Australian prime minister Kevin Rudd has described an agreement to ease restrictions on trans-Tasman investment as a breakthrough.
Under the deal, to be finalised later this year, Australian companies will be able to invest up to $477 million in New Zealand without seeking approval. The previous threshold was $100 million.
New Zealand firms will be able to invest up to $A953 million in Australia before they face any red tape.
Mr Rudd says the move is an important step forward in the relationship, and an obstacle has been overcome.
The relaxation of investment rules in has drawn criticism from the Council of Trade Unions, which says protections for strategic assets, including some ports, could be undermined.
Milford Asset Management fund manager Brian Gaynor says investment should be tagged to new jobs as Australia has a poor investment record in New Zealand.
"Selling existing companies to Australian companies, the experience (has been) they normally tear down the size of these companies, they lay off people and they run them quite frugally.
"We should be trying to get overseas companies to come in and set up new operations here, that create employment."
However the managing director of Brook Asset Management, Mark Brighouse, says New Zealanders' low savings means local firms rely on overseas investment and restrictions on this would cost jobs.