Protecting New Zealand’s assets

Written By: - Date published: 11:10 am, March 4th, 2008 - 89 comments
Categories: assets, economy, labour, tax - Tags: , , ,

nz150The government has made a series of moves to prevent strategic New Zealand assets being exploited by foreign companies. Last week tax law was changed to prevent the Canadian Pension Fund avoiding tax in its bid for Auckland Airport. Yesterday, the government changed the Overseas Investment Act to give Ministers veto power when strategic land is up for sale. The government will also change tax law to stop oil drilling companies offsetting costs from their foreign operations against their tax in New Zealand; previously foreign companies were able to extract our oil and sell it without New Zealand getting our share in tax.

It is good to see the government taking this stance to protect our assets. Already, foreign owners take $15.4 billion (8% of our GDP) in profits from the work of New Zealanders every year, most of it dividends from former public assets that were sold off too cheaply in the 1980s and ’90s. Foreign owners also have a bad record of asset-stripping the New Zealand companies they own; extracting maximum profits while running important pieces of infrastructure (like our rail network) into the ground. We do not need more prime New Zealand assets falling into foreign hands.

Other parties have warmly received the government’s moves, except for National, which has been conspicuously silent. The public deserves to know: would Key have acted as the government did or would he have stood by while foreign companies bled this country?

89 comments on “Protecting New Zealand’s assets”

  1. higherstandard 1

    Stevo

    I have no problem with the government left right or otherwise protecting strategic assests. We could argue the point whether Auckland Airport is or isn’t one but lets just agree that it is.

    The rest of your post appears on the face of it is overly xenophobic.

    What do you suggest we nationalise all foreign owned companies. Surely you haven’t got a probelm with foreign ownership of companies if they abide by the same laws and regulations as the rest of us ?

  2. sdm 2

    So as a shareholder in a private company, the government can tell me who I can and who I cant sell MY shares to? The sooner this government is gone the better – stop telling me what I can and cant do with my property

  3. Steve Pierson 3

    sdm. should property rights be absolute? what if a person’s exercising of their property rights has negative consequences for those around them and themselves?

  4. Steve Pierson 4

    Higher. Its not xenophobia, because I’m not arguing that it’s foreigners that are problematic but rather that the ownership of important NZ assets by companies that have no direct interest in the wider good that these assets provide to NZ is often problematic and, so, they asset-strip.

    Moreover, such a high current account deficit, which is created by this high level of foreign ownership, has negative impacts on the NZ economy – we are more exposed to international shocks, our credit rating it worse than it otherwise would be.

  5. out of bed 5

    protecting Nz’s assets eh?
    lets start with stopping polluting run off from dairy farms

  6. sdm 6

    So what of the negative consequences?

  7. sdm 7

    So what ARE the negative consequences?

  8. James Kearney 8

    I hear that oob- but seeing as this usually timid lot have actually displayed some backbone here I think they deserve some props.

  9. Steve Pierson 9

    sdm. How about if the Canadian Pension Fund acted with Auckland Airport exactly like Toll has with the railways? run it down and exreact as much profit as possible, then flog off the remains, probably back to the government.

    You see, the Canadian Pension Fund does not need a functioning international airport in Auckland; New Zealand does. The Canadian interest is purely to extract as much profit as it can. If the most profitable course is to asset-strip and rely on the government to eventually squeal and buy them out, that’s what they’ll do – Canadian Pension Fund wins, we lose.

    out of bed. agreed but slightly off topic.

  10. http://mediasportandotherrantings.blogspot.com/2008/03/labour-party-screws-aia-shareholders.html

    Labour Party Screws AIA ShareHolders Again

    [full post from his blog followed]
    [Brett your contributions are welcome but we’re not going to have others placing their entire posts on our blog]

  11. Sam Dixon 11

    Brett Dale – I’m an Auckland Airport shareholder too. The price of the shares I hold has gone down but the future value of my dividends has not. And as I’m in as an investor, not a speculator out for capital gain, I’ve lost nothing. In fact, right now AIA shares are a bargain considering the dividend return. Mioht have to look at expanding my holding.

    You also have to ask yourself, why was the CPF fund willing to pay so much for these shares if that price is not justified by ordinary dividends?

  12. Steve Pierson 12

    sam. Don’t you mean the present value of your future AIA dividends hasn’t gone down?

  13. rjs131 13

    Steve, werent there any asset sales in the 1980s? Or were all asset sales approved by Clark, Cullen, Goff etc… back then acceptabe?

  14. higherstandard 14

    Sam, Steve you both make good points.

    What is the current dividend return I might grab some more shares myself.

    In relation to your question why are CPF willing to pay so much – I would have though that they yave run the numbers and think it’ll provide a good return for their shareholders – you don’t believe there’s anything beyond that simple fact do you ?

  15. insider 15

    why do you think that NZ companies are any more attuned to the needs of the economy than overseas owned ones. What about Orca, Pumpkin Patch and F&P who do most of their manufacturing offshore?

    There are plenty of crappy NZ companies willing to cut corners and costs, minimise their compliance effors to dredge as much as they can out of the economy. NZ businesspeople are not necessarily nicer or more community minded. What do you think of say (plucked at random) that wholly owned NZ business Talleys?

    Your fear of foreign ownership is nothing but xenophobia because if you were consistent you would not want NZ companies investing offshore for the same reasons you don;t like foreign investment here?

  16. I Don’t like the idea of “Protecting our assets” or “It belongs to the people”

    No it doesn’t, it belongs to THE SHAREHOLDERS, and it doesn’t seem the Labour Party can understand this.

  17. the sprout 17

    how dare the government protect public interests before off-shore private interest. perhaps the saviour John Key will stand up for the rights of multinational megaconglomerates.

  18. Phil 18

    r0b, dont be a dick. That’s not even remotely what Insider is suggesting.

  19. higherstandard 19

    Stevo

    Still don’t agree with your view but the debate is actually very interesting.

    Sam I think it’s worth noting that investing for capital gain is not a bad thing it remains to be seen whether the holdings by Manukau and Auckland Councils will realise more from their shreholding over the long term through dividends and share capital gain than they would from the Canadian Pension Fund offer. At todays share price vs the CPF offer they’re down around $400 million not accounting any dividend payable.

    Guess we’ll see ten years down the track

    captcha – French blonde (Yes please ….. ps don’t tell the wife)

  20. Tane 20

    He already has sprout. From Newsroom:

    The Government should have made its intentions clear much sooner and the move did not inspire much confidence in the capital markets, he said.

    John Key, protecting capital markets from democracy since 1961.

  21. higherstandard 21

    Sprout

    I take back back my comment regarding the debate being interesting – try remving your Red lenses for two seconds

  22. higherstandard 22

    Tane

    Perhaps you’d like to expand on what you find wrong with Key’s comment seems pretty reasonable to me.

  23. insider 23

    I raised local practices because Steve (to me) implied foreign companies were less interested in local good than local companies. I just provided some examples where that could be a debateable concept.

  24. out of bed 24

    ps don’t tell the wife?

    Another Don Brash disciple 🙂

  25. Steve Pierson 25

    rjs131. You’re quite right, I will add 1980s to the post.

    higher. I had a look on their site and they returned an average of 12.2 cents per share in the last three years, fully imputed, so that’s an after-tax return of 6% at $2.00. Not that great I guess but better than the bank. Also, the shares have already rebounded to $2.18, so someone could have made a quick buck this morning when the speculators pulled out.

  26. insider 26

    On oil company tax breaks – I doubt it is to prevent foreign owned companies exploiting the break. I suspect it is the locally owned ones operating overseas that is the issue.

    Why? Becuase there aren’t many foreign oil companies operating now and I doubt Shell is drilling in say Indonesia as “Shell Oil NZ” or similar. The multinats like to keep their affairs nice and tidily packaged as it reduces legal risks, particularly for their US based companies, as US law can be very financially destructive if proper legal boundaries aren’t maintained. eg where would you rather successfully sue someone – in NZ or the US? So companies try and prevent cases crossing boundaries.

    I wonder if this rule may be more aimed at locally domiciled companies such as Todd or NZOG who could fund overseas adventures via the NZ taxpayer.

  27. higherstandard 27

    OOB

    Why not Trevor ?

  28. Ruth 28

    There was an announcement an hour or 2 ago – they are continuing with their offer as a minority shareholder without a controlling interest.

    So could be a buy at this level.

  29. out of bed 29

    Your politics perhaps ?
    😉

  30. higherstandard 30

    Ruth could you point me in the direction of that announcement.

  31. Draco TB 31

    No it doesn’t, it belongs to THE SHAREHOLDERS, and it doesn’t seem the Labour Party can understand this.

    No it doesn’t – it belongs to the people of NZ due to it being a part of NZ and if they decide that it shouldn’t be sold to foreign owners then tough biccies to the shareholders. I should also mention that it’s a natural monopoly and shouldn’t even be in private hands.

    BTW, the NZ public did invest in AIA – it’s why there was an airport there in the first place to be sold off cheaply by some rabid free-marketeers.

    Your fear of foreign ownership is nothing but xenophobia because if you were consistent you would not want NZ companies investing offshore for the same reasons you don;t like foreign investment here?

    Don’t know about anyone else here but I think foreign ownership is bad for the economy no matter what country it’s in. The loss of capital from that economy is nothing other than a deadweight loss and comes with all the negativity that economics attribute to such a loss.

    ~$16bn in profits going overseas from NZ. Financial capital that can no longer be invested back into NZ and people wonder why our productivity isn’t increasing.

  32. r0b 32

    Insider – I think those are good points and interesting questions. I think we should all remember them next time people suggest that any form of government regulation is bad, or that all decisions should be left to pure market forces.

  33. rjs131 33

    but I think foreign ownership is bad for the economy no matter what country it’s in”

    Umm Have you been to north korea? is there any reason why you arent living in that workers paradise which is free of foreign ownership?

  34. insider 34

    Foreign ownership is also about expertise. Just how good would our computers be if not for all that foreign capital? What about our engineering, our construction? Our safety standards? Our financial reporting and transaction systems (actually we would probably do very well on that). We sometimes forget that there are gains from having outsiders involved. Call it hybrid vigour.

  35. r0b 35

    r0b, dont be a dick. That’s not even remotely what Insider is suggesting.

    Beg your pardon Phil, not sure what your problem is here? Insider seemed to be pointing out the undesirable aspects of some NZ business practices. I was agreeing with Insider that these undesirable aspects existed, and suggesting that we keep that in mind. So?

  36. James Kearney 36

    So the Canadian Pension Plan is going to bring us new super-advanced computers we couldn’t otherwise buy ourselves?

    Just like with the rail network aye? Remember those super-fast bullet trains and top of the line overseas tracks they got us?

  37. insider 37

    Given that they are not a computer company, I suspect that is doubtful. But do you think fpr Canty UNiversity it would be better and cheaper designing and building its own supercomputer (or commissioning a local one) or buying one from Cray? How well did the railways yards do in designing and building diesel locos locally?

  38. Matthew Pilott 38

    rjs131 comes out with the ultimate dumb-arse comment – if it’s so great why don’t you go there? A favourite of good jokers such as Burqa Bob since way back.

    Why don’t you pop over to Somalia if you’re such a huge opponent to Government regulation 😉

    On a serious note, I wonder how the country’s right-wing economists can (at the same time) protest against the block of foreigh ownership of our assets, and complain about our poor balance of trade and current account deficit. Nothing to see here people….

  39. Horisthebear 39

    The change in rules is stupid and desperate. It simply removes the right of Kiwis to choose to whom they wish to sell to. What next I can’t sell my house to english immigrants if they don’t vote Labour. No one is putting a gun to the heads of those selling shares.

    The result will be that the cost of funding the massive current account deficit simply rises as the risk premium for doing business in NZ has just increased. Lets say 0.25% gets added to the international risk premium for this would be normal. That means that every NZer has just had to pay more for what benefit? zero!

    If he wanted to do, then do it right. Put it out for consultation. There is already the rules for local authorities for them and strategic assets.

  40. Matthew Pilott 40

    Insider, do you think we should sell Canterbury University to Cray in the hope that they give it some supercomputers? Bit of a flawed argument there, there’s a difference between financing capital and selling ownership.

  41. HIGHERSTANDARD 41

    Thanks for the link Rob much appreciated

  42. Oh boo hoo Horis feels his freedom has been taken away. Why do you righties always see freedom expressly in terms of the free market? Why can’t you just go to that small government haven that is Somalia and leave us normal people to live in a social democracy? Please.

  43. sdm 44

    Let me be really clear. I own shares in the airport. They are mine – not yours, and certainly not the governments.

    “No it doesn’t – it belongs to the people of NZ due to it being a part of NZ and if they decide that it shouldn’t be sold to foreign owners then tough biccies to the shareholders. I should also mention that it’s a natural monopoly and shouldn’t even be in private hands.”

    Sorry what kind of planet are you on. The shares are mine because I paid for them! They are not yors. You or the government have no right, morally or politically, to tell me what I can and can not do with my property, or who I can sell them too.

  44. TomS 45

    This is an issue that the electorate will love and every last one of the talking heads from the Banks, Price Waterhouse Coopers, Goldman Sachs and Fran O’Sullivan will loath.

    Here is another sleeper issue that (though I say myself) I picked ages ago that people are mentioning more and more on the blogs: Price regulation of “Kiwi basics” like milk and cheese.

  45. Matthew Pilott 46

    “You or the government have no right, morally or politically, to tell me what I can and can not do with my property, or who I can sell them too.”

    Turns out you’re wrong about that.

    Correct me if I’m wrong, but without the State, you couldn’t do a bloody thing with your shares, given that there’d be a lack of, whatsit, civilisation mebbe?

    sdm, would you be happy to sell your shares to Ahmadinejad? Would ya be pissed when the Government said no?

    I’m sorry but reality will always impinge on your fallacious market utopia buddy, get used to it.

  46. r0b 47

    No worries HIGHERSTANDARD. But woah! – are you sure about that all caps thing?

  47. Pablo 48

    “No one is putting a gun to the heads of those selling shares. ”

    Forgive me if I’m wrong but in a takeover situation, if an acquirer gets a certain number of acceptances to buy the shares in a company (90%, say) the other shareholders are then required to sell their shares to the acquirer at the offered price. Takeover code anybody?

  48. r0b 49

    Let me be really clear. I own shares in the airport. They are mine – not yours, and certainly not the governments.

    If you owned a gun, it would be yours, not the government’s. But there would still be limits on what you could do with the gun. Hint – not allowed to shoot people.

    You or the government have no right, morally or politically, to tell me what I can and can not do with my property, or who I can sell them too.

    Turns out you’re wrong about that.

  49. Ruth 50

    This is an issue that the electorate will love and every last one of the talking heads from the Banks, Price Waterhouse Coopers, Goldman Sachs and Fran O’Sullivan will loath.

    I think it’s the other way around my good man 😉

    Most NZers couldn’t care less about investing and this sort of thing. They’d rather watch 15 men chase a ball around a field.

    Now they might get interested in that Burqua Bob or whoever!

  50. Scribe 51

    Steve P,

    You see, the Canadian Pension Fund does not need a functioning international airport in Auckland; New Zealand does. The Canadian interest is purely to extract as much profit as it can.

    I was starting to wonder if it would ever happen, but I agree with you on something. 😉

    That’s why the Dubai Aerospace deal made a heck of a lot more sense than this one. They would have had a vested interest in improving Auckland International Airport (and making money as well, no doubt).

  51. sdm 52

    Oh spare me. Comparing the Canadian bid to the Iranian regime is a long bow my friend. Particually now that their have been sanctions placed on the regime, I really dont think its a worthwhile comparasion.

    Comparing shares to shooting someone. Come on. Is that the best you can do. I am not talking about using my shares to hurt anyone – rather im talking about the government interfearing in something that it has nothing to do with. I own something. Someone else wants it. They come up with a price. I choose to accept or decline. The government shouldn’t come into it. Its between the buyer and the seller. Its a private company. If it was an SOE, owned by the state, fair enough, the government can choose what it wants to do. But we are talking about private property. I wonder if the governments decision can be challenged in court…

  52. Horisthebear 53

    Pablo – you are very much confused over the rights of a small minority (in the case of 90% level compulsory acquistion right) against the rights of the ordinary shareholder to have their rights to sell to whom they choose removed.

    NEWS ALERT but Right now Auckland Airport is more than 40% owned by foreign interests…All CPIB would be is a single shareholder focused on value creation better that than some collection of hedge funds like there is at the moment.

    Robinsod – I have no issues with Govt, I just don’t like desperate corrupt ones. This decision will just make Nationals win this year a little bigger.

  53. gobsmacked 54

    As usual, Key fumbles and mumbles when asked where he actually stands:

    “Mr Key accused Dr Cullen of political opportunism and undermining confidence in New Zealand as an investment destination.

    But Dr Cullen seized on Mr Key’s comments, saying National would allow strategic assets to fall into foreign control.

    Mr Key said National would have issues over majority foreign ownership of Auckland Airport, “but we are more relaxed about minority ownership”.

    Asked by journalists if he supported what the Government had done last night, Mr Key said: “Well, no, I think we have got to be very careful about making a change to investment law… which has been purely done for political reasons.”

    Mr Key was asked numerous times whether he supported the Government, but was equivocal in his answers.

    “We have to wait and see exactly what they are doing. What I am saying is when it comes to strategic assets in terms of majority ownership, there is a completely different test in my view to a minority ownership.”

    Mr Key said it was not clear from the Government’s statements about what limit it was placing on foreign ownership of strategic assets and he was happy with the existing rules and laws.

    “It is not immediately obvious to me the law is not working.”

    (Herald report)

    Why does he always have “issues”? Is he a magazine?

  54. higherstandard 55

    Gobsmacked

    It’s always fascinating that two people can read different things into what people are saying if the Herald has quoted him correctly it’s perfectly clear to me where he stands on this issue.

  55. r0b 56

    sdm: Comparing shares to shooting someone. Come on. Is that the best you can do. I am not talking about using my shares to hurt anyone

    The point to that analogy is that society applies limits, e.g. limits to the use of “your property”.

    And yes you are talking about using your shares to hurt people. If Auckland airport is sold off shore, and we get a worse airport and worse services out of it (e.g. railways fiasco), then other Kiwis suffer for your profit. In this case, society recognises the danger, and has decided to apply limits.

  56. gobsmacked 57

    But not clear to the reporters who had to keep asking him.

    http://www.stuff.co.nz/blogs/insidethebeltway/2008/03/04/labour-cock-a-hoop-over-airport-move

    Bill English to the rescue … and wasn’t that great footage on TV3, Key wriggling and Bill standing behind him, no doubt counting the days until the inevitable coup (in 2009).

  57. higherstandard 58

    Nice to see you like the press again – I saw the footage briefly on TV one think you may be getting a bit ahead of yourself.

  58. Tane 59

    Yeah I saw the TV1 footage as well and it was quite poor I thought – focused almost exclusively on the interests of shareholders and investors, and the based on the assumption that interference in the market is a cardinal sin. Watching TV1 you also would have had no idea that Key had fluffed his lines so badly, and so tragically, under questioning from the press today.

  59. higherstandard 60

    Got to admit I am more interested in the shareholders, investors and what’s happening with the airport as an asset than I am with John Key and whether he fluffs his lines or not

  60. the sprout 61

    i’d hate to have a PM that couldn’t be relied on to get his lines right. that’d be like having GWB for PM.
    i don’t think such a PM would be very secure in their cabinet for very long either.

  61. You or the government have no right, morally or politically, to tell me what I can and can not do with my property, or who I can sell them too.

    Well, the govt had no right to sell my stake in public infrastructure to private interests in the first place, but they fucking did it, and you guys seem to have cheered them on in the process. Forgive my lack of sympathy when you discover it’s a two-edged sword.

  62. Tane 63

    Got to admit I am more interested in the shareholders, investors and what’s happening with the airport as an asset than I am with John Key and whether he fluffs his lines or not

    Sure, but their interests shouldn’t dominate the piece. The future of AIA is a matter of importance to all New Zealanders.

    John Key’s fluffing of his lines was of interest because here’s a man who’s asking us to make him PM, and he can’t even tell us where he stands on blocking foreign control of our assets. His background, his neoliberal ideology and his big business backers all tell him he’s against democratic controls on capital markets, but then he wants to keep being Mr Happy Smiley who says whatever people want to hear. This issue has exposed the contradiction.

  63. Pascal's bookie 64

    Key didn’t fluff his lines.

    He knew what he thought, and he knew that it wouldn’t be popular, and he didn’t have any lines prepared.

  64. Tane 65

    Well put PB. Vernon Small points out that Kevin Taylor is on holiday at the moment. Having seen Key’s performance today I’m pretty sure that’s no coincidence – without his spin machine and carefully honed lines Key ties himself up in all kinds of knots.

  65. higherstandard 66

    Sorry Tane

    But I thought he was quite clear on where he stood from my recollection of the news item.

    Has a problem with majority ownership but no issue with minority ownership … that’s what I heard while making the kids dinner anyway – I may be incorrect

  66. PB – dead on. I said essentially the same thing at No Minister:

    Lies are hard to maintain – did y’all catch Key on the news, trying to reconcile his view that NZ should be up for sale to the highest bidder with his awareness that voters don’t agree? That’s a lot of months of pretence he’s got to maintain – good luck with it, John mate. Don’t think you’ve got it in ya though.

  67. Pascal's bookie 68

    Heh, over at blogblog good old burt posted a link to Bassets latest output.

    Basset reckons that Labour will try and paint Key as having a secret agenda, cause the left is good at fibbing about that.

    He then explains that the Nat’s need the wimmins votes but the dainty wee ladies would be scared of the necessary policies that we need to prevent the terror that afflicts this land, (as far as I could make out brown people are having too many babies or something. (cf any Basset column from before he got the sack for lying)).

    The “so called academics” would also object, with their numbers and stuff, (which contradict the feelings Basset got when he saw some Maori in Rotorua, which make the numbers non reliable and the academics “so called”).

    To get around this Basset reckons Key should be non specific about policies and avoid talking about the necessary solutions. Which I guess is why he made such a big deal about the threat of “secret agenda attacks”. But he probably should have put more than a couple of paragraphs between the contradiction.

    I’m glad he’s not in my paper anymore, he’s too damn stupid.

    Ooh look. boston legal.

    G’night.

  68. sdm 69

    ” And yes you are talking about using your shares to hurt people. If Auckland airport is sold off shore, and we get a worse airport and worse services out of it (e.g. railways fiasco), then other Kiwis suffer for your profit. In this case, society recognises the danger, and has decided to apply limits.”

    Well I have decided to accept the offer and see what happens. And I actually dont think we will get a worse airport – simply put they need capital. The board has recomended acceptance, and I do not believe this is about foreign control. Its a bid to become a minority shareholder, and I note the letter from the Director dated 28 Feb states that.

    And my decision is largely in spite of Cullen.

    You say the airport will be worse off and use the railways as an example. Huh? This is a private company. Put aside your pro-labour position for a second. You oppose this because its foreigners. Are you a racist or a xenophobe? Because your opposition cant be about privatision (because that is not the issue) its about foreigners.

    And the actions of Cullen are simply appaling. He intervenes today? Why didnt he come out 8 months ago? If he kills this he will have wasted peoples time and money. He has also devalued the company, which arguably has done more damage than anything else.

    Oh and btw: I voted labour in the past 3 elections. So I am not the ‘kiwiblog right’.

  69. higherstandard 70

    Have just grabbed the information below regarding the Canadian Pention Plan Investment Board taking theses comments at face value I can’t see why we should have any concern regarding their minority shareholding of AIA.

    “Today CPPIB said it was continuing with the offer, following the announcement of the new regulation.

    CPPIB representative Graeme Bevans said the board had from the outset carefully structured its proposal to take into account that the airport was a sensitive asset of national importance.

    CPPIB’s intention had always been to be a long-term minority shareholder without a controlling interest, he said.

    It had entered into a deed which restricted its ability to vote on resolutions to appoint and remove directors of the airport company.

    Independent adviser Grant Samuel had also confirmed in its report that CPPIB would not control AIAL following a successful offer, Mr Bevans said.

    In late 2007, the airport board had approached CPPIB asking it to make a full takeover offer for the airport, which CPPIB declined because of its belief that it was appropriate for it to have only a non-controlling interest.

    “We have always been clear that our desire is to hold a minority stake in the airport, not a controlling one,” he said.

  70. r0b 71

    Well I have decided to accept the offer and see what happens. And I actually dont think we will get a worse airport

    It’s nice that you don’t think so, but history suggests that you are wrong. What incentive do overseas owners have to invest and improve the airport? What incentive do they have to do anything except take the profits out of this country, asset strip the airport, and sell off the corpse? That’s pretty much what happened to the railroads, why should this be any different?

    You say the airport will be worse off and use the railways as an example. Huh? This is a private company.

    Not sure what your point is here. Once someone has ownership of an asset, it doesn’t matter who used to own it. Overseas owners of Auckland Airport could do what they liked with it. Why would it not follow the same pattern as the railways?

    Put aside your pro-labour position for a second.

    Mine isn’t a pro labour position. It’s a pro Kiwi ownership position. Winston Peters does a lot of the public running on this sort of issue, and I’m certainly not pro NZ First.

    You oppose this because its foreigners.

    I have no problem with foreigners, lovely people, married one, spent years living and travelling in various “foreign” countries. I have a problem with foreign ownership of key assets, and the repatriation overseas of billions in profits that should be spent and invested in this country.

    Are you a racist or a xenophobe?

    No. Are you?

    Because your opposition cant be about privatision (because that is not the issue) its about foreigners.

    As above, my opposition can be about who controls a key asset, what their motives are, and where the profits go.

    Oh and btw: I voted labour in the past 3 elections. So I am not the ‘kiwiblog right’.

    I never said that you were. Glad to hear that you voted Labour in the past 3. I didn’t!

  71. Dean 72

    “I have no problem with foreigners, lovely people, married one, spent years living and travelling in various “foreign’ countries. I have a problem with foreign ownership of key assets, and the repatriation overseas of billions in profits that should be spent and invested in this country.”

    Would you support a law that banned New Zealanders from owning overseas countries “key assets”?

  72. sdm 73

    “It’s nice that you don’t think so, but history suggests that you are wrong. What incentive do overseas owners have to invest and improve the airport? What incentive do they have to do anything except take the profits out of this country, asset strip the airport, and sell off the corpse? That’s pretty much what happened to the railroads, why should this be any different?”

    Well hangon – they own 40% – with 25% voting rights. How does that equate to stripping the asset. The history of the canadians is sound, so where is the problem. And lets be honest here – the private sector does a better job running business than what governments do.

    But again – how dare the government interfear at the last moment in this. Its my asset – not theirs. If you are opposed to foreign ownership – why dont you start buying shares.

  73. But again – how dare the government interfear at the last moment in this. Its my asset – not theirs.

    And again: how dare the govt sell public assets in the first place? It’s our asset – not theirs. Two-edged sword, matey.

  74. To which I could add: the standard of literacy in this country really has gone shockingly low.

  75. sdm 76

    “And again: how dare the govt sell public assets in the first place? It’s our asset – not theirs. Two-edged sword, matey.”

    Yup – they probably shouldn’t have sold it. But now that they have – sorry, get lost. If I sell you my house, once its yours its yours. Ican’t then stop you from selling it to someone else, or telling you what alterations you cant do, or what colour you can and can not paint it. Its yours now.

  76. r0b 77

    Well hangon – they own 40% – with 25% voting rights. How does that equate to stripping the asset.

    It doesn’t. Stripping assets is what happens when owners (with that business plan) get 51% voting rights.

    The history of the canadians is sound, so where is the problem.

    History is a useful indicator, but not a guarantee forever. And this isn’t about just Auckland Airport. It’s about putting into law certain new principles and considerations that affect a process (which already exists in law) governing major overseas investment. These new considerations apply to the airport (right now) and also to other major assets (in the future). In short, what’s at issue here is a principle, not just the specific example of one airport (though that obviously did drive the timing).

    And lets be honest here – the private sector does a better job running business than what governments do.

    Sometimes, and sometimes not – e.g. railways.

    But again – how dare the government interfear at the last moment in this.

    How dare they not? It’s the government’s job to protect the country. Perhaps they learned something from the ideological madness of the 80’s, when we opened our tiny economy pretty much completely to the world. Didn’t work out so well for us. Now we’re getting some common sense back into the picture. Other countries regulate foreign investment in assets like airports – why shouldn’t we? Have you actually read Cullen’s press release?

    http://www.scoop.co.nz/stories/PA0803/S00025.htm

    The new regulation will move us into line with a number of other countries, including Australia which currently restricts foreign ownership of airports. New Zealand already has foreign ownership restrictions on Telecom and Air New Zealand in addition to our generic Overseas Investment regime.

  77. r0b 78

    Yup – they probably shouldn’t have sold it. But now that they have – sorry, get lost. If I sell you my house, once its yours its yours. Ican’t then stop you from selling it to someone else, or telling you what alterations you cant do, or what colour you can and can not paint it. Its yours now.

    Exactly! Exactly want we don’t want overseas owners saying to us…

  78. sdm 79

    But its the board and the shareholders call….

  79. higherstandard 80

    Point of order rOb

    In this instance government places boundaries on what they can call not society. Not debating the rights or wrongs of that but it was a governmental call to scuttle this deal.

    As a matter of interest what level of foreign ownership do you believe will be acceptable for government in this instance and would you agree that it would be prudent that there was clarity provided as to which assets will be captured under the new legislation.

  80. Blogs like parliament have their fair share of lunancy and bombast mixed with productive debate.

    From my personal perspective I don’t really have an issue with the Canadian pension fund gaining a minority stake in the Airport on the face of it they appear to have acted well throughout their entire bidding process.

    I’d also like some direction from government as to which assets the legislation/regulation will/does apply to as it may effect who I would invest with, I doubt that I’m alone in that wish

  81. rOb

    If that’s the case one of us has turned to the dark side ?
    Must do some real work now have a good day – weather in Auckland is cak hopefully better where you are

  82. r0b 83

    And because society doesn’t want them to demonstrate the same attitude that you have demonstrated above, society places boundaries on what they can call. As it places boundaries on many things.

  83. r0b 84

    Point of order rOb

    Heh! Let’s hope blogs never get as bad as parliament!

    In this instance government places boundaries on what they can call not society. Not debating the rights or wrongs of that but it was a governmental call to scuttle this deal.

    What is the relationship between government and society? Society delegates the job of running things to its elected government, hence the actions of government are to a large extent expressions of the will of society. Plus, look around the msm this morning. Is society in general supporting or opposing this government action?

    As a matter of interest what level of foreign ownership do you believe will be acceptable for government in this instance

    I have no idea. I believe in certain economic principles, but I’m not enough of an economist to put specific figure on a specific circumstance.

    and would you agree that it would be prudent that there was clarity provided as to which assets will be captured under the new legislation.

    It’s my understanding that it isn’t new legislation, but a new regulation within existing legislation which clarifies that certain factors must be considered in the existing process of approving significant overseas investment. But certainly, in general, legislation should be as clear as possible.

  84. r0b 85

    HS, I’ve no disagreement with any of that.

  85. r0b 86

    If that’s the case one of us has turned to the dark side ?

    Perhaps!

    Must do some real work now have a good day – weather in Auckland is cak hopefully better where you are

    Likewise I’m sure. Alas, cak weather in my little corner of paradise too, but then looking at the map, it seems to be cak all over…

    http://www.metservice.co.nz/default/index.php

  86. sean14 87

    Can somebody please tell me what the definition of a strategic asset is?

  87. Draco TB 89

    http://www.nzherald.co.nz/section/466/story.cfm?c_id=466&objectid=10496385

    Businesses stumble for all sorts of reasons, but more often than not in New Zealand our best tech companies don’t fail, they simply vanish, as foreign shareholders originally brought in as “strategic investors” to open up world markets restructure them and move the intellectual property and best talent overseas to somewhere cheaper where conditions and incentives are more favourable.

    The reason why foreign ownership is bad news for any economy. Wealth is created here, sold to overseas owners who then move that wealth offshore and the country is left poorer.

    Probably doesn’t really belong in this specific thread but it kinda fits.

Links to post

Recent Comments

Recent Posts