Coronavirus: Government makes changes to Overseas Investment Act to protect New Zealand assets

David Parker and Jacinda Ardern
David Parker and Jacinda Ardern Photo credit: Getty

The Government has promised to ensure New Zealand assets don't fall into the hands of foreign ownership in the economic aftermath of the COVID-19 pandemic.

On Wednesday Associate Minister of Finance David Parker announced the Overseas Investment Act will be amended to bring forward a national interest test, as agreed by Cabinet in November of last year.

There will also be a temporary application of the test to any foreign investments which lead to more than a 25 percent ownership interest.

"It is important to have new rules that protect Kiwi businesses from being snapped up," said Parker in a statement.

The temporary power will be reviewed every 90 days and remain in place only as long as is necessary to protect the essential interests of New Zealand while the COVID-19 pandemic and its economic aftermath continues to wreak havoc. 

Once the temporary measures are removed, a national interest test will remain for business transactions with a minimum threshold of $100 million. This could be higher if set by the terms of an international trade agreement, said Parker.

"The changes do not mean New Zealand is closing the door on foreign investment, only that the Government should have the ability to ensure that such investments are in line with our national interest," he said.

"It is a privilege to own or control our sensitive New Zealand assets - particularly now. Like other countries, we must act quickly to protect our essential interests."

 

 

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