February 22, 2025 • 9 mins
The Government today has announced plans to overhaul the Overseas Investment Act.
Among the reforms announced, it will fast track overseas investment for decisions to be made within 15 days, and empower the Government to intervene if a transaction is not in the country's best interest.
The overhaul would make it easier for New Zealand businesses to get new investment from overseas, as well as pay higher wages.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks
d BE.
Speaker 2 (00:10):
The government today has announced plans to overhaul the Overseas
Investment Act. Among the reforms announced, it little fast track
overseas investments, for decisions to be made within fifteen days,
and empower the government to also intervene transactions not in
the country's best interests. Basically, it's aimed at making it
easier for New Zealand businesses to get new investment from overseas,
as well as pay employees higher wages. And Associate Minister
(00:33):
of Finance David Seymour joins me, now, good afternoon.
Speaker 3 (00:37):
Good afternoon.
Speaker 2 (00:38):
Just a quick thing from the opening sentence or a
paragraph of the press release talking about boosting high wages.
Just cynically, aren't higher wages are disincentive to overseas investments.
Speaker 3 (00:53):
They are a few looking at a zero sum game
where you think that a business can only produce so
much value and the wages are a cost. But if
you look at life and business and this is a
positive some game where you say the business getting in
more investment, better ideas, better technology can produce more valuable,
(01:14):
more innovative products that people will pay more money for
then you can actually have it both ways, so you
can pay people more and make a better return on
your investment. And that really is how you've got to think.
If we just think zero some then life gets depressing
because they're just fighting over scraps your whole life. If
you think positive, some how can we do better, then
(01:35):
all sorts of joyful opportunities open up.
Speaker 2 (01:38):
I guess it's one thing to make an announcement, and
there has been the odd commentary about the government making
announcements that don't amount to much tangible change. How quickly
and how tangible do you think the change will be?
Speaker 3 (01:49):
Well, what I've said today is that the Government has
made a decision about how we're going to change the
Overseas Investment Act. Now, yes, that law still needs to
be passed through Parliament, but government now has a policy
to do it, and the Government has a majority of
the Parliament. So obviously we have to respect that the
law's not pass intal parliament passes it. But we're very
(02:11):
clear on what we're going to do. We're going to
say that if there is no farmland involved, no fishing quota,
no residential property, then the only question is could this
investment somehow threaten New Zealand's national security. So, for example,
if someone wanted to invest in something that potentially had
(02:33):
a military use so called dual use technologies, then yeah,
we'd take a pretty hard look at that. If there
was somebody that was a business that was actually deeply
embedded in another country's government, then yeah, we're going to
take a pretty hard look at that, and it might
be a no. But if it's a question of somebody
who wants to take their money, take their no how
(02:55):
and say you know what, I want to get involved
in doing business in New Zealand, then for the most
part you're going to get a go ahead in fifteen
working days or three weeks. And I think that's where
we should be.
Speaker 2 (03:06):
Who would be making those decisions in fifteen days.
Speaker 3 (03:10):
Well, the Obviousely's Investment Office is the agency that's responsible
now and will be in the future. They have to
assess is there any risk that this might be one
we want to take a look at. So that's the presumption.
If there's nothing suspicious, nothing questionable about it at all,
then they can put it through in fifteen days. If
(03:30):
they believe that there could be some issue, even the
suspicion of it, then they have to go through the
longer assessment and if there's a national interest assessment involved,
that ultimately goes to the Minister of Finance.
Speaker 2 (03:43):
I guess the reason I asked that question because is
it something that has to be roberstamp these fifteen days
decisions or is it the public service? Because the public
service has been under fire for you know, well we
know what's been under fire, So the question would be
would we be safe to have quality decisions made quickly?
Speaker 3 (04:00):
Well put it this way, the public service under the
previous cup and dare I say it, for a long
time before then had been declining in their ability to
get stuff done efficiently. And I think that's why there's
a lot of frustration with government generally, not just who's
in now or who was in before. However, what I've
managed to do as the Minister responsible for overseas Investment,
(04:22):
I've said to these guys, look, here's the new rules.
You've got to do the consents within the statutory time frame.
Actually I said that, you know, seventy days is not
good enough. You've got to do it in half the
statutory timeframe. So you've got to do it within thirty
five days, and they have been achieving almost one hundred
and ninety six percent at the time since I said
that they've been doing stuff for thirty five days. I
(04:45):
believe they can make good decisions within fifteen.
Speaker 2 (04:47):
You've said New Zealand's policy settings on investment of the
worst in the developed world. What country are you looking
at as a point of reference where we'd like to be?
Speaker 3 (04:57):
Well, if you look at Australia in Canada, in my view,
those are the countries that are our most obvious competitors,
that are both English speaking common law countries that are
kind of New World societies, not sort of Old Europe
or Old Asia, and those guys are liberalizing their approach
to foreign investment. The United States is actually very welcoming
(05:18):
of foreign investment, even though they judge pool of capital
within their borders and probably don't need it as much
as we do. So if we end up in the
same place as Canada now, I think that's a pretty
good place to be in.
Speaker 2 (05:30):
Terms of fast tracking legislation around this. Is that an
option or are you going to have to go through
the sort of more pedestrian pace of getting this through.
Speaker 3 (05:38):
Well, you know, going away to a select committee for
six months letting in public have they say that that
is the norm, and that's what I expect we'll do
in this case. Our objective is our agreement as a
government as we're going to get together and get this
law passed by the end of this year. But the
thing about overseas investment law, it can get quite technical,
(05:58):
and so it's worth taking the time to let people,
including lawyers who deal with it every day, to say, oh, yeah,
you know, if you put it that way, it's not
quite going to work because of the thing. And I
think that whole listening process is important.
Speaker 2 (06:11):
What reassurances I guess would be in what sort of
safeguards be in place that you're not making a bad
decision quickly on the actual investments.
Speaker 3 (06:20):
I mean, yeah, so at the moment, we require all
investments to demonstrate that they have a benefit above and
beyond the simple fact that the person who owns the
thing wants the investment and the person with the money
wants to make the investment. Now, of course, if you
say that, then you have to somehow come up with
(06:40):
a way of demonstrating that there's some benefit when we
already know there's benefits. That's why all the people involved
want it to go ahead. So by removing that requirement,
we're simplifying what has to be considered. They don't have
to try and second guess whether it's a good deal
when the people making it already think it is. Instead,
they have to focus on is this going to be
a threat to New Zealand's national security or a public
(07:04):
order that involve a foreign government? Is there somebody in
the background here who might have planned other than raising
productivity and wages and making money in New Zealand. In
that case, it automatically gets kicked upstairs.
Speaker 2 (07:19):
Just one last question on the I mentioned which countries
might we want to emulate? Are there any particular legislative
models that you could plagiarize if I can put it particularly.
Speaker 3 (07:31):
Well, what we're really doing is taking our legislation to
be closer to those other countries. At the moment, New
Zealand is the only country I'm aware of anywhere in
the world which says it is quote a privilege to
invest in New Zealand. No other country thinks that. And
the reality is if we take that approach, then the
(07:52):
rest of the world will just say you know what,
there's a lot of other places with lots of opportunities.
You guys, go sort yourself out. Good luck. I don't
think that's going to work for us. So by changing
that basic presumption to investment is bad to you know,
investment is a boat of confidence in our country. It
shows that people want to work with us, saying the
purpose of the actor's investment can be good. That takes
(08:13):
us closer to those other countries. And I just know
I'm going on, but just two facts. You know, the
OECD has ranked thirty four countries for their openness to
foreign investment. Now our ranking out of thirty four is
thirty four. The amount of foreign direct investment that we
get in is number twenty six out of thirty four.
(08:35):
You know, if this was the Olympics, if this was
the Rugby World Cup, if this was just about anything sporting,
we'd be embarrassed. But that's how we're doing on being
open to people wanting to invest in our country.
Speaker 2 (08:45):
So just sorry I have said final question, but one
more in terms of when you think the legislation will
actually be in place, how quickly can we get that going?
Speaker 3 (08:53):
So we're committed to getting that done by the end
of this year. You'll see legislation drafted and introduced in
the next few months. Then it'll go off for that
six months that I mentioned, but that gets us done
by the end of the year.
Speaker 2 (09:04):
Excellent, David, thanks so much for your time. That's David Seymour,
At Party Leader and Associate Minister of Finance.
Speaker 1 (09:09):
For more from the Weekend Collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks
d BE.
Speaker 2 (00:10):
The government today has announced plans to overhaul the Overseas
Investment Act. Among the reforms announced, it little fast track
overseas investments, for decisions to be made within fifteen days,
and empower the government to also intervene transactions not in
the country's best interests. Basically, it's aimed at making it
easier for New Zealand businesses to get new investment from overseas,
as well as pay employees higher wages. And Associate Minister
(00:33):
of Finance David Seymour joins me, now, good afternoon.
Speaker 3 (00:37):
Good afternoon.
Speaker 2 (00:38):
Just a quick thing from the opening sentence or a
paragraph of the press release talking about boosting high wages.
Just cynically, aren't higher wages are disincentive to overseas investments.
Speaker 3 (00:53):
They are a few looking at a zero sum game
where you think that a business can only produce so
much value and the wages are a cost. But if
you look at life and business and this is a
positive some game where you say the business getting in
more investment, better ideas, better technology can produce more valuable,
(01:14):
more innovative products that people will pay more money for
then you can actually have it both ways, so you
can pay people more and make a better return on
your investment. And that really is how you've got to think.
If we just think zero some then life gets depressing
because they're just fighting over scraps your whole life. If
you think positive, some how can we do better, then
(01:35):
all sorts of joyful opportunities open up.
Speaker 2 (01:38):
I guess it's one thing to make an announcement, and
there has been the odd commentary about the government making
announcements that don't amount to much tangible change. How quickly
and how tangible do you think the change will be?
Speaker 3 (01:49):
Well, what I've said today is that the Government has
made a decision about how we're going to change the
Overseas Investment Act. Now, yes, that law still needs to
be passed through Parliament, but government now has a policy
to do it, and the Government has a majority of
the Parliament. So obviously we have to respect that the
law's not pass intal parliament passes it. But we're very
(02:11):
clear on what we're going to do. We're going to
say that if there is no farmland involved, no fishing quota,
no residential property, then the only question is could this
investment somehow threaten New Zealand's national security. So, for example,
if someone wanted to invest in something that potentially had
(02:33):
a military use so called dual use technologies, then yeah,
we'd take a pretty hard look at that. If there
was somebody that was a business that was actually deeply
embedded in another country's government, then yeah, we're going to
take a pretty hard look at that, and it might
be a no. But if it's a question of somebody
who wants to take their money, take their no how
(02:55):
and say you know what, I want to get involved
in doing business in New Zealand, then for the most
part you're going to get a go ahead in fifteen
working days or three weeks. And I think that's where
we should be.
Speaker 2 (03:06):
Who would be making those decisions in fifteen days.
Speaker 3 (03:10):
Well, the Obviousely's Investment Office is the agency that's responsible
now and will be in the future. They have to
assess is there any risk that this might be one
we want to take a look at. So that's the presumption.
If there's nothing suspicious, nothing questionable about it at all,
then they can put it through in fifteen days. If
(03:30):
they believe that there could be some issue, even the
suspicion of it, then they have to go through the
longer assessment and if there's a national interest assessment involved,
that ultimately goes to the Minister of Finance.
Speaker 2 (03:43):
I guess the reason I asked that question because is
it something that has to be roberstamp these fifteen days
decisions or is it the public service? Because the public
service has been under fire for you know, well we
know what's been under fire, So the question would be
would we be safe to have quality decisions made quickly?
Speaker 3 (04:00):
Well put it this way, the public service under the
previous cup and dare I say it, for a long
time before then had been declining in their ability to
get stuff done efficiently. And I think that's why there's
a lot of frustration with government generally, not just who's
in now or who was in before. However, what I've
managed to do as the Minister responsible for overseas Investment,
(04:22):
I've said to these guys, look, here's the new rules.
You've got to do the consents within the statutory time frame.
Actually I said that, you know, seventy days is not
good enough. You've got to do it in half the
statutory timeframe. So you've got to do it within thirty
five days, and they have been achieving almost one hundred
and ninety six percent at the time since I said
that they've been doing stuff for thirty five days. I
(04:45):
believe they can make good decisions within fifteen.
Speaker 2 (04:47):
You've said New Zealand's policy settings on investment of the
worst in the developed world. What country are you looking
at as a point of reference where we'd like to be?
Speaker 3 (04:57):
Well, if you look at Australia in Canada, in my view,
those are the countries that are our most obvious competitors,
that are both English speaking common law countries that are
kind of New World societies, not sort of Old Europe
or Old Asia, and those guys are liberalizing their approach
to foreign investment. The United States is actually very welcoming
(05:18):
of foreign investment, even though they judge pool of capital
within their borders and probably don't need it as much
as we do. So if we end up in the
same place as Canada now, I think that's a pretty
good place to be in.
Speaker 2 (05:30):
Terms of fast tracking legislation around this. Is that an
option or are you going to have to go through
the sort of more pedestrian pace of getting this through.
Speaker 3 (05:38):
Well, you know, going away to a select committee for
six months letting in public have they say that that
is the norm, and that's what I expect we'll do
in this case. Our objective is our agreement as a
government as we're going to get together and get this
law passed by the end of this year. But the
thing about overseas investment law, it can get quite technical,
(05:58):
and so it's worth taking the time to let people,
including lawyers who deal with it every day, to say, oh, yeah,
you know, if you put it that way, it's not
quite going to work because of the thing. And I
think that whole listening process is important.
Speaker 2 (06:11):
What reassurances I guess would be in what sort of
safeguards be in place that you're not making a bad
decision quickly on the actual investments.
Speaker 3 (06:20):
I mean, yeah, so at the moment, we require all
investments to demonstrate that they have a benefit above and
beyond the simple fact that the person who owns the
thing wants the investment and the person with the money
wants to make the investment. Now, of course, if you
say that, then you have to somehow come up with
(06:40):
a way of demonstrating that there's some benefit when we
already know there's benefits. That's why all the people involved
want it to go ahead. So by removing that requirement,
we're simplifying what has to be considered. They don't have
to try and second guess whether it's a good deal
when the people making it already think it is. Instead,
they have to focus on is this going to be
a threat to New Zealand's national security or a public
(07:04):
order that involve a foreign government? Is there somebody in
the background here who might have planned other than raising
productivity and wages and making money in New Zealand. In
that case, it automatically gets kicked upstairs.
Speaker 2 (07:19):
Just one last question on the I mentioned which countries
might we want to emulate? Are there any particular legislative
models that you could plagiarize if I can put it particularly.
Speaker 3 (07:31):
Well, what we're really doing is taking our legislation to
be closer to those other countries. At the moment, New
Zealand is the only country I'm aware of anywhere in
the world which says it is quote a privilege to
invest in New Zealand. No other country thinks that. And
the reality is if we take that approach, then the
(07:52):
rest of the world will just say you know what,
there's a lot of other places with lots of opportunities.
You guys, go sort yourself out. Good luck. I don't
think that's going to work for us. So by changing
that basic presumption to investment is bad to you know,
investment is a boat of confidence in our country. It
shows that people want to work with us, saying the
purpose of the actor's investment can be good. That takes
(08:13):
us closer to those other countries. And I just know
I'm going on, but just two facts. You know, the
OECD has ranked thirty four countries for their openness to
foreign investment. Now our ranking out of thirty four is
thirty four. The amount of foreign direct investment that we
get in is number twenty six out of thirty four.
(08:35):
You know, if this was the Olympics, if this was
the Rugby World Cup, if this was just about anything sporting,
we'd be embarrassed. But that's how we're doing on being
open to people wanting to invest in our country.
Speaker 2 (08:45):
So just sorry I have said final question, but one
more in terms of when you think the legislation will
actually be in place, how quickly can we get that going?
Speaker 3 (08:53):
So we're committed to getting that done by the end
of this year. You'll see legislation drafted and introduced in
the next few months. Then it'll go off for that
six months that I mentioned, but that gets us done
by the end of the year.
Speaker 2 (09:04):
Excellent, David, thanks so much for your time. That's David Seymour,
At Party Leader and Associate Minister of Finance.
Speaker 1 (09:09):
For more from the Weekend Collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio.
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