New control on investment?

Press, 29 May 1981, Page 25

New control on investment?

Parliamentary reporter Some tightening of controls on Australian investment in New Zealand could result from the agreement hammered out by the two countries during the negotiations for a closer economic relationship. The Prime Minister (Mr Muldoon) said this when elaborating on the details of the agreement and reached in talks between himself and the Australian Deputy Prime Minister (Mr Anthony) earlier this month, and confirmed by Australia this week. Essentially, the two countries have agreed to work under the same guidelines when considering approval for investment, in the one country by financial institutions of the other. Since the Australian controls are generally tighter than New Zealand is and will not be relaxed to any great extent under the agreement, the New Zealand controls will be tightened to the degree necessary to bring them into line.

Both countries, however, will take the concept of closer economic relationship into account when evaluating the contributions such investment is likely to make to the individual economies. Mr Muldoon described the investment question as one of the most important issues in the talks. Agreement on it, he said, was a ‘promising sign.” Australian financial institutions have a greater involvement in New Zealand than the institutions of this country in Australia. The New Zealand Government has been concerned about the treatment given by the Australian Government to applications by New Zealand financial institutions wishing to invest in the Australian financial sector. According to Mr Muldoon, the agreement reached should ensure that the foreign investment policies of the two Governments do not impede progress towards closer economic relationships. Earlier report. Page 10