New rules for Aust, investment?

Press, 30 June 1983, Page 8

New rules for Aust, investment?

PA Wellington The Prime Minister, Mr Muldoon, said last evening he would start looking at ways to change shareholding rules for Australian finance houses in New Zealand.

Mr Muldoon said he was “most reluctant” to set new rules.

He was following up his warning that wholly owned Australian institutions might have to divest 50 per cent of their capital to New Zealand shareholders as a result of the Tasman foreign investment row. He said earlier that until he held further discussions with the Hawke Government “it will be necessary for New Zealand to move towards the application of the same rules that Australia is applying to us.” Asked if he would move immediately, Mr Muldoon said he would talk with officials and consider what regulations might be needed. He did not know if legislation would be required.

Mr Muldoon would not exclude the possibility of the Government’s taking action before he is due to meet the Australian Treasurer, Mr Paul Keating,

in Canberra in August. His personal row with Mr Keating over the foreign investment issue has grown with Mr Muldoon’s saying that the other had made a statement “as inaccurate as it is unwelcome.”

Mr Keating’s statement was that Mr Muldoon had “stunned and embarrassed” officials of both countries at talks in Canberra last week.

Mr Muldoon yesterday called Mr Keating a “new and inexperienced Minister” and compared his performance to that of the leading character in the British television comedy, “Yes, Minister.” The show portrays a Minister controlled by public servants. Mr Muldoon said Mr Keating was accepting his Treasury’s policy “without question.” In Canberra, the head of the Treasury Department, Mr John Stone, has been warned by Mr Hawke that his job is on the line if any attempt is made to undermine Labour’s economic policies, accordingt to sources on the party’s national executive. Mr Hawke is said to have defended Mr Keating yesterday amid party concern that the latter is simply reflecting Treasury views

on the economy. Executive sources say that Mr Hawke spoke to Mr Stone more than once on the need to implement Labour ? policies, warning him against any attempt to undermine or criticise those policies in the news media or elsewhere. The A.L.P. national secretary, Mr Bob McMullan, said after an executive meeting that Mr Hawke had rebutted the argument that Mr Keating was “merely a pale reflection of the Treasury and that John Stone in fact was determining the policy of the party.” In another move yesterday indirectly related to the Hawke-Stone issue, Mr Keating has had his power and prestige enhanced with the addition of taxation to his portfolio.

Mr Hawke made the announcement ending a threemonth experiment that has angered Treasury officials, and restores responsibility for taxation administration to the Treasury, which already makes the policy. It is seen as a victory for Treasury officials, particularly Mr Stone, who has been fighting to have the tax administration restored to his department.