National interest test added to protect New Zealanders’ interests

The Coalition Government is delivering on its promise to protect New Zealanders’ interests by applying a new national interest test to the sales of our most sensitive and high-risk assets to overseas buyers.

Under current Overseas Investment Act (OIA) rules, assets such as ports and airports, telecommunications infrastructure, electricity and other critical infrastructure are not assessed through a national interest lens.

But a number of new powers will now be introduced to protect New Zealanders’ best interests in these important assets.

Responding to concerns about overseas investment in water bottling, the Government will also require consideration of the impact on water quality and sustainability of a water bottling enterprise, when assessing an investment in sensitive land.

The changes follow last year’s reform that generally banned foreign buyers from purchasing residential homes. As a result of that policy change, New Zealanders now have a fairer shot at buying a home.

There will be a “call in” power applied to the sale of our most strategically important assets, such as firms developing military technology and direct suppliers to our defence and security agencies.  This will apply to assets not currently screened under the OIA.

Enforcement powers are also being improved.  The maximum fixed penalties for not complying will rise from $300,000 to $10 million for corporates.

This move also aims to cut red tape, including setting specific timeframes to give investors greater certainty and exempting a range of low risk transactions, such as some involving companies that are majority owned and controlled by New Zealanders.

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