Fran O'Sullivan looks at the implications of the OIC rule change for the 50,000 voters who have just had their intersts trampled on by the Labour-led Government - supported by NZ First, United, and the Greens.
Helen Clark's Government has wiped hundreds of millions of dollars off Auckland Airport's value in a vainglorious move to exert "local control" over an asset that passed into majority private ownership more than a decade ago.
Her Cabinet's decision to insert a new clause in the overseas investment rules reserving control over unspecified "strategic infrastructure assets" to local owners while the Canada Pension Plan Investment Board's partial takeover bid is in play is a blatant abrogation of the shareholders' private property rights.
The upshot is that New Zealand's hard-won reputation as a "fair dealer" that welcomes foreign investment has now been carelessly hammered by a Government which is bent on milking the Auckland International Airport takeover for political advantage.
What Helen Clark and Finance Minister Michael Cullen forget as they blatantly ramp up the foreign investment bogey during election year is that the 50,000 retail shareholders in Auckland Airport also have votes.
Many of those mum and dad investors will already have taken a pasting on the value of their Telecom holdings after the Government wiped the company's effective broadband monopoly.
She concludes
But changing the overseas investment rules to make it difficult for the Canadian bid to succeed when the takeover offer has just 10 days left to run, not only shows blatant disregard for Auckland Airport shareholders' property rights but tells the world "you are not welcome here".
Auckland Airport has been "in play" since the beginning of 2007.
This has been plenty of time for the Government to have taken soundings on whether the foreign investment rules should be amended to create a new class of strategic infrastructure assets that should be kept under "local control", and legislated changes to the Overseas Investment Act.
The Government has not even provided an explanation as to why the airports and ports are now considered to fit into the "strategic asset" camp. Instead the Government has erected two roadblocks in the path of the Canadian fund's partial takeover bid on the dubious basis that the public are against the takeover.
That might be so from the point of view of the ratepayers for Auckland and Manukau cities. But the councils hold just 23 per cent of the airport. The major stake is owned by private shareholders who will make their own decision on the merits of the offer.
Successive Governments have boasted New Zealand has a level playing field which provides a fair environment where overseas investors are treated on the same level as domestic investors.
For a major debtor nation like ours, that was a reputation worth preserving. This doesn't mean the rules couldn't have been amended. But this should have been done by posting an explicit list of the strategic assets that the Government wants to "protect" from foreign investors and stipulating explicit foreign ownership thresholds.
