Treasury papers reveal the government considered a significant relaxation of the rules for foreigners looking to buy rural land.
A mid-year Treasury report reviewing the Overseas Investment Act said restricting foreign ownership of strategic assets would be "economically harmful".
It also recommended a doubling of the financial threshold for screening business purchases from $100 to $200 million.
Finance Minister Bill English said he did not take the advice, which also promoted doubling the size threshold for land up for sale.
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In September, the government decided to leave overseas investment rules largely unchanged but did introduce additional flexibility for decisions around large scale sales of farmland.
