Office of the Minister of Finance 10 October 1996 Mr R. W. Stannard Chairman Overseas Investment Commission P.O. Box 2498 WELLINGTON Dear Mr Stannard Facilitating Australian Investment The Minister of Finance recently exchanged letters with the Hon. Peter Costello, the Australian Treasurer, relating to some investment and tax aspects of our economic relationship with Australia. A copy of those letters is attached. As you will see from the letters, both countries acknowledge the importance of bilateral investment. Moreover, both Governments are keen to encourage further growth in efficient trans-Tasman investment. Our long term aim is to see the elimination of all barriers to trans-Tasman investment. In the interim we wish to ensure that the existing relatively liberal regime in which we operate, and which sees us benefit from the inflow of investment from Australia, is able to continue. We also wish to ensure that any impediments to investment under our current regime are minimised. We would, therefore, ask the Overseas Investment Commission to assist the Treasury in an investigation of the current foreign investment regulatory regime to ascertain what amendments may facilitate investment from Australia. Section 9 (2) of the Overseas Investment Act 1973 requires the Commission to comply with the general policy of the Government transmitted in writing by the Minister of Finance and the Minister of Lands. Accordingly, we wish to convey the following general policy of the Government in relation to the functions of the Commission, insofar as they relate to investment from Australia: the Government welcomes investment from Australia. We believe that trans-Tasman investment flows are beneficial to our economy and that it is extremely important that these investment flows continue unimpeded; and the Government would like to ensure that the screening process operated by the Overseas Investment Commission remains at least as liberal as it is at present. Further to our letter to you of 21 December 1995, we would like to reaffirm that your policy approach should continue on the basis that proposals should be approved unless there is a very good reason, in terms of our legislative criteria, to decline them. Furthermore, you should continue to interpret the criteria that applications must meet in a way which facilitates rather than hinders investment. Finally, we request that the Commission examine its procedures to determine ways to facilitate the application process for Australian investors and reduce their compliance costs. Yours sincerely Right Hon. W. F. BIRCH, Minister of Finance. Right Hon. DENIS MARSHALL, Minister of Lands.