(Bloomberg) — The New Zealand government has announced it will ease investment regulations in a bid to attract more foreign capital and boost productivity growth.
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Overseas investment laws will be changed next year to overturn the assumption that putting money into New Zealand is a privilege and investors need to justify their deals to the government, Treasury Deputy Minister David Seymour said in Wellington on Saturday. He said it was planned.
“The new starting point is that investment can proceed as long as no risks to New Zealand’s interests are identified,” he said.
The Organization for Economic Co-operation and Development lists New Zealand’s foreign direct investment rules as among the most restrictive in the developed world. The government believes that by reducing barriers to foreign capital, it can improve the country’s low productivity growth and raise wages.
Workers in countries with more capital are paid more, Seymour said. “They are using better tools and technology, and as a result, they are more productive,” he said. “Other countries have more capital than we do because we have one of the most obstructive foreign investment laws in the world.”
Mr Seymour said the cabinet had agreed on the principles of the reform, including speeding up the assessment process, with the starting point being that investments could proceed as long as no risk factors were identified.
The minister will prepare a detailed proposal with the aim of passing the bill by the end of 2025.
“Attracting more foreign investment is a key part of the government’s economic strategy,” Mr Seymour said. “The decision taken by the cabinet will allow New Zealand to play again, rather than sitting on the bench.”
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