23 Jul 2009

Govt to scrap rules over sale of assets to foreigners

6:05 pm on 23 July 2009

The Government looks set to get rid of rules preventing the sale of strategic assets to foreigners, saying it will help New Zealand recover from the recession.

The move is part of an overhaul of the Overseas Investment Act which the National Government says is deterring investment by foreigners.

In March, Finance Minister Bill English appointed an advisory group to review the regime, which he says is too complex and is impeding foreign investment.

The rules protecting strategic assets were rushed in by the previous Labour-led government to block the takeover of Auckland Airport by a Canadian pension fund.

Mr English told Checkpoint on Thursday that overseas investors will still need to go through a screening test to buy assets such as the airport, but the test will be simpler and clearer.

He says the changes are needed to reduce red tape. The new test will give foreigners more certainty and encourage them to invest in New Zealand while protecting key assets.

However, Radio New Zealand's economics correspondent says Mr English could not name a single asset that would be protected by such a test that was not already owned overseas or by the Government.

The Council of Trade Unions says this means the overhaul will lead to foreigners having open season on New Zealand land and assets.