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Overseas investment must show real gains

Written By: - Date published: 7:25 am, March 12th, 2012 - 36 comments
Categories: david shearer, farming, overseas investment - Tags:

David Shearer’s private member’s Bill on foreign investment is pure common sense: unless foreign ownership actually adds something substantial to the economy that cannot be supplied by local owners then all foreign investment brings is higher land prices, locking out Kiwis from ownership. Overseas buyers must bring something real to the table.

A good first policy. Now, it’s down to the luck of the ballot.

Oh and, by the way, if this Bill does get drawn then the vote will come down to Peter Dunne, again. That hairpiece is going to have the final say on any legislation where the Maori Party votes with the Opposition. Bet Labour’s wishing they had put more effort into winning Ohariu now.

36 comments on “Overseas investment must show real gains”

  1. Not sure if this policy is naive idealism or deliberately designed to stop most foreign purchases – if the latter it’s a major change from the Clark government policy.

    I’d like to see expert opinion on likely rammifications before judging the merits or otherwise.

    Shearer’s law would close door on most foreign buys

    “United Future’s Peter Dunne said there was no point in commenting unless the bill was drawn in the ballot.”

    Not much point in spending time on every ballot bill when most won’t be drawn.

    [is that 'expert opinion' whatever your hair-god thinks? Eddie]

    • Lanthanide 1.1

      “Not sure if this policy is naive idealism or deliberately designed to stop most foreign purchases”

      No, it’s just taking what the court has already decided in the Crafar case and putting it into law. That’s it.

      The court said that the OIO did not apply the act correctly because they didn’t show that Pengxin would create more jobs or exports than NZ buyers would. This members bill makes that specific requirement much clearer.

    • No Eddie, I’m just not inclined to jump on the populist bandwagon without giving it due consideration.

      From what has initially been said it would be a major shift in practice. Presumably Key’s National and Clark’s Labour had justifiable reasons for past practice so this move needs more substantial justification than a press release and a blog post.

      • Draco T Bastard 1.2.1

        Seems to me as if it should have always been that way. If FDI doesn’t bring anything to NZ that we didn’t already have here then it’s essentially useless and just a drain on our economy. I’m pretty sure that very little to no FDI will pass such a test as we already have the necessary resources.

      • Colonial Viper 1.2.2

        Presumably Key’s National and Clark’s Labour had justifiable reasons for past practice so this move needs more substantial justification than a press release and a blog post.

        “Presumably” they “had justifiable reasons”???

        Why would you presume that? Have you seen those reasons? If not, it seems to me that their policies have no firmer grounding that this newer one.

        And why would you presume that the necessity of economic sovereignty in an age of resource depletion wouldn’t trump previous policy anyway?

    • This sort of opinion might help the decision-making.

      Dear Labour. Please revise and re-submit Shearer’s desired Overseas Investment Act changes; Sunday’s rush job doesn’t look good

      In the rush to get this Bill written before Shearer appeared on Q&A on Sunday, you managed to indicate that you would repeal all environmental, heritage, conservation and walking access requirements on foreign landowners for Ministers when making their decisions.

      Now I know you didn’t mean to do this – you told me so this morning – but if you’re going to go on national television and announce you’re presenting a member’s Bill to change one of this country’s laws, then I for one would be hoping you’ve given it serious consideration, had a few people look over it, and had another look at the actual legislation to figure out what you’ll be repealing.

      So unless you’d like the Bill to remain as it is (and you’ve told me there are a few things you’ve got wrong), I’d expect you to withdraw the Bill in its present state and do a proper job of it. Either that or this was just a giant publicity stunt.

      Kind regards,

      Alex Tarrant

      I doubt this is Shearer’s fault, apart from him depending on people to do sufficient homework.

      • Pete George 1.3.1

        And a Green Party view.

        If Shearer had wanted to look competent on this, he could have just said Labour would be adopting Russel Norman’s Overseas Investment (Restriction on Foreign Ownership of Land) Amendment Bill. After all, Labour adopted plenty of other Green policies in the lead-up to the last election.

        But instead, he puts forward a Bill that doesn’t seem to me to do any more to clarify the law than Justice Miller’s judgment has already done, and is appallingly drafted to boot. This really looks like a stunt to try to make it look as though Labour is actually doing something on an issue they have belatedly discovered there may be some political capital in, and on which the Green have taken the lead, often opposed by Labour, over many years.

        “A good first policy.” I think it’s worth waiting to see what else comes out on this.

  2. That’s hairesy, Eddie.

  3. The Chairman 3

    Shearer said “Kiwis are overwhelmingly opposed to the sale of prime rural land, like the Crafar farms, to overseas investors. We are listening to them and are prepared to act in their best interests.”

    Yesterday he revealed a new member’s bill to limit the discretion of ministers to consent to overseas buyers.

    However, it simply takes the current legislation and applies Justice Miller’s recent interpretation over the top of it. Effectively, doing nothing new. So much for ‘listening’ to his supporters and acting in their best interest.

    Whereas, the Greens have put forward their own bill which would stop the sale of sensitive land.

    This is the second time round and Labour are still failing to listen. If Labour keep up this failure to listen and constructively act, the Greens will take what’s left of their support base.

    • Hanswurst 3.1

      I don’t quite see why you equate being proactive with one’s own ideas on what legislation should look like with “listening”.

      • The Chairman 3.1.1

        If he was genuinely listening, one would expect his new bill to reflect what the people wanted.

  4. vto 4

    Ownership of the land on which people live, work and play is fundamental to the health of society. The best owners are those who do the living, working and playing, not foreign absentee landlords.

    This is basic. Why do people not see this?

  5. vto 5

    What on earth is so bloody difficult about restricting ownership of land to those who live here?

    Toughen up and grow up.

    • Draco T Bastard 5.1

      Doing so would upset the overseas rich pricks because then they wouldn’t be able to turn us into serfs for their own aggrandizement.

  6. tsmithfield 6

    “David Shearer’s private member’s Bill on foreign investment is pure common sense: unless foreign ownership actually adds something substantial to the economy that cannot be supplied by local owners then all foreign investment brings is higher land prices, locking out Kiwis from ownership..”

    So, even under the Labour’s proposed change, then it is quite likely the Crafer sale would still go to the Chinese, since there was promises to open up the Chinese market etc in a way that a local owner would not have been able to.

    • toad 6.1

      I thought the NZ-China FTA had already opened up the Chinese market, or at least that is what it was sold to us as doing. So how, specifically, would the Pengxin purchase of the Crafar farms do more than the FTA already has, TS?

      • insider 6.1.1

        Access is not the same as opportunity. SP have (according to them) networks into retail chains that they could leverage to provide a market for NZ product, which joe farmer may not have the capacity to access on his own

        • Draco T Bastard 6.1.1.1

          If those retail chains wanted to buy NZ, as they said that they do, then they would be willing to work with NZ companies.

          • insider 6.1.1.1.1

            So NZ should only sell to those people who are well informed about us and come looking? Every salesman in the room will roll over and laugh at that one.

            Have you ever considered that not every potential buyer is so fully motivated and that someone with local influence and respect may help smooth the path to raising awareness and facilitating additional sales? SP and its farms would be a NZ company to them, just like all those other ‘NZ’ food exporters like Watties, McCains, Bernard Matthews, Cadbury, etc that provide local food products to overseas markets

            • Draco T Bastard 6.1.1.1.1.1

              So NZ should only sell to those people who are well informed about us and come looking? Every salesman in the room will roll over and laugh at that one.

              I agree, the free-market happens to be irrational.

              What you seem to have missed though is that these companies, being well informed, were already looking to buy NZ produce and thus selling out our farms to Chinese owners wasn’t going to change anything. The excuse that selling them would open up the market is just that – an excuse.

      • Draco T Bastard 6.1.2

        It wouldn’t.

  7. (A different) Nick K 7

    Alternatively a blanket restriction on land ownership (or even just agricultural land ownership) requiring owners to be resident, citizens or headquartered here would be bold and probably very popular.

    I hate to say it but this new policy from Labour is just as wishy washy as the existing rules, the fact that the summary in this article uses ‘something’ twice in the first paragraph shows that it isn’t a clear or strong stand and not significantly different to the existing rules.

    I think that Labour don’t need to rush with drafting new bills until the impact of the high court decision on the Crafar farms sale is seen. Existing OIO rules require a significant benefit to New Zealand but maybe this wasn’t be applied correctly.

    If the OIO comes back having applied the new standard set by the court under the existing rules and it still doesn’t sit right with what the majority of us then we can look at new legislation like this, but I don’t think that if this legislation was drawn out and passed into law before the Crafar farms decision is made the ultimate outcome would be much different.

  8. Blighty 8

    I love Key’s mixed up lines on this:

    a) it’s pretty confusing

    b) it’s just the existing law as defined by the judgment

    c) they don’t really mean it

  9. tsmithfield 9

    So, is it true that Labour could resort to land confiscation as part of their plan to prevent sale to foreigners?

    • toad 9.1

      If you want to gain some cred, TS, linking to Slater does NOT help.

      • tsmithfield 9.1.1

        I wasn’t so concerned about Slater. I was more concerned about what Shearer actually said, which is more of the worry.

      • insider 9.1.2

        The fact remains that in a somewhat confusing exchange, Shearer did say that would be a possible ‘penalty’.

        It was a bit confusing as to, penalty for what? The way I heard it, if the foreign investor promised x jobs say but came up with fewer, that would mean some penalty is needed, which could involve taking back the land. That said, I;m not sure that is what Shearer meant (which some would say is typical of his understanding of issues, but IMO more likely the issue with ill thought out legislation) because if somethng requires and is given OIO approval then the case for jobs has been made. If approval is required but not given, then the transaction cannot have taken place or would be illegal so unwindable.

        He surely can’t be arguing there will be some future after facts review which could result in confiscation? Could he?

        Actually, the fact it was so confusing is probably because he really doesn’t understand the implications of his own flagship policy – which is a scandal in itself.

  10. Kevin 10

    Shearer is riding the populist line with his private members bill, historically Labour have been the big sellers of Kiwi assets and land therefore Shearers bill is an about face and total contradiction of Labours past policies.
    New Zealand needs the cash, foreign cash to come in for development. With careful management we can sell land to foreign nationals with proviso’s built in, not a problem, therefore Davids bill is as Pete George said earlier, naive and idealistic.

    • Colonial Viper 10.1

      historically Labour have been the big sellers of Kiwi assets and land

      Ah yes you are referring to the First ACT Government led by David Lange. Newsflash: Labour has learnt, National still has not.

      New Zealand needs the cash, foreign cash to come in for development.

      Remind me how selling core strategic economic infrastructure helps this country’s “development”? Because it looks like it is undermining it, if anything.

      NZ has plenty of cash, the govt could increase its tax revenues easily by reversing the income tax cuts they’ve introduced since 2008.

    • Draco T Bastard 10.2

      New Zealand needs the cash, foreign cash to come in for development.

      Nope. Money is, quite literally, nothing. If we want to develop then we must needs do so from the resources that we have. Interestingly enough, as the last three decades have proven, this cannot be done through free-market capitalism.

    • vto 10.3

      Kevin says “New Zealand needs the cash,”

      Ha ha, the greatest swallowed myth of them all – that New Zealand is strapped for capital.

      Ha.

      Has it ever occured to Kevin-types that the reason we may be strapped for capital is because we let foreigners own everything in the first place? Perhaps if we owned everything in these lands ourselves then we would have such capital? Or is that sort of mental exercise too great?

  11. prism 11

    Great cartoon. Simple and effective. (The steaming ordure is useful hot and fresh, for warming the feet of those without gumboots, and cold and dry, can be an aerial weapon in a disagreement or useful for fuel.) – Some backblocks hints for city softies. My next study notes will be on Taranaki gates.

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