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Overseas Investment Amendment not a Good Look

4 March 2008

Overseas Investment Amendment not a Good Look

The decision to amend the Overseas Investment Act regulations should have been debated in Parliament and consulted with stakeholders not made behind closed doors through order in council, according to the Wellington Regional Chamber of Commerce.

“We acknowledge that New Zealand’s foreign investment regime is relatively liberal but the decision has major implications for overseas perceptions of New Zealand’s openness to foreign investment, of how government in New Zealand operates, as well as this government’s respect for property rights and private sector transactions,” said Chamber CEO Charles Finny.

“The decision sends a signal, rightly or wrongly, that the government is anti-foreign investment.

“More importantly, coming at this late stage in Canadian Pension Plan’s offer to shareholders in Auckland International Airport, and following last week’s urgent measures to block beneficial tax breaks for that transaction, it suggests that the government is too eager to step in and block private sector transactions which aren’t seen as politically acceptable.

“Taking such action through order in council without public consultation or parliamentary debate suggests that the government has no regard for the merits of public debate, contestable ideas or alternative points of view.

“The decision will send a message to foreign investors to think twice before investing in New Zealand. It may now be harder to attract private sector partners for infrastructure projects. We are also concerned at the implications this move will have for the P4 investment negotiations which are now set to involve the US, and for the negotiation of other FTAs.

“Government could have used existing conditions under the Act to address the Canadian Pension Plan’s offer for Auckland Airport if necessary. Changing the rules half way through the process is not a good look”, Mr Finny concluded.

ENDS

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