New Zealand brings in national interest test for foreign deals

Business | 19 Nov 2019 2:45 pm

A national interest test will be added to overseas investments in airports, ports, telecommunications infrastructure, electricity and other assets, New Zealand announced today.

The test would be applied to the sale of sensitive and high risk assets and will put water bottling and media companies firmly on the radar of the Overseas Investment Office, the reports.

"If those things were ever to be sold, we think the government should have the right to say they should have to be sold to a New Zealand entity rather than to a foreign entity," Associate Finance Minister David Parker said.

Some of the changes followed concerns from national security agencies, but were not designed to deter Chinese investment, he said.

The current rules only allowed the government to take into account the financial capability of the investor, not other criteria, he said. If a potential foreign investor were not corrupt and had the financial capability to manage the investment, there was no way that the government could turn down an investment.

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

A "call in" power would also apply to the sale of the most strategically important assets, such as firms developing military technology and direct suppliers to defence and security agencies, he said.

The tests would apply to large investments at a minimum of $100 million dollars.

New Zealand First spokesman for Primary Industries Mark Patterson said the move delivered a major Coalition commitment agreement.

New Zealand First called for the test because there had been an "alarming trend" of New Zealand's key strategic assets being sold overseas.

 "The sad sale" of Westland Milk Products to a Chinese company proved the need for a national interest test to counter foreign companies forking out cash to get their way, he said. It was sold to Inner Mongolian Yili, 25 percent owned by the Chinese government. 

 "We need to balance the short-term gains of the sale of assets overseas against the long-term benefits for the country and the National Interest Test will help us do so," he said.-Photo: Stuff





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