KEY POINTS:
Finance Minister Michael Cullen has accused National leader John Key of being "very slippery" on his stance toward the Government's move to protect Auckland Airport from foreign control.
Dr Cullen last night announced new foreign investment rules allowing ministers to block deals that would allow control of strategic assets and land to fall into overseas ownership.
He said it was in response to uncertainty around the Canadian Pension Plan Investment Board's (CPPIB) offer to airport shareholders.
By last night the Canadian bid had snared 11.58 per cent of the shares. It wants 40 per cent, and for its offer to succeed it must win 50 per cent of a shareholder vote.
The change in regulations was made yesterday by Order in Council, a process which means it does not have to be passed by Parliament.
"There's no doubt in my mind that the New Zealand public believes that strategic assets should not pass into overseas control," Dr Cullen said.
This morning shares in the airport tumbled 2.2 per cent, before correcting, and the market in general tumbled over 1 per cent.
Mr Key accused Dr Cullen of political opportunism and undermining confidence in New Zealand as an investment destination.
But Dr Cullen seized on Mr Key's comments, saying National would allow strategic assets to fall into foreign control.
Mr Key said National would have issues over majority foreign ownership of Auckland Airport, "but we are more relaxed about minority ownership".
Asked by journalists if he supported what the Government had done last night, Mr Key said: "Well, no, I think we have got to be very careful about making a change to investment law... which has been purely done for political reasons."
Mr Key was asked numerous times whether he supported the Government, but was equivocal in his answers.
"We have to wait and see exactly what they are doing. What I am saying is when it comes to strategic assets in terms of majority ownership, there is a completely different test in my view to a minority ownership."
Mr Key said it was not clear from the Government's statements about what limit it was placing on foreign ownership of strategic assets and he was happy with the existing rules and laws.
"It is not immediately obvious to me the law is not working."
Dr Cullen described Mr Key's position as "very slippery" as control of a company was possible without an absolute majority of shares in many cases.
Dr Cullen said Cabinet had made the decision yesterday as it needed to be made before Auckland Airport shareholders voted on the Canadian pension fund bid.
He said he was not surprised the Canadians were carrying on with their bid as it was difficult for them to withdraw the offer.
"In an ideal (world) we wouldn't had the bid in the first place," Dr Cullen said.
He did not believe foreign investors would be spooked by the Government's move as New Zealand still had one of the most liberal overseas investment regimes in the world.
National's finance spokesman, Bill English, said National believed there were sufficient rules in place to ensure the Canadian bid did not take control.
"Investors need the confidence of knowing what the rules are and knowing they won't change at the last minute. The Canadian offer has been on the table since July last year," Mr English said.
"Michael Cullen has now raised questions about just how much of a minority stake overseas investors can have in other important assets like Telecom."
- NZPA
