New Zealand's spies advised the government to give itself new powers to 'call in' applications by foreign investors for military and other national security assets, and privately-owned news media, Associate Finance Minister David Parker says.

Asked by journalists whether intelligence agencies recommended this part of a raft of extensions to foreign investment screening rules covering monopoly and vital infrastructure assets, Parker said: "Yes."

"The call-in power for dual-use technologies, for example, that was something the security agencies were interested in," he told a briefing on the government's latest reforms to the Overseas Investment Act, announced today and including a requirement that monopoly-type assets worth, in most cases, more than $100 million be subject to a national interest test.

The new call-in power for sales to foreign interests of "our most strategically important assets, such as firms developing military technology and direct suppliers to our defence and security agencies" will not be subject to a threshold.

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The interest of intelligence agencies in such assets should not be a surprise, said Parker who said, when asked whether the changes had also been recommended by security agencies of foreign governments: "Not that I'm aware of."

However, the US Department of Homeland Security is known to have made a sweep through New Zealand university, Crown and private high-tech research facilities in recent months with a focus on potentially sensitive projects developing products with national security risk potential, and the Overseas Investment Office will be funded to undertake such monitoring.

"We've got to be a bit careful we don't over-regulate in this space or cause too much cost to taxpayers, but we have approved funding for a monitoring regime that enables the OIO and no doubt keeping in touch with security agencies, to have a weather eye on what is being sold and what perhaps should be called in for a closer look.

"There are dual-use technologies that are produced in New Zealand that may be providing services to New Zealand's armed services or security agencies and there may be occasions when those security agencies think that those things should not be sold overseas, or if they are sold overseas, sold on conditions. At present, the regime doesn't allow that."

All countries "routinely reserve the ability to screen in the name of security" in trade agreements and "most other countries give effect to that through their screening regimes," Parker said.

New Zealand's regime was "a bit outdated" and was being brought up to a common international standard.

Asked why the 'reach-in' power also extended to private news media, Parker said it was "in the interests of an open democracy that sometimes should be able to control whether its media is controlled by overseas entities or New Zealand entities," while denying any part of the new regime was aimed at any particular country, including China.

"We are not talking about any particular country."

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