There would not normally be much adverse reaction to a new restriction on foreign investment in politically sensitive land. Lots of countries have them, including many considered strong.  On Auckland International Airport the damage is more in its timing and motivation –  admitting  a need to make irrational policy reversals to buy political time.

The move will not repay much analysis. The claimed worry about ‘control’ only offers some semi-rational justification for a symbolic act. This was a political response to a political problem. It may be just heading off Winston Peters. Labour know that he’ll be happy to do anything that looks nationalistic. Letting him precipitate open disagreement with them would hurt them more than  National.

 There is wiggle room in the detailed wording. Officials will have developed the delicate claw-backs. Dr Cullen will not mind people using the loopholes, as long as they do not detract from his need to be seen to be a patriot.

Whether there is any identifiable long term political cost to this (for example in an increase in interest rates) may turn on such a consequence being tied to it by authoritative international commentators. Proabably they will not pay us enough attention to bother.

If no obvious downside emerges, expect more of this kind of symbolism from an MMP coalition .

International concerns about sovereign investment will mean that we are not alone in these kinds of reactions. Other countries have reacted like this, though we need to behave more intelligently than bigger countries to earn any favours.

Living beyond our earnings for 50 years must end in a loss of control to foreigners. Inevitability will not stop it becoming one of the knottiest of issues for near future NZ governments. We may be seeing the tail-end of a period of atypical ‘economic rationalism’ as the Aussies call it.

The really interesting question is what happens as the Chinese and others who’ve been willing to finance the Anglo countries’ long party, realise that if they try to spend their savings in our money, we won’t (can’t politically) let them buy anything much we have. In effect that will make our money useless to them. They will not want to lend more on that basis. We’ll have to learn to live within our means, and pay back what we owe, or knuckle under.

‘Offers we can’t refuse’ of that kind will be more serious for us and our children than anything Scorsese depicted.