrutiny with more veto power in the hands of ministers.Finance Minister Bill English this afternoon announced cabinet ministers will have extra flexibility to consider a wider range of issues, whi
Overseas investment will be under closer government scrutiny with more veto power in the hands of ministers.
Finance Minister Bill English this afternoon announced cabinet ministers will have extra flexibility to consider a wider range of issues, which includes large-scale ownership of farmland, when considering overseas investment applications for sensitive land.
Two new measures empowers the minister to consider whether New Zealand’s economic interests are adequately safeguarded and promote and a new “mitigating” factor will enable ministers to consider if the investment provides opportunities for domestic oversight or involvement.
This could extend to appointing New Zealand directors or establishing a head office.
The changes are expected to take effect from December and will apply only to applications from that point.
That means the application from Hong Kong-listed Natural Dairy (NZ) Holdings for the substantial Crafar portfolio of 16 dairy farms would not be affected.
The Overseas Investment Office has said it is still assessing the Natural Dairy application.
“Overall, the measures I’m announcing strike an appropriate balance, They increase ministerial flexibility to consider a wide range of issues when assessing overseas investments in sensitive land, whale at the same time they provide extra clarity and certainty for potential investors and the Overseas Investment Office,” Mr English said.
There will be no changes to the act. Mr English said changes would cause a degree of uncertainty that would outweigh potential benefits.
The government has also decided to retain the strategic asset test, which has never been used.
Mr English said removing the test would reduce ministers’ flexibility in dealing with investment applications for sensitive land.
“It’s important that we welcome beneficial foreign investment and recognise the positive contribution it makes to New Zealand through increased jobs, capital and access to export market,” he said.
“At the same time, the government recognises there are genuine public concerns about aspects of certain types of overseas investments.”
