Hon David Seymour
Associate Minister of Finance

Associate Finance Minister David Seymour has today announced the Government’s plan to reform the Overseas Investment Act and make it easier for New Zealand businesses to receive new investment, grow and pay higher wages.

“New Zealand is one of the hardest countries in the developed world for overseas people to invest in businesses, and our productivity growth is woeful. Those two facts are closely linked.

“We are introducing reforms to improve New Zealand’s overseas investment laws. The package will speed up decisions and provide more confidence to investors, while protecting our national interests.

“Overseas investment can support economic growth because when workers work with better tools and technologies, they are more productive and get paid more.

“I’ve seen the difference that overseas investment can make. I once visited two businesses in the same industry on the same afternoon. Both had skilled and passionate people with good ideas. One had overseas investment, though, and benefited in two ways. They had more money for machinery, and they had more know-how for manufacturing and marketing their product by receiving knowledge from their partners offshore.

“New Zealand’s productivity growth has closely tracked the amount of capital workers have had to work with. Our capital-to-labour ratio has seen very little growth in the last 10 years, averaging approximately 0.7 per cent annually. That’s compared to growth of around 2 percent a year in the previous 10 to 15 years. Unsurprisingly, productivity growth averaged 1.4 percent a year between 1993 and 2013, but only 0.2 percent between 2013 and 2023.

“The Government has agreed on a reform package which includes:

• better acknowledging the benefits investment can provide to New Zealand’s economy,
• for all investments aside from residential land, farmland and fishing quota, making decisions in just 15 days, unless the application could be contrary to New Zealand’s national interest,
• strengthening the Government’s ability to intervene on the rare occasion that a transaction is not in the national interest,
• giving LINZ more powers to grant consent without involving Ministers.

“High-value investments, such as significant business assets, existing forestry and non-farmland, account for around $14 billion of gross investment each year. Cabinet has agreed to remove the barriers for these investments, while retaining existing protections for residential land, farmland and fishing quota.

“Nearly every other developed country has less obstructive laws than New Zealand. They benefit from the flow of money and the ideas that come with overseas investment. If we are going to raise wages, we can’t afford to ignore the simple fact that our competitors gain money and know-how from outside their borders.”

Overseas Investment changes Cabinet Paper

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