I think I may not have made my point clear in my response to another poster. Namely: Much of NZ business is now actually in foreign ownership. So, owning foreign shares may actually be a way to invest in those companies who own NZ businesses now.
However in relation to imputed dividends I disagree. It gives a tax-neutral flexibility for companies to either retain or distribute tax paid profit. Attaching imputation credits means that the shareholder is not then in effect double-taxed on the company profit. If the tax paid profit were kept in the company, then the only way for a shareholder (who relies on an income stream from investments) would be to sell shares thereby incurring transaction costs.
Other countries have investment schemes with discounted tax rates on dividends and/or a tax threshold before dividend income is taxed. Certainly until NZ introduces such schemes, imputation at least tries to address double taxation on the income from NZ shares.
A few years old:
https://www.interest.co.nz/business/...reholders-says