The Overseas Investment Office (OIO) is slow and understaffed, the Labour Party says.
The comment by Labour land information spokesperson Stuart Nash follows a Chinese company's withdrawal from a $42.7 million offer to buy 10 Northland farms.
The Dakang New Zealand Farm Group said it spent five months dealings with the OIO without progress.
The company - through its partial owner Shanghai Pengxin - had just been through an even longer delay over the Lochinver Station near Taupo, and Mr Nash said this was wrong.
"The OIO is dreadfully understaffed, under-resourced. It's sending very bad signals to the overseas investment committee," he said.
"The fact it took over a year for the Lochinver decision to be delivered is unacceptable. The fact that we've just had a major overseas investors say he's pulling out before a decision has been delivered, again, is unacceptable."
The government said it was concerned about delays but had not decided what to do about them.