Better protection for New Zealand assets during COVID-19 crisis
Key New Zealand assets will be better protected from being sold to overseas owners in a way contrary to the national interest, with the passage of the Overseas Investment (Urgent Measures) Bill.
The Bill, which passed its third reading in Parliament today, also cuts unnecessary red tape to help attract the sorts of foreign investment we need for our economic recovery.
Associate Minister of Finance David Parker said the law change was needed to prevent important New Zealand assets being sold without government scrutiny.
“This could result in risks to New Zealand's national security, or an offshore transfer of knowledge and jobs. While we welcome investment, and remain open for business, we also need to protect our long-term national interests.”
The new measures include a new emergency notification regime which will require overseas persons to notify the government of certain investments with a controlling stake in an existing business or business assets, even if it is below the ordinary screening threshold of $100 million (or higher if a free-trade agreement applies).
The Government will assess these transactions and, if necessary, consider whether they are contrary to New Zealand's national interest. If they are, it may impose conditions on, or – when no other option is available – block the transaction.
David Parker said he was pleased that the Bill had prompted submissions from the public, law firms and business while it was considered by Parliament’s Finance and Expenditure Committee.
“The tight timeframes have not prevented us from producing a Bill which will achieve its purpose of ensuring the risks posed by foreign investment can be managed effectively, while reducing the regulatory burden of the current screening process, so we can continue to attract sustainable investment in our country.”
The Committee has amended the Bill so that 45 days after the emergency regime has been in force, the Government will consider the operation of the emergency power and if necessary, options to improve its efficiency and effectiveness.
“Productive foreign investment has and will continue to be important to our economic wellbeing,” David Parker said.
The reforms bring forward changes agreed by Cabinet last November as part of the Phase Two review of the Act.
The second of two Overseas Amendment Bills, No 3, has been referred to select committee.
It contains the remainder of the provisions from the phase two reform of the Overseas Investment Act. Those provisions and the amendments made through the urgent Bill now passed, will be subject to further parliamentary scrutiny through select committee.