Committee criticises Govt overseas investment regulations

A parliamentary committee has criticised the Government's decision to implement regulations used to block the partial sale of Auckland International Airport (AIA) to a Canadian pension fund.

Land Information Minister David Parker and Associate Finance Minister Clayton Cosgrove used their powers under the Overseas Investment Act in April to block approval for the Canada Pension Plan (CPP) 40 per cent buy-up of AIA shares.

The ministers were able to consider the sale on the basis it was a strategic asset on "sensitive land" after the Government changed regulations under the Act in March.

Auckland Airport is on coastal land, which is deemed sensitive under the Act.

Parliament's regulations review committee yesterday issued a report on several matters including complaints from the Business Round Table and Wellington City Council on the March regulation change.

They said the Government appeared to use the regulations in an unusual and unexpected way to make changes that should have been dealt with through legislation.

The committee agreed saying the changes should have been subject to parliamentary debate.

"In our view the Overseas Investment Regulations 2008 constitute an unusual and unexpected use of the regulation-making power.

"They also contain matters that can be argued to be more appropriate for parliamentary enactment."

The committee recommended the Government:

* consider whether the Overseas Investment Act should be amended to contain the changes; and

* take steps to ensure legislation does not allow regulations to be made that add extra factors or criteria to those listed in legislation, that must be taken into account in ministerial decision making.

The committee has three National MPs, three Labour MPs and one Maori Party MP.

- NZPA