(Bloomberg) -- New Zealand’s government said it will loosen investment rules in a bid to attract more foreign capital and boost productivity growth.
The Overseas Investment Act will be amended next year to reverse the presumption that putting money into New Zealand is a privilege and that investors must justify their transaction to the government, Associate Finance Minister David Seymour said Saturday in Wellington.
“The new starting point is that investment can proceed unless there is an identified risk to New Zealand’s interests,” he said.
The Organization for Economic Cooperation and Development ranks New Zealand’s foreign direct investment rules as among the most restrictive in the developed world. The government believes that reducing barriers to foreign capital can improve the country’s poor productivity growth and lift wages.
Workers in countries with more capital get paid more, Seymour said. “They work with better tools and technologies and, as a result, they are more productive,” he said. “Other countries have more capital than us because we have one of the most obstructive overseas investment laws in the world.”
The Cabinet has agreed to the reform’s principles, which include fast-tracking the assessment process with the starting assumption that investment can proceed unless there are risk factors identified, Seymour said.
The minister will develop detailed proposals with the aim of passing legislation before the end of 2025.
“Attracting more overseas investment is a vital part of the government’s economic strategy,” Seymour said. “The decisions Cabinet has taken will ensure that New Zealand is a player once again, instead of sitting on the bench.”
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