Consultation on overseas investment rules
Hon David Parker Associate Minister of Finance
Tuesday April
16, 2017 PĀNUI PĀPĀHO MEDIA
STATEMENT
Less red tape, new
national interest test focus of consultation on overseas
investment rules
To grow our economy and
lift productivity we need investment, both by New Zealanders
and overseas investors. Overseas investment is welcomed
where it supports New Zealanders’ wellbeing.
The Government has today launched public consultation on the second phase of its Overseas Investment Act reforms, which is aimed at cutting red tape and giving decision-makers the ability to consider the broader impact on New Zealand of potential investments. The consultation follows changes made in late 2018, which banned purchases of residential property by overseas persons and simplified forestry investments.
This second round of reforms is focused on reducing the Act’s complexity, to better support high-quality overseas investment, and ensuring investments are in the national interest, Associate Finance Minister David Parker said.
“To grow our economy and lift productivity we need investment – both by New Zealanders and by overseas investors. We know there is scope to simplify our overseas investment rules to ensure that New Zealand remains an attractive destination for productive investment.
“We’re looking at where we draw the line as to what constitutes a New Zealand owned or controlled company, and what information the government should request from investors to ensure they are of good character.
“The options also look at how decision makers could consider the broader effects of an investment, including whether to introduce a national interest test and whether there should be greater ability to consider national security, water, and Māori cultural values when assessing the impact of an investment.”
The Treasury has produced a consultation document outlining options for reform. The options aim to achieve a balance between supporting high-quality investment and ensuring governments have flexibility to manage any issues arising from overseas investment.
“The Government recognises that overseas investment is an important issue and we want to encourage feedback on the options,” said Minister Parker.
The Treasury will hold a series of public meetings throughout the country, including meetings with iwi and professional groups regularly involved in overseas investment.
The consultation document, related material and further information about the public meetings, as well as how to provide feedback, can be found here:https://treasury.govt.nz/overseas-investment-consultation
Background Q and As What is
the Overseas Investment Act
(OIA)?
The Overseas
Investment Act sets out the rules for overseas investment in
‘sensitive assets’ in New Zealand. If an overseas
investor wants to buy or invest in sensitive assets in New
Zealand, they may need to apply for consent. The Overseas
Investment Office (part of Land Information New Zealand) is
responsible for assessing (screening) applications and, in
some cases, Ministers make the final decision on whether
consent is given.
What are sensitive
assets?
Sensitive assets
include some land (including residential property and
non-urban land over five hectares), significant business
assets (generally those worth more than $100 million) and
fishing quota.
Why does New Zealand need foreign
investment?
Overseas investment can help grow New Zealand
businesses and increase productivity, and thereby increase
our living standards. Overseas investment can directly
benefit individual businesses, companies and communities
through things such as job creation, access to new
technology and international export markets.
Why
does New Zealand need an Overseas Investment
Act?
Overseas investment
can raise community concerns, impose direct costs and have
potential risks. For example, it could conflict with some
people’s view that land with high environmental,
productive or cultural value should be owned and controlled
by New Zealanders. It may also raise economic risks if it
involves infrastructure with monopoly characteristics. The
Overseas Investment Act recognises that it is a privilege
for overseas investor to own or control sensitive New
Zealand, and therefore requires investments in these assets
to meet certain criteria before they can proceed.
Why does the Act need
changing?
Some of the
Overseas Investment Act’s rules for screening investment
applications may be overly complex and time consuming, and
may be discouraging investment New Zealand needs. At the
same time, some of the rules do not allow the government
enough discretion to decline applications that may not be in
New Zealand’s national interest.
What are the reforms focused
on?
The
reforms are focused on achieving a balance between
supporting high-quality overseas investment by improving the
process for investors and cutting unnecessary red tape with
ensuring investments are in New Zealand’s national
interest. To do this, the Treasury have compiled a range of
options for submitters to consider. The
options explore issues related to: what is screened, who is
screened and how screening occurs and how a balance can be
achieved between productive investment and flexibility for
governments to manage any risks arising from overseas
investment.
Some of the issues explored include:
• Where to draw the line as to what constitutes a
New Zealand owned or controlled company and when it should
be considered an overseas company that requires consent to
invest in sensitive assets • What information the
government should request from investors to ensure they are
of good character • How decision makers could
consider the effects of an investment in a more holistic
way, including whether to introduce a national interest test
and whether there should be greater ability to consider
national security, water, and Māori cultural values.
The Summary Document provides information on each option detailed in the Consultation Document, and is available at the following link: https://treasury.govt.nz/overseas-investment-consultation.
How can I be
involved?
You can provide
feedback by: • attending a public meeting or hui,
and/or • completing a written submission and either
emailing it to overseasinvestment@treasury.govt.nz or
posting it to: o Overseas Investment Act Reform o The
Treasury o PO Box 3724 o Wellington 6140
What’s the deadline for
submissions?
Submissions
close at 5 pm, 24 May 2019.
What’s the
timeframe for the review?
Legislation to implement the review’s recommendations is
planned for passage by mid-2020.
Who is being
consulted?
The Treasury will hold a series of public meetings
throughout the country, including meetings with iwi and
professional groups regularly involved in overseas
investment.
Where can I find more information
about the Overseas Investment
Act?
The Overseas
Investment rules can be found in: • Overseas
Investment Act 2005 • Overseas Investment
Regulations 2005 • Sections 56 to 57J of the Fisheries Act 1996
ends