By Jenesa Jeram*
There is nothing like a Kiwi summer to make you proud to be a New Zealander - from our pristine beaches, to our acres of green pastures, to the great sense of community that naturally forms in holiday parks and campgrounds across the country.
There is something special about this land and its people that many of us feel is worth preserving.
Perhaps piggybacking off this peak-patriotism period, the Labour Party and New Zealand First have once again attempted to fuel public outrage about foreign investment.
Making the link between foreign investment and patriotism isn’t hard. After all, there are many who believe it is part of our social fabric to be able to buy land in our own country.
They worry that rich foreign buyers will always be able to outbid them, and their kids, for that first house. And following on from this, that while New Zealanders value our land more than foreigners do, New Zealanders simply cannot compete with foreign buyers.
Now, the economic case for foreign investment has been well established by The New Zealand Initiative, along with other reputable commentators domestically and internationally. Foreign investment enhances our global competitiveness by bringing foreign capital, technologies, management expertise, and access to overseas markets.
This case needs to be repeated, and often, for fear of being drowned out by overly emotional or xenophobic arguments to the contrary.
Yet there are some who will consistently resist these economic arguments, no matter how well-evidenced and compelling. They retort that New Zealanders have never been all about profits and numbers, that there are some things in life we cannot put a price on.
It is true, life isn’t all about graphs, balance-sheets and confusing economic jargon. So let’s leave these important considerations aside for the moment –and they are important – and focus on what this boils down to: what kind of New Zealand do we want for ourselves, our kids, and our grand kids?
Restricting foreign ownership involves telling people what they can and can’t do with their private property. It involves the public deciding what private sellers do with their own land, resulting in sellers being forced to accept a lower bid for their land than they otherwise would have.
This strikes at the very heart of property rights. Property rights are the basic and exclusive rights of individuals to the possession, control, sale and enjoyment of the things they own. The corollary of this, of course, is the right not to sell.
Just because we enjoy and value something, is it really right to force others to provide it, especially when we have contributed nothing ourselves? After all, it would be absurd to expect a neighbour to upkeep a perfectly manicured garden, simply because you enjoy looking at it, but are not willing to pay them for the pleasure.
Land ownership may be part of our social fabric, but so is the protection and enforcement of private property rights. To adopt such a nonchalant attitude towards property rights is to trample on the key foundation of New Zealand’s liberal democracy.
For those worried that New Zealanders simply cannot compete with foreign buyers, the answer is not to ban foreign investment. What we need is to lift our economic game, and ensure we are competitive on a global scale. If we are being outbid by foreign buyers, this is a symptom of much greater economic challenges ahead.
Globalisation of the labour force and international trade means we cannot afford to be inward looking. Rather than simply throwing our hands up in defeat and banning foreign ownership, we need to be looking at how we can increase economic growth to ensure we are internationally competitive. To put it simply, policies on foreign ownership shouldn’t be centred around “we want this, and therefore we must ban everyone who gets in our way”, it should be around “we want this, we need to be looking at how we can afford to do it”.
Without sustained economic growth, we won’t just have to worry about future generations priced out of their own land. Economic growth can provide greater educational resources and opportunities. It can ensure New Zealanders have competitive skills in the international job market. Economic growth makes those holiday trips, both around the country and overseas possible, as well as the quintessential Kiwi experience of going on an OE. Economic growth even enhances our preparedness for disasters, both natural and manmade.
It is easy to say that New Zealanders stand for more than just cheap money and big profits. That not everything can – or should – be viewed through an economic lens.
But it’s much harder to argue that New Zealanders don’t care about private property rights, living in a liberal democracy, or that we don’t think much of all the benefits economic growth brings.
---------------------------
*Jenesa Jeram is a researcher at The New Zealand Initiative, a public policy think tank based in Wellington. The NZ Initiative provides a weekly column for interest.co.nz. This is the second one for 2015.
99 Comments
On the day that self-serving fallacies were taken to new heights, we truly looked on in wonder.
For someone talking so much about evidence, there's a conspicuous lack.
Not going to waste a lot of time on this, because toast to butter before it gets cold, but what's with this conflation of foreign ownership, and foreign investment in productive activities? Hmm??
What a disgusting article.
"the economic case for foreign investment has been well established by The New Zealand Initiative, along with other reputable commentators domestically and internationally"
The purchase of existing residential property by foreign investors is not investment! It produces no jobs and no net benefit to New Zealand.
"What we need is to lift our economic game, and ensure we are competitive on a global scale"
What a meaningless throw away statement. How do 4 million people of relatively low incomes by international standards expect to compete with hundreds of millions of already wealthy people. Increase every New Zealand income by 20% and guess what, we are less competitive!
"If we are being outbid by foreign buyers, this is a symptom of much greater economic challenges ahead"
What rubbish!
"resulting in sellers being forced to accept a lower bid for their land than they otherwise would have"
And there is the admission that foreign investors do indeed push up prices.
Not sure what you're saying: NZ competes with lower income nations (for ex, China, Thailand, Vietnam) and higher income nations (for ex, Australia, Canada). Jenesa is saying that we need strategies to compete depending on the industry so we can be better than the Dutch in dairy for example (can NZ bulld UHT brands to compete with Dutch Lady?). I don't believe she is saying that we need to distort the market by increasing salaries by legislation or company strategy. It doesn't make sense.
"If we are being outbid by foreign buyers, this is a symptom of much greater economic challenges ahead"
Why is this "rubbish"? If NZ cannot generate the wealth, why can't foreigners outbid NZers? Are you saying NZ should have unfettered access to other markets while preventing access to our markets and assets? If , for example, China is blocked from investing capital into NZ, is this beneficial to NZ in terms of a trading relationship?
Firstly, you assume that the foreign 'wealth' New Zealanders must compete with has been created through productive enterprise. What if the 'wealth' has been created via a massive credit fuelled property bubble? China for example has replicated the size of the US banking system in credit since the GFC!
Can a New Zealand citizen buy a property in China? No.
Does Australia who are a major Chinese trading partner ban the sale of existing property to Chinese (and non-citizens from all other nations). Yes.
"Purchase of existing residential property by foreign investors is not investment. It produces no jobs and no net benefit to New Zealand."
What jobs and what net benefit to New Zealand are produced when a New Zealander buys existing residential property from another New Zealander? Apart from the two parties directly concerned, why should anybody else expect to benefit from the transaction?
Don't see why it's wrong to question the premise that New Zealanders should only be allowed to sell property to foreigners if the transaction will result in benefits to other people. That standard does not apply to New Zealanders proposing to sell property to other New Zealanders, so why should it apply to New Zealanders proposing to sell property to foreigners?
How exactly is the wealth of New Zealanders diminished if New Zealander Grant sells his house to American Irving? Grant is wealthier - he now has money, which is worth more to him than his house was. Which other New Zealanders now have less wealth than they had before the Grant-Irving deal took place?
This is what I find disturbing; a right-wing conservative 'free market' think-tank quoting it's own 'research' and the work of other ideologically identical think-tanks as its evidence base.
"They worry that rich foreign buyers will always be able to outbid them, and their kids, for that first house. And following on from this, that while New Zealanders value our land more than foreigners do, New Zealanders simply cannot compete with foreign buyers"
Here I was thinking this is already happening in Auckland!?
"For those worried that New Zealanders simply cannot compete with foreign buyers, the answer is not to ban foreign investment. What we need is to lift our economic game, and ensure we are competitive on a global scale. If we are being outbid by foreign buyers, this is a symptom of much greater economic challenges ahead."
I think I get it:
So we lift our 'economic game' by selling our land and businesses to foreigners. By letting foreigners purchase our land and control production (and shift the profits offshore), this will somehow make us 'more competitive' internationally.
Obviously this leads to more 'economic growth' for NZ. Eventually this 'growth' will let New Zealanders earn enough money to eventually compete with foreigners in purchasing land in NZ (perhaps kiwis might eventually be able to buy back land that was once theirs - unlikely!). It's ingenius.
I liked the part where they claimed to be 'reputable', assuming we'd be dopey enough to just take their word for it.
This steaming pile would be great source material for a class on critical thinking, propaganda tricks, and spotting logical fallacies, but it's a bit too rambling and incoherent to inflict on anyone. But then, the rambling incoherence is probably by design, make sure most people skim and drift off with only a rudimentary idea of what's actually in there.
"... lift our economic game...." mmmmh. Seems to me that the successful enterprises are those that control their environment. The cartels who make the most money in NZ do just that.
Seems to me that is we are to '...lift our economic game...." it is useful, indeed essential to retain control. A good way to do that is to ensure our land can only be owned by citizens.
Evidence of note is the 100 years of success that the farming sector had in New Zealand and the huge social and financial contribution that it has made for us. It was the result of the land reforms of the 1890s, which essentially took land ownership out of the hands of foreign capital and put it into the hands of families. Remember your history.
The time will come that we will return to that.
"If we are to "lift our economic game" ... it is useful, indeed essential to retain control. A good way to do that is to ensure our land can only be owned by citizens".
Who exactly is "we" here?
What control do "we" need to retain over the use that private interests make of private property, and how does that "control" help to deliver economic growth?
What control exactly do "we" have over land that is owned by citizens, that "we" do not have over land that is owned by foreigners? Which laws apply in the first case but not in the second?
Simple MdM.
We = Citizens. Controls. The land reforms were laws that changed the ownership structure. They delivered economic and social benefits for a century. And largely still do, although as this debate reveals, that system and beneficial outcome is coming under threat. Ownership determines who get the benefits.
What control do "Citizens" have over land owned by New Zealanders that they do not have over land owned by foreigners?
Yes, ownership determines who gets the benefits. Why should anybody else expect to get the benefits of an individual's ownership of property?
What benefits do you as a New Zealand Citizen get from Peter Jackson's ownership of a large chunk of the Wairarapa, that you do not get from James Cameron's ownership of another large chunk of the Wairarapa?
Why should you expect to get any benefit from either?
The control by the 1890s land reform removed the English capitalists from NZ agricuture and gave the benefit of ownership to NZ families. With huge benefit to us.
Xenophobic according to you. Trampled on property rights to others.
A marvellous thing. We will go there again.
Yes, because conditions in the 1890s were so precisely analogous to conditions now that measures which delivered benefits then are bound to have the same effect now.
You've still not dealt with my original point, which was to take issue with your statement "it is essential to retain control. A good way to do that is to ensure that the land can only be owned by citizens"
Regardless of what might have been the case in the 1890s, the case now is that exactly the same legal controls on the use of land apply, whether a piece of land is owned by a New Zealand resident, a non-resident New Zealander, a non-resident foreigner or a resident foreigner. The apparent assumption that foreigners are more likely than kiwis to ignore those legal controls has no basis in evidence, nether has the assumption that foreigners (unlike kiwis) are such incompetent investors that they are bound to destroy the value of their own property by failing to ensure that the land is well maintained.
The argument that restricting foreign home ownership is xenophobic is also a load of codswallop. It in no way restricts home ownership to the myriad ethnic groups resident in NZ. Indeed, it will almost certainly help them considerably to acquire a home of thier own.
Of course it's codswallop, but very effective codswallop if the intention is to silence any dissent. Oldest propaganda manipulation in the book. Next step, now that 'xenophobia' has been swept aside as a dishonest misrepresentation, will be the 'tinfoil hat' gambit. anyone fancy a sweepstake on how long it'll take?
Sorry, but that just doesn't follow. You are saying that if there were a proposal to restrict home ownership by different ethnic groups resident in NZ, that would be xenophobic, but since that is not the proposal, therefore the proposal that is being put forward is not xenophobic.
But a proposal to restrict home ownership by NZ residents of different ethnicity would not be xenophobic. It would be racist. And the fact that a proposal isn't racist doesn't mean it isn't xenophobic.
It's not about excluding foreigners, it's about making sure they are bringing something to our country - such as these "expertise" outlined in the article. Why should they not be residents and live here, actually invest in New Zealand? Why should they just be able to use cheap and dirty money to profit (tax free) off of New Zealand property?
Your answer, because $.
Do you think the same criteria should apply to New Zealand residents proposing to buy houses - that they should not be allowed to do so unless they also make a positive contribution to the broader New Zealand economy, over and above paying the seller the agreed price for the house?
What other voluntary transactions do you think should be made subject to a similar requirement that there should be positive externalities - actual benefits to people who are not directly involved in the transaction?
And if your equation of foreign buyers with cheap and dirty money is not xenophobic - then I'd like to know what is.
Nobody's forcing you to sell your house to an overseas buyer. If you're prepared to accept a low offer from a fellow-Kiwi rather than a high offer from a foreigner, then you are free to do so. More fool you, but it's your choice.
It's not about excluding foreigners, it's about making sure they are bringing something to our country - such as these "expertise" outlined in the article. Why should they not be residents and live here, actually invest in New Zealand? Why should they just be able to use cheap and dirty money to profit (tax free) off of New Zealand property?
Your answer, because $.
It is not just "property rights". Land is a special case that is separate from all other forms of property, as land can and must be passed on to succeeding generations at some point. So land ownership is more along a guardianship or kaitiakitanga line. The question is whether or not we want kiwis to be tenants to foreign landlords in our own country. Many already are! There is no evidence that I am aware of that foreign farm owners are doing any more than a kiwi farmer would or could do, hence the Federated Farmers call to ensure that foreign buyers of farms are actually fulfilling their promises.
Other commentators have already mentioned that any buyer does not want to make a capital loss on their property so therefore land sold to a foreign buyer is already in many respects unaffordable for Kiwis unless something happens to drive the price down, other than breaking the property up! The short term investment of inflated prices has longterm, unacceptable costs.
however "property rights" do appl;y to all proprety, it's just that land is the most obvious.
the difficulty with foreign vs local farm ownership is that locals have an interest in their homes and lifestyles...but are limited in their income due to the nature of ownership.
NZ community and government have to make a decision, preferrably before it is made for them.
Do they want a corporate state? Or do they want private ownership and lifestyle choices? The two interests are mutally exclusive.
For our avid readers, try going to the NZ Initiative and reading "About Us"
http://nzinitiative.org.nz/About+Us.html
Analyse how many of their lofty ideals have been broken in Jenesa's opinion piece.
Of course the NZ initiative wants to maintain the status quo and maintain open season on NZ property - right wing mouthpieces exist to make sure the favoured few get their just desserts:
'With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.'
http://www.theguardian.com/public-leaders-network/2015/jan/23/nervous-s…
The NZ public are being played for fools......
Yeah right, like it or not property rights are not unlimited rights, there are so many things you can't do with your property that benefit current and future New Zealanders. Try building a new house, or starting a Dairy farm on your property you have to obey the law. Liberal economic thoughts gone through the twilight zone in this article.
The only people who should be able to buy property, are those who have the right to live here.
Anyone here with Irish ancestry and an opinion on the dangers of handing over control of land and industry to absentee foreign landlords who can choose to export everything if that's the most profitable option, and let the locals starve?
We'd all better get some potatoes in and cross our fingers they don't get blight.
Thin end of the wedge. This isn't about the next five years, but about the next 100 years. It's not impossible to gradually re-define who can vote. It's just legislation, and legislation can be changed.
Had you noticed that some of the more extreme factions of the GOP/Tea Party are already pushing the votes for landowners only barrow? The idea's out there, and with the twin forces of propaganda and mindless tribalism, you can whip up support for anything.
I don't think it's a likely scenario, certainly not in the short-term, but wouldn't be so sanguine that it's impossible, or that we (or more accurately our descendents) would have the opportunity to vote them out.
I take it that's a reference to this?
http://www.dhs.gov/deferred-action-childhood-arrivals
The right, available since 2012, for people who were brought into the country as children, and who have grown up there, who are of good character and have graduated high school, or served in military, and met a variety of other requirements, to apply to have deportation deferred.
Not the same thing. 'Democrats giving millions of illegal immigrants citizenship so they can vote' is pure propaganda and fantasy.
The full DREAM Act, which would grant the right to apply for permanent residency to those who meet the conditions, including serving a spell in the US military, has been proposed repeatedly but never passed, even if you've somehow got the idea that its in effect.
What an obnoxious article by a special interest group. Foreigners gouge our property tax benefits while baby boomer vendors gets fat payouts. Nz is left with a bloated housing bubble and McMassive accommodation supplement liabilities, and an increasing debt:GDP ratio as the few kiwis with money borrow big for fear of missing out. Meanwhile the economy becomes less competitive as people spend more on debt servicing to finance ponzi speculation. The less fortunate half pay ridiculously high rent (to foreigners) to finance their subsistence living. How is that a good outcome?
Exacerbated by deliberate actions / inaction of the National government. QE, ZIRP, and NIRP have pushed up asset prices without raising wages. There's no real growth anymore, only easy money and financial instability. We would have been much better off with a labour government IMHO. At least they would have put the breaks on a little bit. I'm not a labour stalwart, I'd vote national if I thought they were acting in the best interests of all kiwis., but they're not.
There is a difference between the two? The reality is that both parties aren't too far apart. Are you saying that Labour would have implemented CGT and that would have worked? The way i see it, demand is being pumped by foreign investment, no reasonable amount house building and tax would match this.
What a disappointing comment thread of shallow insults and redneck sterotyping. Please try and address the issue the author raises rather than just some sophomoric drive-by smears. If you can't be civil, don't bother to comment. There are plenty of other blogs that will take bile - please leave it off of interest.co.nz.
Disagreement is fine. But reason is required.
Oh come on, Mr Chaston. Your readership did not just fall off the back of the stupid truck, so kindly don't treat us as if we did.
I don't see any redneck smears here. Just people engaging with the points in the article, such as they were, with varying degrees of agreement.
If you're going to run poor quality articles from ideologically-driven propaganda mills, full of unsupported assertions, rhetorical sleight-of-hand, and an army of strawmen and similar logical fallacies, then you're going to have to take it on the chin when people notice and critique these flaws.
Well, if you want to retain any shred of journalistic integrity, anyway.
DC
All I would ask is 'What do you expect when the argument of the author is based on quoting as fact highly questionable results from her employer's documents?
I think there is sufficient abhorence of the conclusions reached to merit much if not all of the criticism the author has received.
On top of that a society can chose its laws, morals and terms of reference. What we can see is there is buying by foreigners in many capitals of the world making it harded for citizens to afford housing where their jobs are.
Simple a house is where you live and not a profit centre and we cna choose to remove undue influence.
and the reason in this article is? Maybe if you stopped getting people with political axes to grind that cannot backup their pieces except with nothing more than their blinkered opinions we might get better commentry?
I wait with bated breath and whispering humbleness, Say this;
'Fair sir, you spit on me on Wednesday last;
You spurn'd me such a day; another time
You call'd me dog; and for these courtesies
I'll lend you thus much moneys'?
VA...this is what happens when you have left wing socialism ruling an economy.
I'm all for private property rights there is no better system to operate under!!
This article is dressing up a paticular property right (the right to be a foreign owner/investor in NZ property) and it does not acknowledge that the proeprty rights of those residing in NZ are unfairly treated.
If this author was a true advocate of property rights then she would have acknowledged the unfair burdon and unfair treatment of NZ property owners in comparison to those who live in different jurisdictions. When the systems are not identical between a foreign investor and local investor and to then churn out an article defending one groups property rights over the other is nothing more than a deliberate diversion from the real issues of who's property rights are stolen to fund the system here.
Maybe foreign investors are nothing more than free loaders....if they are of benefit to NZ then surely this should be measurable in our NZ income tax take.....
In my opinion, foreign investors should have access the local property market with firmer restrictions. I know a kiwi friend of mine in a family members of three, changing the places time to time as cannot afford the renting due to the health restrictions in becoming employed as well as price hike bullying in rents. Apparently, the biggest influence is in the child's psychology, which is facing this economical instability along with changing the school time to time, can be a diverged mind in future as per experts (so called!!!). However, as per my childhood experience it was quite stressful to coup up with the new friends each time especially while to deal with the real rude ones. In the short term, we would be receiving enough money to survive ourselves at least to steer up our position in the global property market. Unfortunately, in the long run it will be a barren land with the corrupted Chinese (US, UK or NZ citizen) invaders, where black money is the legalized via the NZ property market. There is still a way for kiwi though to jump to OZ with two years of livelihood and heaven is right there. Dream that there will have a Robinhood by that time to save us, who cannot afford moving from this land due to several restrictions.
The question that every resident (not citizen or NZ'er) needs to ask is:
Do you want yourself, and your kids to become renters in your own country?
The rest is academic.
Given that a huge number of countries have restrictions on foreign ownership, NZL'ers have lost sight of the bigger picture, instead focussed on selfish personal gain from foreigners cash.
It amazes me that every day NZ citizens are preoccupied with nonsense from the media, whilst the opportunities for themselves and their children are stolen from them.
There are 60 million sheep in NZ, followed by 4 million people who act the same.
NZ was one of the first countries to go completely unsubsidised into the world's market- place so most of your article is complete bollocks and has nothing to do with property rights!!! A property right granted in one country is meant to be for the citizens/residents within the country that granted the property right NOT Timbuktu!!
Imagine if we applied Jenesa's same principles to voting at elections!!
According to a doc on Aljazzera the Chines Govt has a law that only permits 50k a year to be taken out of the country however they use family in Hong Kong to get the rest.An Australian realestate agent said it was not strange to have a 20 year old Chinese girl turn up with 4 million dollars to buy a house.
In some areas in Los Angeles Chinese buyers are buying up large in affluent areas but not living in the houses.One chinese lady said they do that so if anything go wrong in China they can just move to Los Angeles.
The best thing about this article is that I get to read the comments from like minded folk who actually are thinking on the consequences of this open door policy for buyers. Nice to know your not the only naysayer out there.
Otherwise it was bollocks as she's simply wrong to refer to this buy up as investment.
How xenophobic of Aljazeera to put out a programe pointing out that we are just the 7th on the list of this mass exodus of wealth driven madness.
The aim to flee from the confines of a one parent regime, to ensure that the ill gotten gains can be recycled through our non-corruptible banking and Government coffers and into property and not cheap property, in general to house the little "Dears".
Ahead of us were America, Australia, Canada, Britain and others that escape me.
Xenophobia must be expanding via the Middle East, to most points West.
Some main stream media report the facts, some ban them.
This article sounds like a school child saying 'why can't I be allowed to play loud music'. The argument lacks common sense and awareness of externalities or a wider community of interest. People don't actually have sacrosanct rights concerning property, for example they can't build a high rise or subdivide, or a host of things that impact others. Rights come with reponsibilities. It is based on sound principles , not xenophobia, for a small market like NZ to place restrictions on foreign ownership. It's not anti-capitalist or anti 'growth' (whose?) either. For example, just because we have road rules and enforce speed limits doesn't mean we are against people enjoying their cars.
http://www.nzhistory.net.nz/media/video/subdividing-cheviot-hills-roadside-stories
When ‘Ready Money’ Robinson died in 1889, his estate passed to his five daughters. Four years later they sold it to the Liberal government, which promptly subdivided it into 54 small farms and the township today known as Cheviot.
This was a landmark event in the breaking up of large estates. In the 1890s, the purchase of large pastoral runs by the Liberal government allowed people of modest means to get into farming. The government gained enormous popularity as a result. During this period, over a million acres of land was acquired and turned into 7000 small farms throughout the country.
Still, dont be too drastic. Howling with the wolves is what most people do to keep a job. It is legitimate to put forward the "everyone as they wish" point of view.
However, for a think tank a bit of diversity would be good. The odd contrarian view, right in the face of the mainstream. Lifts overall credibility, if nothing else. And can be good fun. Oliver, if you read this, think about it :-) I am sure there is someone on your team who has a gut full on occasion and would like to counter conventional wisdom.
I think it is fair to say that we (in the "West") live in a post-patriotic some even say post-democratic age. Maximization of monetary profits and personal hedonism are the new top values our societies are aspiring to. This is no accident, as in multicultural societies "having stuff", having money, is the lowest common value denominator. People from all cultures share greed and not much more.
This is want we want, this is what we vote for. You can also call it "property rights", if you like. When going to Third World countries, "property rights" are also very important. The rich have property rights and the rest can go to hell.
If anyone wants NZ to go that way, just be aware that sooner or later you also will have to hide your property rights behind high walls and security guys. For many people around the world this is normal - and at the same time they want to come to us because they also want to simply be able to stroll in the street at night without being scared. Cant have it both ways. It is either a simple and relatively safe life, or a financially richer and more precarious one.
However, only an academic discussion. NZers want the money. They will worry about the rest when it is too late. Human nature.
> The New Zealand Initiative is a market-oriented thinktank that operates from Wellington, New Zealand. It was formed from the merger in 2012 of the New Zealand Business Roundtable (NZBR) and the New Zealand Institute.[1]
- Wikipedia
This says it all really. The wealthy want to get richer by selling the country. When people are renters for life productivity and economic growth would increase as as they work hard to pay for rent.
Not all of the Jenesa story board is total rubbish.
She seems capable of some well thought out commentary. See
http://nzinitiative.org.nz/About+Us/Staff/Jenesa+Jeram/Insights+Jenesa+Jeram.html?uid=472
She could well be advised to hit the delete button over the current article in order to try to preserve some credibility.
Is there any evidence to suggest that weatlhy Kiwi's who own land spend more of the income from the investment domestically? For example Graeme Hart, one of our richest Kiwis, recently had a super yacht built... in Norway. Some of the 90m ish he spent on that yacht would have been earned here in NZ but spent in Norway, a net loss to the economy.
A Kiwi investor might own NZ property but be geared to do it so the income from the investment goes to foreign banks. In turn that Aussie bank income comes back to NZ through ownership of shares on the ASX; either through direct share ownership or through various funds.
A rich, asset owning Kiwi is just as likely as a foreigner to spend/invest their earnings offshore.
Thanks KH, I read that a lot and I'm not neccessarily disagreeing. What I'm saying is where's the evidence... Has there been a study by a reputable organisation that says there is a net benefit of $XXXXXX to a country that has blocked foreign ownership....
It just feels to me that a rich Kiwi is not neccessarily going to behave very differently to a rich foreigner. Take the Russian that bought that land up north and has built a massive pad; he would have put a lot of money into the pockets of local tradies, council, surveyors, etc for the build and ongoing injections of cash to the local restuarants, caterers, cleaners, landscapers, etc. When he comes down here for his month holiday (or however long he stays) he may well drop a lazy $200k on having a bit of fun. Contrast this with the old owner who I can comfotably say did not contribute as much to the local economy both in the short and long term.
I am not allowed on the land now and I wasn't allowed on the land previously so there's no debate there.
What the original article above advocates Happy, is that we work hard and be productive. Well I think we do. Slaves on the plantation work hard too. They just do not benefit from it.
What I have advocated is that we retain those benefits. And in all of this thread I have suggested one way is retaining ownership and control of our land and assets.
As for the 1890 land reforms, they are great evidence if you ask for some. And interestingly they were largely instituted by foreign born New Zealanders. (Mackenzie was a Scot). The challenge was to the large 'investor/employees' model rather than foreigners as such.
When we instituted control by owner operators, who got the benefit of their efforts, the country started to get wealthy.
I agree that an individual is better off owning something, more profit for that individual. If I (a Kiwi) owns the plantation will the slaves be better off than if a foreigner owns the plantation... No. Will the country be better off, not sure either way.
What you're really talking about is a distribution of wealth from the currently wealthy (domestic or foreign) who you perceive don't deserve it, to the less wealthy, who I assume you perceive to be more worthy...
We have a fine history of interfering in the ownership of land. New Zealand argiculture started as a 'plantation' model with large capital enterprises employing masses of low paid workers. The marvellous land reforms of the 1890s changed all that and created the powerhouse of family owned farms we still benefit from today. We could go there again.
Apparently it trampled property rights by passing law. Well yes, and what a good thing.
Have you seen the monument on the hill at Palmerston. It marks the regard this man had from the citizens. A good if challenging walk too.
".......John McKenzie's expertise on land matters won him the post of minister of lands in the Liberal cabinet from 1891 to 1900. He is best remembered for four things he achieved while holding that office: the introduction of a graduated land tax, which was incorporated in John Ballance's Land and Income Assessment Act 1891; the lease-in-perpetuity tenure or 999-year lease, which was the major feature of the Land Act 1892; the purchase of the Cheviot Hills estate in 1893 under the auspices of the Land and Income Assessment Act 1891; and the state's right of compulsory purchase, which was introduced under the Land for Settlements Act 1894. The celebrated Cheviot purchase was in fact forced on the government, but McKenzie seized the opportunity to make it a symbol of Liberal settlement policy. The land acts of 1892 were circumscribed by limited funding and did not produce nearly as many successful settlements as the more generously funded Land for Settlements Act 1894. The 1892 Land Act made the notion of the Queen's chain more explicit than any other piece of legislation: McKenzie wanted all New Zealanders to be able to fish the rivers, lakes and coasts and to enjoy unrestricted access to forests and mountains.
The efficacy of McKenzie's policies continues to be a subject for debate. Nevertheless, 1.3 million acres of land was opened up for closer settlement. Some 7,000 farmers and their families moved onto these properties, revitalised the countryside and accelerated New Zealand's move away from a 'plantation' type of agriculture to family farming.
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What a bizarre, bland and unsubstantiated article. The issue is clearly foreign investment in domestic real estate, which is completely unproductive - how on earth does this bring "technologies and expertise"?
Basically this piece is two fingers to hard-working kiwis - suggesting that individuals should be able to profit freely through cheap international credit at the expense of other New Zealanders and that private property rights outweighs our rights to affordable housing. Does it not matter that much of this money is dirty? That the Chinese president has addressed corrupt Chinese nationals investing in our economy because of an absence of money laundering laws? Or should the right to profit beat any type of moral or ethical issue?
And you claim that arguments against foreign ownership are xenophobic without providing any proof to your argument whatsoever! Summing up by saying "we need to work harder" - how offensive! We work hard, but we don't get paid much in this capitalist society - it's capital that is rewarded and that is the heart of the issue.
Basically you just retorted a bunch of right wing jargon. How embarrassing - I can't believe you put your name to this!!!
We expect better interest.co.nz.
I am an immigrant to this country, but I feel the same as many Kiwis born & raised here.
I earned my citizenship, and I earned my right to remain here, and bring up my family here.
My wife (of Chinese descent), did exactly the same.
Since we are not from rich families, everything we have came from hard work and sweat.
Why should we feel any solidarity with foreign "investors" whose only virtue is that they can bring a token "investment" to NZ, but in effect, it's purely a temporary state of affairs, and that money will leave as soon as the circumstances change?
Meanwhile, its depriving NZ citizens of an appreciating asset like a home, because they cannot compete with capital sourced from overseas, where the "investor" doesn't care if he makes a 20% or 30% loss (since its quite often illegally obtained).
Current government doesn't care, because all the MPs have most of their net worth in real estate.
These "investors" contribute nothing to this country. I pay taxes, and spend all my earnings here.
A country should be for its citizens first, no? And yes, the government can and should tell foreign buyers what they can do with their property, since THEY ARE NOT CITIZENS.
If they don't like it, they can try to find some other country to "invest" in where they get the same return on their "investment".
Why is the foreign investor sacrosanct, and to be kowtowed to, while ignoring the growing problems faced by the citizenry?
This raises the thorny question as to whether a citizen should have some benefit compared to a permanent resident.
A suggestion that permanent residents be limited to whether they can be allowed to invest in residential rentals would give an incentive to take the step to become a citizen.
Certainly becoming a local taxpayer for all income (given the four year exemption on overseas income now) could be used to lever into this situation. No one will convince me that new residents with limited language do not use managed real estate as an income base which requires little if any need to upgrade their language skills..
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