"It sends a message that the New Zealand Government is at the forefront of trying to deal with some of the excesses of globalised capital. New Zealand is trying to maintain an outward-looking approach to trade ... a liberal democracy at home, and that we want to avoid the backlash that has occurred with the election of President Trump, Brexit, and some of the rise of fringe parties in Europe."
English said the comments showed "delusions of political grandeur".
"The fact is, New Zealand is an open economy. We've been well-served over generations by foreign investment. It brings jobs, technology, management skills.
"There's always people who are disappointed in any transaction around houses or land, and we've seen times where foreign buyers have been blamed for that, including Labour's infamous Chinese names exercise. By and large people accept that foreign investment is usually good."
He said the many regional farms benefited from foreign investment, and he would watch closely if the new directive had a negative impact on the regions.
The new directive will apply from December 15, and will mean the Act's criteria will apply to all rural land larger than 5ha. Forestry relies heavily on foreign investment and will be exempt, as the Government looks to make good on its promise to plant 1 billion trees in the next 10 years.
At the same time, a new Forestry Directive will give greater importance to domestic processing.
Parker said the new directive will also tighten how the office will assess each application, placing less importance on donations and more on bringing in new technology and generating more jobs and exports.
He said too often overseas people were buying New Zealand farms, only to use New Zealand managers and farming systems without adding value to the economy.
"It doesn't markedly increase the output of the farm. It just changes who owns it."
The new directive also cuts the time limit for overseas investors claiming that they will move to New Zealand from five years to 12 months.
Parker said foreign buyers pushed up the overall price of farms, he did not expect the new directive to substantially lower prices.
"The only reason that a New Zealand seller sells to a foreign buyer rather than a New Zealand buyer is that they're willing to pay more. It's axiomatic that they have some effect on price.
"How large that is, no one really knows, but it is absolutely clear that every time an overseas buyer buys a farm, we are at one level frustrating the ambitions of a New Zealander who would otherwise buy that property."
Federated Farmers welcomed the new directive, saying it reached a good balance.
"But equally we're pleased the Government is not closing the door on overseas investment in our primary sector," Federated Farmers vice president Andrew Hoggard said.
Parker said the new directive was an interim solution that will slow down the sale of New Zealand farms to overseas buyers until the Overseas Amendment Act can be changed next year.
All applications being assessed by the OIO on and after December 15 will be subject to the directive. Applications not determined by then will be invited to make additional submissions.
Act leader David Seymour said it was unfair for the directive to apply retrospectively, and applications that were not decided by the deadline should be considered under the rules that applied when they were lodged.
Parker also confirmed that a new bill to ban foreign buyers from buying existing New Zealand homes will be introduced before Christmas. It will include higher penalties under the Act to discourage breaches of the law, such as applicants trying to side-step the OIO process.
