Aust. investment chances for N.Z.

Press, 28 May 1981, Page 10

Aust. investment chances for N.Z.

PA Wellington A decision by the- Australian Federal Treasurer (Mr Howard) to permit special cnsiderations to be taken into account when New Zealand institutions want to become involved in the Australian investment market has been hailed by the Prime Minister (Mr Muldoon) as a ‘■promising sign.” The special considerations are that full account will be taken of the contributions that the proposed investment could make by way of mutual benefits under a closer economic relationship between the two countries. Mr Muldoon said that in considering proposed Australian investment on .‘‘this side of the Tasipan” New Zealand....would adopt basically the same criteria as the Australian authorities. “We wish to maximise the

net economic benefits flowing from a closer economic, relationship. The agreement that has been reached should ensure that the foreign investment policies of the two Governments do not impede progress towards this goal." Mr Muldoon said Mr Howard had confirmed acceptance of an agreement on investment reached during his recent discussions with the Australian Deputy Prime Minister (Mr Anthony). Mr Muldoon did not say what this agreement was. but official sources said it was that Australia should in consideration of applications from New Zealand financial institutions wishing to become involved in the Australian investment market, take full account of mutual benefits to the development of closer economic ties. Mr Muldoon said investment in the financial sectors of both Australia and New Zealand was an important issue which had to be resolved during the discussions on a closer economic rela-. tionship. “It is a promising sign that agreement has now been reached. Australian financial institutions have a greater involvement in the New Zealand sector than the institutions of our country have in Australia.

“During the course of our negotiations I expressed concern about the treatment given by the Australian Government to applications by New Zealand institutions' wishing to invest in the Australian financial sector.” He said the Australian authorities had advised that

their foreign investment policy was administered on a non-discriminatory basis.

"When considering applications from New Zealand, full account will be taken of the contributions that the proposed investment could make by way of mutual benefits under a closer economic relationship.”

Official sources said complaints by New Zealand finance houses that -they could not expand into the Australian market had been a significant issue between the two countries during discussions on the development of a closer economic relationship.

Now Zealand finance companies have welcomed an agreement between the NewZealand and Australian Governments which will enable them to participate in the Australian financial sector on an equal footing with Australian companies. A spokesmen for Marac Holdings, Broadlands, N.Z.I. Financial Corporation, and B.N.Z. Finance said the move was welcome, but most said it was unlikely that their present shareholdings in Australian companies would be increased soon. Until now New Zealand: companies have ben unable to hold more than 50 per cent in ■ Australian finance companies.

Although local financiers seemed well pleased w-ith the agreement as a whole, some expressed reservations on the aspect of Australian companies having "an equal footing in New Zealand," which is their interpretation of the statement.