New rules for foreign investment easier, quicker: English

A review of the overseas investment regime is intended to make the process quicker and less complex, Finance Minister Bill English said today.

The Government confirmed today it would be reviewing the Overseas Investment Act and its associated regulation.

Mr English said when New Zealand came through the current recession it would need simpler rules and quicker decisions to attract the foreign investment needed to kick start the economy and create jobs.

"The current processes are cumbersome and complex. It takes a long time to make decisions because all the applications have to be measured against 27 different criteria by a pretty legalistic standard," Mr English said.

The Government wanted to retain the opportunity to protect assets and land that it believed needed to be protected, but reduce the cost and complexity of decision making.

New Zealand had to compete with other countries for investment and the recent economic crisis meant a "lot of investment was going home".

Mr English said the Government was not being overwhelmed by applications for investment and this was likely to get worse.

New Zealand's lack of savings meant it was reliant on foreign investment until that base could be built up.

- NZPA understands that applications to invest are down 7 per cent.

The picture was mixed because as the number of applicants seeking to invest here slowed, New Zealand companies were having to seek foreign private capital because banks were less reluctant to lend.

National criticised the previous government for changing the rules and blocking the attempt by a Canadian pension board to purchase Auckland International Airport.

Mr English said he would not comment on whether individual applications might benefit from a rule change, but the Government wanted investors to be clear about what the rules were and ministers would abide by them.

"We have to re-establish the credibility of the process."

If the process was not simplified and investors were not given certainty New Zealand would miss out on investment.

Mr English said he was finding very low level applications were having to cross his desk.

He cited the case of someone investing in a rest home being put through the overseas investment regime because it bordered on a park.

"We want to be focusing on big, significant investments that are going to create jobs, not complexity for low level applications."

Mr English said the thresholds for coming under the regime - 25 per cent of a company or $100 million - would be looked at as part of the review, but the Government would still be able to screen significant investment.

The review would not mean the Government would lose its ability to block investments it considered a threat to New Zealand's economy or strategic interests.

The Government would still be able to look at applications that had an impact on cultural and heritage values, but this may be done through other processes that were currently duplicated by the investment regime.

The purchase of land by foreigners was a small part of the regime and he did not imagine significant changes in that area.

The review is to be completed and decisions made by June.

- NZPA