A Treasury discussion document outlining issues it wants addressed in a review of the Overseas Investment Act seeks feedback on what assets should be screened during consideration of sale to a foreign buyer, who should be screened and how that screening process can be improved.
Options suggested include an extension to the authority ministers must consider investment applications.
The document suggests a minister could approve an application if it is in the national interest or extend their power to block transactions less than $100 million if there are risks to NZ’s national security and-or public order.
Associate Finance Minister David Parker says investment is crucial to grow the NZ economy but reform must be a balance between supporting high-quality investment and ensuring governments have flexibility to manage any issues arising from overseas investment.
Treasury says consideration of what land should be screened will focus on investment in sensitive land adjoining land with sensitive characteristics such as foreshore, lakebeds and some conservation land.
Consent is required because management of land sold to a foreign buyer might impact on adjoining sensitive land.
It will also look at whether sensitive adjoining land should apply only to land next to foreshore, lake beds and land significant to Maori.
The review will also address the criteria for foreign investment in short-term leases of sensitive land, whether that should increase from three years to more than 10 with rules tailored according to the type of land being leased.
The document states defining overseas investors is straightforward but it becomes complicated when an investor is a business or entity with multiple owners including NZ residents or entities.
Some companies are technically an overseas person yet face significant costs when applying for consent to invest in NZ.
Treasury is also seeking feedback on the percentage of overseas ownership or control that tips it from being a NZ-owned company to an overseas company.
It is also considering whether the right information is being gathered about investors including information required as part of investor tests, which ensure they behave in a way consistent with NZ laws and norms.
Similarly, the document asks whether the good character component should more explicitly focus on the applicant’s history of paying tax.
It will also look at the criteria that assess the benefits to NZ of an investment, saying some is unclear and overly complex and ignores issues such as threats to national security and issues critical to the economy such as the ongoing supply of services such as electricity.
