Foreign investment

Stuff reports:

The OECD ranks New Zealand as among the most restrictive foreign investment regimes in the developed world – which dispels the popular view we are easy pickings for investors, says think-tank the New Zealand Initiative.

An NZI report analyses the Organisation for Economic Development’s Foreign Direct Investment regulatory restrictiveness index published in April. This shows New Zealand has the sixth most restrictive foreign investment regime of 55 developed economies.

NZI research fellow Luke Malpass said the view that New Zealand was really open for anyone to come and invest was not true.

The index measures statutory restrictions on a country’s FDI, including screening and prior approvals, key personnel and equity and operational restrictions. Most of New Zealand’s negative rating comes from its screening of investment applications, he said.

“New Zealand relies more than any other OECD country on ministries and ministers second-guessing investment intentions and possible outcomes on the most contrived criteria.”

Of the 55 countries measured, 35 didn’t have screening restrictions.

Investment in New Zealand is a good thing. It often creates jobs, and also frees up NZ capital for investment overseas. We don’t and can’t live in a silo.

Malpass said though New Zealand’s foreign investment regime restricted investment only in “sensitive land”, this category is absurdly broad. It includes any rural land of more than 5 hectares and anything larger than 0.4ha near inland water.

5 hectares is just 0.05 of a square kilometre. 0.4 hectares is a tony 0.004 of a square kilometre. Far too small.