17 Feb 2011

Provision in Aus-NZ deal not enough to allay fears

4:20 pm on 17 February 2011

Opposition parties say shares in state-owned assets will end up going offshore despite a provision in the new investment deal between New Zealand and Australia.

The two governments signed a protocol on Wednesday which allows New Zealanders and Australians to make bigger trans-Tasman investments without screening.

The screening threshold for Australians investing in New Zealand will rise from $NZ100 to $NZ477 million while the threshold for New Zealanders investing in Australia will rise from $AUS231 million to $AUS1.005 billion.

The Government has preserved its right to give preference to New Zealanders investing in state-owned enterprises.

However, the Labour Party says the same promise was made about Contact Energy, yet shares were bought up by large corporations and then sold overseas.

The Green Party says the investment deal is aimed at Australian companies wanting to buy up major chunks of New Zealand's infrastructure.

Prime Minister John Key rejects the suggestion that state-owned enterprises will be vulnerable to Australian takeover.

Mr Key told Morning Report a majority of state-owned assets will remain Government owned and small investors in New Zealand will get a big chunk of the remaining 49%.

He agrees small investors could later onsell to Australia but says people have long held that right and very often do not use it.

More Australian money expected

The chief executive of Sky City Entertainment Group says more Australian companies are likely to invest in New Zealand than the other way around.

The group operates casinos in Auckland and Darwin.

Nigel Morrison told Morning Report that Sky City is probably in the top five publicly listed companies in New Zealand, yet would be unlikely to make an investment much above the current threshold.

He says, however, there would be a lot of companies in Australia that would invest more.