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.

Why then introduce a new source of risk to investing in New Zealand: the risk of panicked, poll-driven, ad hoc regulatory intervention of the kind the Government announced on Monday night?

Finance Minister Michael Cullen says many countries, including Australia, put restrictions on foreign ownership of "strategic" assets. We are not going out on "some kind of Hugo Chavez limb", he says.

But the airport has been a takeover target for the best part of a year.

Why has the Government waited until days before shareholders vote to decide that it is a strategic asset?

Cullen has not attempted to deny that public misgivings about foreign ownership of the airport drive this decision. But the Government, admittedly the previous Government, has sold its shares. If it wants the rights of ownership it can try to buy them back - though the price is likely to be high. Instead it has interposed itself between willing buyers and willing sellers of those shares.

Were it not an election year, and were it not trailing badly in the polls, it might have a broader view of the national interest.

By reducing the future value of the shares the intervention has the perverse effect, of course, of giving shareholders a greater incentive to vote to allow the bid and to sell into it.

* Disclosure: Brian Fallow owns shares in Auckland International Airport Ltd.