Herald on Foreign Investment
September 28th, 2010 at 12:00 pm by David FarrarThe Herald editorial:
According to the Finance Minister, overseas investment regulations to be introduced in December will “provide extra clarity and certainty for potential investors”. More likely it will produce doubt and confusion.
The only thing more certain, is that Ministers are more likely to interfere if the political heat gets too much.
The regulations are an invitation for pressure groups to create as much fuss as possible to get the ministerial thumbs-down for what may well be desirable bids in terms of efficiency and economic benefit. Some opposition may be driven by xenophobia; others may not wish land sold to any overseas interests, whether they are Canadian or Chinese. Clearly, there will now be added uncertainty. Overseas investment policy, rather than being based on a clear set of principles that are applied without fear or favour and that recognise the limits on foreign control, will be hostage to the ministerial pen. …
Overseas investment, like immigration, has always been a key driver of the New Zealand economy. It also is far too important to be hostage to ad hoc politicking.
What people always forget, is that when you ban land owners from selling to the highest bidder, you are reducing their net wealth – and reducing the amount of money they may have to invest in other ventures.
Related posts:
- Herald on foreign investment
- Foreign investment
- Foreign Investment Changes
- Peters against foreign investment
September 28th, 2010 at 12:09 pm
Another thing people always forget is that the govt., through legislation, controls land use no matter who owns it.
Vote:September 28th, 2010 at 12:17 pm
The wet liberals at the Herald, cardboard cutout imitations of the Progressives running the New York Times, just love using words like “xenophobia”. Makes them feel so intellectually and morally superior.
In fact land sales to foreigners and overseas investment (due to the wide ranging possibilities) could be seen as two completely different issues.
Vote:September 28th, 2010 at 12:52 pm
Federated Farmers are already whinging about seeking compensation from the ‘Gummint’ if this means their ability to make karge capital gains from selling to foreigners, resulting in lower prices, is restricted.
Vote:September 28th, 2010 at 1:24 pm
DPF posts:
The assumption here is that the sellers are going to put the proceeds into new ventures. Look at Lion Nathan’s Myers. How much of his share of the money from the sale of Lion Nathan to Kirin has gone into new ventures in NZ? Probably a bit into helping boost the NZ property bubble, but what other new ventures?
Farmers tend to withdraw from dairying in steps. First they bring in a share milker then probably gradually lower their interest until they just own the land and pay for fertiliser or some such.
WHen it comes to finally sell the land, most farm owners (apart perhaps from the Crafars) will be at a stage of life when they want a well-earned retirement. In the exclusion of foreign investment interest, these selling farmers often leave capital invested in the farm, where it is a helluva lot safer than in a finance company. The rest will probably go to things like overseas holidays and a Bay of Plenty retirement home. Few will want to invest in other ventures. If a foreign company like Natural Dairy buys their land, the outgoing farmer will almost certainly not leave capital invested in the dairy industry. Likely, more of the money received will go on consumption.
NZ’s farming has always depended on independent family-owned farms. Foreign ownership by non-farmers entails company farming which has repeatedly failed in NZ or performed at a mediocre level. The public dairy companies founded by the late Howard Paterson, one of the first into the dairy-conversion boom in the South Island, never lived up their promise, at least from investors’ point of view.
Our share milking and similar arrangements with separate ownership have provided an excellent system where energetic young farmers with latest techniques have kept NZ at the forefront of the world dairy industry. At the moment this transition system is under pressure from high land prices, but that will pass, as the dairy bubble eases.
IMHO, sales to Natural Dairy and the like threaten our industry. Where skilled dairy farmers migrate to NZ and bring expertise as wellas capital, that is different. So far, these migrants come mainly from the UK, Ireland, and Holland, which are also strong dairy countries.
As for reducing property owners’ net wealth, let’s not be hypocritical. If it’s okay to sacrifice the property rights of Telecom shareholders why not thje property rights of land owners (in so far to whom they can sell overseas). I’m thinking of Labour’s Cunliffe confiscating billions of the value of their shareholder value by taking back rights sold earlier to the company? I’m talking about mandated unbundling of the copper network. It looks as though National is to give Telecom shareholders another kick with its dirigiste introduction of fibre to the home.
Vote:September 28th, 2010 at 1:47 pm
As for the NZ Herald, is it in a position to comment on overseas ownership?
You can bet the Irish owners, with the downturn of their country and O’Reilly’s problems, would like to sell off the Herald, and with the internet closing in there’s almost certainly no-one in NZ stupid enough to pay the tens of millions the Irish will want.
So perhaps the Communist Party of Beijing might be on the potential buyer list.
Vote:September 28th, 2010 at 1:51 pm
“So perhaps the Communist Party of Beijing might be on the potential buyer list.”
Present management and staff would fit right in.
Vote:September 28th, 2010 at 3:21 pm
Redbaiter points out:
Dead right. And to pretend that it’s not possible to have one without the other is simply disingenuous.
Meanwhile Granny, her bloomer sclearly in a twist, says:
Listen you supercilious prick. Those people you so sniffily dismiss are New Zealanders. They, or their forebears, may have fought to defend this country from a foreign takeover only to find it happening by stealth. They have every right to demand that it stop; it’s called democracy. If you don’t like it then perhaps, as Redbaiter points out, you’d feel more at home working for the Chinese, whose interests you’re shilling for in any case.
Vote:September 28th, 2010 at 9:39 pm
What RB and Rex said.
The law should be changed to unambiguously prevent foreign ownership of NZ soil – cos this time there ain’t no treaty to let us come back in 150 years saying it was all a big mistake. It’s a no brainer. Once the rule is in place then the speculation will stop. Realistic farmers will pay realistic prices. If an INVESTOR wants to come in the welcome mat and champagne should be laid out for them.
Vote: