KEY POINTS:
Politicians are not usually coy about discussing new policies. The more thorough and convincing their explanations, the more likely they are to gain acceptance. The exception, of course, is a policy that might not have been thought through or has more to do with rhetoric than reasoning. The sort of initiative, in fact, that might lead a Cabinet minister to declare airily that it is all about principle, not specifics.
That was the response this week of Finance Minister Michael Cullen when pressed on exactly what "strategically important infrastructure" would be protected by the sudden change of foreign ownership regulations. "It is up to ministers on a case-by-case basis," he said. "Once you start trying to have a list, then the argument is about the list, not about the principle." Actually, it is vital to have a list, if only so investors know the status of an asset when they put their money into it. Dr Cullen knew, however, that venturing down this path was akin to entering a minefield.
What comfort there is for him lies in the fact that many other countries have blundered into that territory. The United States Congress decided that a Dubai takeover of 22 ports straddling the eastern seaboard posed a threat to national security. It had seen no such problem when the operations were owned by a British company. Canada, for its part, demands that foreign investments must be of net benefit to it, while the Australian Government can block overseas intrusions deemed contrary to the national interest.
Britain, in contrast, and despite its geographic vulnerability, takes the line previously entrenched in this country. Most of its major airports are owned by a Spanish company; one is controlled by Wellington-based Infratil. In recognising the limits on foreign control of such assets, it avoids the sticky issue of what is strategically important infrastructure. That is a luxury the Government no longer enjoys. At some stage, it must explain the grounds on which Cabinet ministers will block foreign investment. A threat to national security, maybe? The possibility of undermining national development? Or the risk of inappropriate management, which aims to fill foreign coffers by stripping assets or ramping up charges?
On none of these scores does Auckland International Airport, the catalyst for the tightening of the rules, qualify. Aviation and airport security remains the concern of New Zealand officials. Further, the Commerce Commission monitors attempts to extract monopoly profits. If that were to fail, it would merely open the door to the development of an alternative airport, presumably at Whenuapai.
There is a more convincing benchmark. That pinpoints pieces of infrastructure related to a finite resource. If these were to be mismanaged, there would be no clear alternatives and no possibility of quickly finding replacements. On that basis it is possible to view major power dams and the country's biggest ports as strategically important. There are only so many rivers that can be dammed, just as there are only so many bits of coastline suitable for harbour development.
Dr Cullen suggests the infrastructure he has in mind comprises only a "narrow" group. The inclusion of Auckland airport means it could be narrower. But, hopefully, dams and ports are the other ingredients. Certainly, there is no need for the likes of Television New Zealand, which can, in an emergency, be easily replicated.
The other factor in this equation is xenophobia. That is the unspoken reason for the obstacles installed by many overseas jurisdictions. It should not be an issue here. Dr Cullen must list what the Government considers strategically important infrastructure. That should be the prelude to a reasoned debate. From that, it should not be difficult to reach bipartisan agreement on strategic assets, and the degree of protection they should be afforded.
