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.
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