NZ – Australia Sign New Investment Protocol
Australia and New Zealand have cut red-tape surrounding business conducted between the two countries, raising the levels which can be invested without requiring approval.
On February 16th the Australian Prime Minister Julia Gillard and the New Zealand Prime Minister John Key signed a new Investment Protocol between the two countries, which updates the bilateral Closer Economic Relations (CER) trade agreement held by Australia and New Zealand. The newly signed agreement will align the CER with contemporary free trade agreements, and will cut several investment restrictions between the countries.
The protocol raises the amount that a New Zealander can invest across the Tasman before requiring a screening and approval by the Australia’s Foreign Investment Review Board (FIRB). Additionally, the signed agreement sets out that a New Zealand investor must be treated as well as a local investor when the investment is being appraised. Likewise, the same considerations and restrictions will apply to Australian investors coming to New Zealand.
Under the new protocol New Zealanders investing in Australia will be subject to a AUD 1.005 billion threshold, with investments exceeding the amount being required to seek approval from the FIRB for the venture. Australians wishing to invest in New Zealand will be subject to a NZD 477 million cap. The levels are being raised from AUD 231 million, and NZD 100 million respectively.
John key made a media statement shortly after signing of the agreement, saying that there should be no ill effects from the protocol, and New Zealand will not experience a loss of asset control to Australian investors. He added that if National wins the general elections and carries out its plan to sell off state assets, the new agreement will not results in disproportionately larger number of Australian buyers.
The new protocol will be enacted within 30 days of both countries completing the necessary legal ratification measures. While a date has not yet been forecasted, both governments expect this to occur within 2011.
Photo by tkw954