Score one for protectionism, and minus several ranks of the economic freedom index for New Zealand, after the Government intervenes to prevent a Canadian fund from buying into Auckland airport.
When the market drops by 2% after a new protectionist law is created it should be obvious to everyone the impact of ham-fisted interventionist Government policy.
This law means that the Government has reserved the right to change investment rules on a whim, and so the risk of investing in New Zealand has just risen substantially. Foreign investors will apply a higher risk rating to NZ, and so will demand higher returns for their investments. That means less foreign money coming in, and ultimately, lower growth.
Is this what the govenrment is promoting? Lower growth?
There are plenty of ways to protect “strategic assets”. Changing the investment laws is amongst the worst of them.