Govt not monitoring overseas investors

Written By: - Date published: 1:20 pm, April 16th, 2012 - 15 comments
Categories: overseas investment, privatisation - Tags:

The Right tells us that selling all our stuff and letting the profits flow offshore is great because we get foreign capital and knowledge flowing into the economy (apparently,we can’t just buy that stuff rather than permanently lose our wealth base).

The Government says 30% ($2b) of the shares sold under the asset sales programme will go to foreigners.

But does overseas investment actually provide the benefits it claims? Turns out, we don’t know because the government doesn’t monitor the outcomes.

Foreign investors who have bought large tracts of land agreed to meet a set of conditions in order to be given consent for their purchases.

But information released by Land Information Minister Maurice Williamson shows a decline in the number of investigations into suspected breaches of those consent conditions.

One investigation was conducted last year and none in 2010.

That’s despite the number of staff employed to monitor and investigate such breaches remaining constant.

Some purchases, including several blocks of Southland farm land sold to an Irish company, have never been actively monitored.

Three blocks of land amounting to more than 190ha were sold to Premier Dairies in 2009 on condition that the company created jobs, increased the processing of primary products and provided additional investment for development purposes.

The Overseas Investment Office has received four reports from Premier Dairies, as required under the consent process to prove continuing good character, but has conducted none of its own monitoring to ensure the company complied with the requirements.

Labour MP David Parker said answers provided by Mr Williamson to written parliamentary questions revealed there had been little, or no, monitoring of conditions following 15 land sales to foreign buyers.

That included the 2009 decisions to allow 108ha of land near Matamata to be sold to GH Westbury Pty Ltd, 22ha near Ashburton to Ger Beemsterboer (NZ) Ltd, and 788ha near Otorohanga to Honikiwi Holdings Ltd.

“I think it shows that, despite the rhetoric, the Government wants to encourage overseas investment in land rather than properly control it.”

There needed to be ongoing monitoring to ensure promises were being followed through on because conditions hadn’t been met in the past, Mr Parker said.

It was also topical with the OIO currently reconsidering a $210 million offer for the 16 Crafar farms by Chinese investors Shanghai Pengxin after the High Court overruled the original decision to accept the bid.

Mr Parker said there had previously been questions about the thoroughness of OIO compliance investigations but having no checks meant people could “gild the lily” and exaggerate in order to get approval.

It undermined the process and made the conditions a pretence rather than something New Zealanders could rely upon, he said.

“We don’t think there’s very often that there is a net benefit to the country … where they are approved on conditions it makes a nonsense of the system if no-one checks whether those conditions are being met.”

So, basically, the government doesn’t have a clue whether the grand promises made by foreign investors buying our land are actually being met. But it wants to keep selling our stuff anyway. Just more proof that this government is ideological and irrational.

15 comments on “Govt not monitoring overseas investors”

  1. vto 1

    Nobody has shown how having foreign landlords is better.

    In fact, the reason we supposedly never have enough capital in this country is because most stuff has been owned by foreign landlords instead of us ffs.

    It doesn’t seem to have occurred to these fanatics that our capital base would expand if ownership was held by New Zealanders instead.

    Sometimes I think they don’t really think too much.

    • insider 1.1

      Yeah let’s have the Crafars back. Real Kiwis with a track record in running farms. Or Michael Fay. He’s one of us and he already owns a farm or two.

      • Colonial Viper 1.1.1

        Fucking Michael Fay is not a “Real Kiwi”

      • vto 1.1.2

        what’s your point insider ?

      • Draco T Bastard 1.1.3

        NZ managers suck but selling off our assets doesn’t improve them or make us better off.

        • Colonial Viper

          yeah, they and the investment bankers involved can purchase another their bach, beamer and boat by taking a slice of the proceeds of the selloff as their fees.

        • Dv

          Just small point.
          WHO lent hime thw 200m?

          Overseas banks!

          • Draco T Bastard

            Who lent whom what?

            The Chinese have something like US$1 trillion in US bonds from selling the US cheap electronics and other stuff and nowhere to spend it because the US doesn’t allow China to buy hard assets and no longer makes anything the Chinese want or need. If the Chinese currency wasn’t pegged as a fraction of the US dollar the exchange rate would be the other way around.

            EDIT: Oh, you mean Michael Fay.

            • Dv

              Nope Crafar, sorry Draco from fist inside comment

            • Matt

              Oh, the US makes stuff the Chinese want and need, alas it it only available via espionage.

              edit: and of course, if the yuan were valued properly it would tank much of China’s export-driven economy overnight.

    • aerobubble 1.2

      without fair taxation on capital gains, i.e. matching taxation on capital gains that Autralians or Brits have, the distortion created would naturally favor those who can push the exchange rate high. How do they make their money, well there exporters of bulk primary produce, they recoup the necessary costs to keep their NZ operation turning over and keep the rest overseas. The capital desert is produced because the system is rigged so that it pays owners of production to target the capital gain. i.e. if you don’t tax fairly then the private sector will take the profit, and how does the capital gains farmers do that, by borrowing to avoid tax and pocketing the untaxed capital gain.

  2. Colonial Viper 2

    The global elite are just that – a transnational global elite. The last thing they want are pesky things like ‘governments’ and ‘citizens’ complicating their latest international investment strategy designed to pump wealth from hapless niave countries like us back to themselves.

  3. Tiger Mountain 3

    Well sounds similar to “90 day fire at will” in the labour market, substantially unmonitored by the very Govt. agency that claimed it was a good thing to do on behalf of new job entrants.

    Inflow and outflow of foreign capital; hello, heard of the “foreign account deficit”? ’casue that is what it is all about and likely even the dimmest observer will note that it is mainly outflow in the form of repatriated profits to overseas owned corporates.

    • Colonial Viper 3.1

      Don’t worry about the foreign account deficit, English can always get more foreign currency in by simply borrowing it.

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