Stumbling block for Aust, firms

Press, 1 May 1984, Page 3

Stumbling block for Aust, firms

By

STUART MCMILLAN

The interest being shown by Australian firms in coming to New Zealand can only come to nothing in the meantime. The Overseas Investment Commission has had 160 applications made to it since June 27 last year but has approved none at its own discretion. The Prime Minister and Minister of Finance, Sir Robert Muldoon, has personally approved 35. The significance of June 27 is that it was on that day that Sir Robert instructed the Overseas Investment Commission that all Australian applications to take over New Zealand businesses or to set up business in New Zealand were to be declined.

This was because Sir Robert was seeking to have investment policies in New Zealand and Australia harmonised. He wanted Australia to accept the National Bank of New Zealand, wanted the 90-day waiting period imposed by the Foreign Investment Review Board in Australia on applications by New Zealand firms to take over Australian firms abolished, and

wanted adjustments to the proportion of New Zealand, shareholding allowed.

There have been a number of recent reports about Australian firms showing interest in setting up business in New Zealand and fears have been expressed in Australia about the loss of jobs this would mean to Australia. Australian firms have been making inquiries in Christchurch and there has been some concern shown about the delays involved because of Ministerial direction.

The lower costs, lower value of the New Zealand dollar, and New Zealand’s lower inflation rate have been cited as the main economic advantages of setting up business here. It is also believed that New Zealand has a more stable labour force. Some Christchurch firms are already manufacturing for the Australian and New Zealand market. The Australian firms showing interest in New Zealand are largely interested in manufacturing for the New Zealand and Australian market. Rationalisation of industry was expected to be one of the effects of the lowering of tariffs and the removal of import licensing under the Closer Economic Relations agreement.

Editorial, page 16