New Zealand's "Otago**" published a commentary on December 27, investment is crucial in business, enterprises need investment to expand scale, create jobs, in New Zealand, because of the size of the economy and capital market constraints, enterprises are difficult to obtain enough funds. Many local companies want to access overseas funding, but it is difficult to do so due to the Overseas Investment Act (OIA) restrictions.
Other countries are very welcoming to overseas investment, believing that it can promote business development and economic growth, Ireland is a good example, its investment policy has attracted a lot of capital, promoted economic development, hundreds of multinational companies have created a large number of jobs, and Ireland's GDP per capita is more than 15S$80,000, while New Zealand's GDP per capita is about half of that.
New Zealand is the least welcoming of OECD countries, and compared to similar legislation in other countries, the Overseas Investment Act appears to be alternative, most of the legislation is to encourage the promotion of overseas investment, and a few restrictions are also for *** reasons. Since its passage in 2005, our bill has been tightened, not only for *** reasons, but also for strict control of investment in land and natural resources.
According to the Act, it is difficult for foreigners or businesses to buy property or farms in New Zealand. At first glance, this can protect New Zealand's resources, but the problem is that an area of more than 5 hectares will be included in the "sensitive land" and subject to the jurisdiction of the Act, most manufacturing industries need more than 5 hectares of land for production, and the cost of compliance is too high to use foreign capital to buy and sell "sensitive land" under the Act.
We can understand that the purpose of the legislation is to protect New Zealand's natural resources, and we do not want to see land and natural resources controlled by foreign capital, but the bill goes beyond what is necessary.
In fact, the share of land-related foreign acquisitions is not prominent, with only 7% of the S$150 billion worth of foreign direct investment going to land-related assets. While land investment is severely restricted, other investments are also affected.
Another thing that needs to be changed is the discretion of the Minister. Under the bill, cabinet ministers can decide whether an overseas investment can take place, which is unanticipated and unfair to potential investors. The Foreign Investment Act not only restricts New Zealand companies' access to overseas capital, but also reduces the value of New Zealand's resources by preventing local companies from listening to more generous overseas capital**.
We are pleased to see that both PNP and DAP have mentioned in ** that the investment environment is being optimised, and that the new ** is committed to changing the investment policy, and we believe that the Overseas Investment Bill should be re-examined and significantly amended to establish a better overseas investment regime.
*: Economic and Commercial Section of the Embassy of the People's Republic of China in New Zealand.