Higher trans-Tasman investment caps excludes sensitive land in NZ

Feb. 16 (BusinessDesk) – The increased investment thresholds for injecting money across the Tasman doesn’t cover sensitive land, with farmland and fishing quotas still requiring official oversight.

Trans-Tasman leaders John Key and Julia Gillard signed off on the investment protocol building on Closer Economic Relations, which means New Zealanders won’t face screening until they inject more than A$1 billion into Australia, as opposed to the current A$231 million. Australians will be able to invest $477 million before they’re scrutinised, instead of the present $100 million cap.

The caps will be updated annually based on changes in gross domestic product, but won’t let Australian investors dodge Overseas Investment Office approval for buying up large tracts of farmland or property on the foreshore and seabed.

“The investment protocol builds on existing goods and services agreements, and aligns CER with other modern, high-quality free trade agreements,” Finance Minister Bill English said in a statement. “Australia is both the single largest source of direct foreign investment in New Zealand and is the largest overseas destination for New Zealand investment.”

The protocol is part of a move towards a single economic market, and Gillard announced a bilateral study investigating ways to reduce the barriers to trans-Tasman flights. Further steps towards a shared market are harmonising regulations, such as patent law, she said in a Radio NZ interview today.

The protocol will exclude the sale of water rights for at least five years, with Australia accepting New Zealand’s request to adopt or maintain any measure with respect to the allocation of water rights.

Gillard arrived in New Zealand yesterday in her first visit as Premier. She told a business audience in Auckland she and Key are working to make an extended Trans-Pacific Partnership a “reality” by the Asia Pacific Economic Cooperation meeting in November. The proposed agreement aims to create a free-trade block spanning the Asia-Pacific region, and has grown from New Zealand’s P4 deal with Chile, Brunei and Singapore.

(BusinessDesk)

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