In today's NZ Herald Brian Fallow looks at the wisdom of tightening the OIC rules for an economy that has in effect outsourced savings - we need foreign investment to maintain our standard of living.
The Government is running risks with New Zealand's reputation as an investment destination by suddenly turning Overseas Investment Office approval, long a rubber stamp, into a serious hurdle for the Canadian bid for Auckland Airport.
It has changed the rules in the closing minutes of the game.
And it does this reckless thing at the worst possible time.
The country has for 20 years enthusiastically taken advantage of the opportunities globalisation provides to access foreign capital.
Had we not, had we relied on what we ourselves are prepared to save and invest, the economy would be a lot smaller than it is.
We have in effect outsourced saving. Foreign claims on the economy, both debt and equity, are more than a quarter of a trillion dollars. But our ability to tap foreigners' savings on tolerable terms depends on being, and being seen to be, an open, stable and low-risk investment destination.
It is dangerous for a country up to its nostrils in debt to the rest of the world to tamper with that perception.
And this is the worst possible time to do it. Fear stalks the world's markets. Investors are hyper-sensitive to risk and putting a high price on it.
This is very strong language from the measured Mr Fallow. Does the Government care about being seen to be reckless and putting our reputation at risk? Does it worry that this move could leave our interest rate differential with the rest of the world higher than it would otherwise be??
No, all they care about is winning the election.
