The Overseas Investment Amendment Bill

• advantage
• 6 years ago
• Categories: capitalism, Economy, Globalisation, International, overseas investment

I’m beginning to change my mind about the current foreign ownership bill now before Select Committee.

Sir Eion Edgar, who is one of New Zealand’s greatest philanthropists, told the Finance and Expenditure Select Committee that the foreign buyer ban would “be detrimental to New Zealand’s international reputation and greatly restrict overseas parties contributing to the benefit of New Zealand.”

What do you think of these case studies that Sir Eion Edgar cited?

1. Public access to iconic South Island high-country stations. Example: Robert “Mutt” Lange buying and forming a single estate larger than many of our National Parks, and spending $50 million to restore them, while also allowing controlled public access such as the Motatapu event. 90% of that land is now in QEII Trust.
2. Leisure facilities. Example: Millbrook Resort Arrowtown is owned by Eiichi Ishii and is one of the finest in the world. That’s highly managed land, low impact tourism, several hundred million of capital to do it.
3. Leisure facilities. Glenorchy Campground. Now run by Paul and Debbi Brainerd, they are turning a low-end and run-down facility into an eco-friendly place to cater for all types of visitors. They intend to gift the whole thing once it is cashflow positive.

Opponents may well say we could simply do without all of those things. Or that they might have occurred a different way if they were only able to be bought by locals.

CAFCA’s initial view was that this is all baby steps but the government really needs to get its arse-kicking boots on. Or as they succinctly put it: “Our advice to the Government on how to approach this subject is simple and succinct – less arse kissing and more arse kicking.”

Parliament has already extended the submission period for this bill, so from here it’s the Committee’s job to write the Select Committee report and then get the new bill through to its second reading.

Just in case you wanted to contact them outside the submission process, members of the Finance and Expenditure Committee are:

• Michael Wood, Chair (Labour)
• Fletcher Tabuteau, Deputy Chair (New Zealand First)
• Kiritapu Allan (Labour)
• Andrew Bayly (National)
• David Carter (National)
• Tamati Coffey (Labour)
• Steven Joyce (National)
• Barbara Kuriger (National)
• Willow-Jean Prime (Labour)
• Deborah Russell (Labour)
• David Seymour (Act)
• Duncan Webb (Labour)
• Lawrence Yule (National)

What gives me pause is looking around New Zealand and checking: what would not be here if these and similar measures had been in place for a few decades.

Would there be massive milk-processing business in Gore and Pokeno and Canterbury? I suspect Fonterra would have retained even greater dominance.

Would there still have been a housing price boom? Pretty hard to prove either way since there were no accurate figures kept for so long.

Would Avatar and the entire New Zealand film industry have been sustained on the strength of Sir Peter Jackson’s businesses alone? It’s a bold call to say yes to that.

Is this a largely symbolic move that really only affects the elite of the elite? Maybe there’s an element of truth to that, but also a suspicion that our service and tourism industry has grown so fast and built so many careers and employs so many of us because of the services that these people and their investments need.

The big alternative to foreign capital is that the locals try to get some together. And that continues. Tens of thousands of locals have turned to private debt, serviced through foreign banks, to leverage a little more local wealth in the form of multiple mortgages. All we have out of that is a whole bunch of sovereign risk and a housing crisis.

So there is no comfortable position, and even the counterfactuals remain heavily proscribed. Even the National Government stopped some foreign sales, such as Lochinver Station by Minister Paula Bennett. So there is some cross-party sympathy.

I’m reasonably patriotic. We should own as much as we can – it’s good for us and generally good for the country. But we haven’t done right by this land. Sometimes foreigners can see that and actually do a better job than us. It’s a paradox we just don’t have enough local capital to really liberate New Zealand.

As Minister Twyford has noted, it’s hard to see this bill going through its remaining stages unchanged.