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Finance Minister Michael Cullen is defending the government's
controversial decision to change our overseas investment
rules.
The sudden government move is expected to stifle a Canadian pension
fund's bid for 40% of Auckland International Airport.
But Cullen says New Zealand has to protect its national
assets.
With around $300 million wiped off Auckland Airport's value, the argument over whether the government has made the right move is taking off.
"He's just disenfranchised tens of thousands of investors from their investment. Why if you're saving would you save in New Zealand if the Crown steals or misappropriates your assets in the middle of a bid process?" says Bruce Sheppard of the New Zealand Shareholders Association.
But Cullen says Auckland Airport is one of New Zealand's most important strategic assets and it needs protection.
"This theory that it doesn't matter who controls strategic assets was pretty heavily disproved in the 1990s. The overseas owners of Telecom and Tranzrail clearly did not have New Zealand's strategic interests at the top of their mind," he says.
National leader John Key says the government just wanted to give themselves a reason to "knockout the bid for populous reasons."
"We don't think majority control of a strategic asset should pass into foreign ownership but we're not opposed to a minority stake."
There's concern the government's move will discourage overseas investors.
"That just completely puts foreigners off even thinking about New Zealand as an investment destination and God only knows we need foreign investment," says Sheppard.
But Cullen says there are still opportunities for foreigners to invest, without hindrance.
"Anyone can take a stake up to 24.9% in assets such as Auckland Airport without Overseas Investment Commission approval," Cullen says.
Auckland Airport's investors now have until March 13 to take up the Canadian bid and then it's in the hands of the government.
