In a move aimed at streamlining the process of overseas investment decisions, there are proposals to limit ministerial involvement to matters strictly related to national security only. Currently, ministers have the authority to make decisions regarding investments deemed to be in the national interest, but this responsibility is often delegated to the Overseas Investment Office (OIO). However, this system has been criticized for adding complexity and time to the decision-making process, leading to calls for reform.

The proposed changes would see ministers focusing solely on issues of national security, such as espionage, military aggression, and strategic industry protection. This shift aims to expedite the decision-making process, particularly in light of declining investment interest in New Zealand, as highlighted by Act leader David Seymour.

Seymour points out a significant drop in applications for Investor 1 and 2 visas, indicating a decline in wealthy individuals seeking residency through investment. Act's proposal seeks to alleviate the burden on ministers, allowing them to prioritize national security concerns over scrutinizing the value of investment deals.

However, not all parties are fully supportive of this change. Deputy Prime Minister Winston Peters expresses reservations, while Labour finance spokesman Grant Robertson raises concerns about protecting New Zealand's sovereignty and ensuring investments genuinely benefit the country's interests.

Critics, such as the Campaign Against Foreign Control of Aotearoa (CAFCA), emphasize the importance of ministerial oversight in decisions affecting employment, the environment, and local communities. They argue that the OIO lacks public accountability and has a lax approach to decision-making.

The proposed reform also raises questions about the definition of national security and the scope of ministerial intervention. While the coalition agreement aims to clarify national security interests, there remains uncertainty about its interpretation and implementation.

Despite differing viewpoints, there is consensus on the need to strike a balance between safeguarding national security and promoting economic growth through foreign investment. Streamlining the decision-making process while ensuring transparency and accountability will be crucial in achieving this balance. As discussions progress, it will be essential to address concerns regarding sovereignty, accountability, and the broader implications of foreign investment on New Zealand's future.

We have observed that the National Party is strongly motivated to stimulate economic growth; this is supported by, inter alia, their 2023 general election slogan ‘Get our country back on track’, their Infrastructure for the Future Plan (link) and their intention to allow more overseas investment for build-to-rent housing (link).

Disclaimer:
We have taken care to ensure that the information given is accurate, however it is intended for general guidance only and it should not be relied upon in individual cases. Professional advice should always be sought before any decision or action is taken.