The Government has preserved its right to give preference to New Zealanders investing in state-owned enterprises in an investment deal with Australia.
Prime Minister John Key and Australian Prime Minister Julia Gillard signed the Investment Protocol to the Closer Economic Relation agreement on Wednesday.
Under the investment deal, the screening threshhold for Australians investing in New Zealand will rise from $NZ100 to $NZ477 million.
The threshhold for New Zealanders investing in Australia will rise from $AUS231 million to $AUS1.005 billion.
However, the agreement does have some safeguards. The increased thresholds only apply to significant business assets such as shares, plant and equipment. They do not apply to sensitive land or fishing quota.
Finance Minister Bill English says the Investment Protocol includes a specific provision which preserves the Government's right to offer shares in SOEs to New Zealanders first.
In her statement on the protocol, Ms Gillard said the two countries have reached an historic agreement which will deliver substantial benefits to investors on both sides of the Tasman.
Ms Gillard expects the change will mean more than half of all new Australian investment in New Zealand will be exempt from screening.
For New Zealand, the agreement will place it alongside the United States as the two countries with the most liberalised access to investment in Australia.
Co-operation between nations
The Prime Ministers have also released a joint statement on trans-Tasman co-operation.
They welcomed the signing of the investment agreement but also signalled they wanted to make more progress in other areas.
John Key and Julia Gillard have committed to establishing a joint patents examination system, to making mobile roaming charges more competitive and to speeding up co-operation on joint trade and investment initiatives in other countries.
The statement also emphasises the importance of travel across the Tasman and points to further studies to make trans-Tasman travel easier.
They reiterated their commitment to work together on a range of other issues from defence, world trade talks and the Trans-Pacific Partnership trade talks to whaling and climate change.