New Zealanders are not at risk of becoming tenants in their own land, the government's Minister for Land Information said Sunday.
Speaking to Jessica Mutch on TVNZ's Q&A programme, Mark Mitchell (who is also Statistics Minister), defended New Zealand's overseas investment regime.
One interesting remark regarded land sales to foreigners that were not captured under the Overseas Investment Office's legislation. Mitchell suggested work was being done in that area:
JESSICA Is it robust, though, minister? Because we can’t quantify how much of New Zealand land is actually foreign-owned. The OIO looks at iconic and special land, but a piece of land that’s owned by a Chinese buyer or a Russian buyer that might be quite beautiful but doesn’t meet that iconic status, that’s not captured in those figures.
MARK I think that Statistics New Zealand actually is developing processes that allows us to capture a lot more of that information.
Other comments made by Mitchell included:
- "the net land that’s actually gone into foreign ownership is the same, and it’s been consistent over the last decade"
- A defense of the OIO's approval of the sale of Hunter Valley Station to an American buyer, saying the owners had been trying to sell the property to locals for five years without much luck before the international interest
- "Actually, some foreign investment into the country is really important because, as Kiwis, we like to engage and invest in other parts of the world as well, and we’re an open economy"
- "it’s really important to note that when we’re talking about offshore investment and overseas capital, which is actually really important, fundamentally, to our economy, is that we have got a very extremely robust process that they have to go through before that actually gets signed off. And before it’s signed off, there’s got to be clearly identifiable benefits that go in as part of the conditions before that investment happens and goes forward."
- That the OIO could demand an asset be divested if a foreign buyer does not keep to conditions imposed at time of purchase
Mitchell's interview was followed by a panel discussion on foreign land ownership in New Zealand.
Read the transcript of the whole interview below, as sent out by Q&A:
MARK Well the purpose of the OIO office is to make sure that every application is always in New Zealand’s best interests. And I think that – so in relation to Hunter Valley, just a little bit of context around that, Jessica, was that the same family has been faithfully farming Hunter Valley for decades. They’re older now; they want to retire. They’ve had the station on our local market now for five years looking for a local or Kiwi buyer. They haven’t had much luck. And, of course, they’ve had very strong interest from an offshore buyer that’s obviously got a real passion for the area. In terms of the public access, actually, the public access wasn’t that great. It is an operational farm, and of course, when it’s an operational farm, you’ve got to be careful around who’s moving across, especially with open access. But under the OIO application, actually we have increased public access.
JESSICA But in this specific case, though, they weren’t already negotiating with the council to try and get access through to that DOC conservation area and through to the lake of this very iconic property. They now don’t, and those locals there feel as though they’re missing out because of this American buyer.
MARK Those are two separate issues is that people can actually apply to the council to get access – or even through the Commissioner for Crown Lands. But what the OIO has done is they’ve made sure, through their process, which is quite separate, that actually public access is preserved and is actually being strengthened.
JESSICA That’s part of the act, of course, as you know – that you have to think about that. But in this case, was due consideration given? Because a lot of the locals feel as though this has been done by stealth, and they’re missing out on going for a walk in somewhere that they’ve walked in for decades.
MARK No, I can assure you that they’re not going to miss out on going for a walk. In fact, the public access has been increased as part of that OIO process. And, of course, the OIO office is always focused -- their primary focus is making sure that there are tangible benefits above and beyond what would have otherwise been a local sale.
JESSICA But just not walking access, in this case.
MARK No, walking access has been increased too.
JESSICA But it’s a goat track, though; you have to be a very experienced tramper or climber. We’ve been told that if you’re just a regular walker like you or I, you would struggle to get across there.
MARK I’ve been told that I could get across there.
JESSICA Maybe just me, then.
MARK So no, the access is very good. They’ve got access to the camp there. They’ve got access to an additional hut that’s on the station. There’s definitely been an increase in terms of public access. And some of these walking groups actually have got other options open to them to continue to look at increasing that access, as well.
JESSICA Bigger picture, though – are you concerned that this is happening more frequently? We’re having a big buy-up of New Zealand land, and a lot of New Zealanders are really concerned about it. Can you see their point?
MARK No, I don’t accept that there’s a big buy-up of New Zealand land at all. I think—
JESSICA There were 466 hectares – we’ve got those numbers from the OIO – and that was five times more than 2015, so 466 hectares in 2015—in 2016, rather.
MARK The way that that’s captured is technical, but what I can assure you of is that in terms of the net sales, they’re pretty consistent over the last decade. And we’re very conscious of that. We look very, very closely at that. And the OIO process is extremely robust in terms of--
JESSICA These are figures, though, minister, in fairness, from the OIO and show that it’s nearly five times more in 2016 than it was in 2015.
MARK I think, Jessica, it’s the way that number’s been interpreted. Some of those OIO applications that go through that involve land also involve Kiwis.
JESSICA But it’s foreigners having a finger in all these different pies.
MARK The actual — so the net land that’s actually gone into foreign ownership is the same, and it’s been consistent over the last decade.
JESSICA New Zealand First wants a register. Why won’t the government do that?
MARK I’m not going to talk about New Zealand First policy. I’ll just say--
JESSICA Why won’t the government do a register, then?
MARK So the government, in terms of—certainly from my office in the OIO, we are watching very, very carefully, and we have got a very robust process that is focused solely on making sure that any foreign investment—Actually, some foreign investment into the country is really important because, as Kiwis, we like to engage and invest in other parts of the world as well, and we’re an open economy, we’re recognised as being a very strong open economy, so good investment is good.
JESSICA Is it robust, though, minister? Because we can’t quantify how much of New Zealand land is actually foreign-owned. The OIO looks at iconic and special land, but a piece of land that’s owned by a Chinese buyer or a Russian buyer that might be quite beautiful but doesn’t meet that iconic status, that’s not captured in those figures.
MARK I think that Statistics New Zealand actually is developing processes that allows us to capture a lot more of that information.
JESSICA But it’s not robust now, is it?
MARK It’s getting better and better. And in terms of the OIO, we are able to monitor and watch very carefully, in terms of the applications that are coming through the office.
JESSICA But can New Zealanders find out exactly how much New Zealand land is owned by a foreign buyer?
MARK Well I know certainly, through the OIO, you’ve just quoted some figures and numbers there, so we can clearly demonstrate and show what applications we’re dealing with.
JESSICA So yes, you can tell us exactly how much land?
MARK Certainly from the OIO’s perspective, and that’s the portfolio that I’m responsible for, so the answer is yes. But I think that it’s really important to note that when we’re talking about offshore investment and overseas capital, which is actually really important, fundamentally, to our economy, is that we have got a very extremely robust process that they have to go through before that actually gets signed off. And before it’s signed off, there’s got to be clearly identifiable benefits that go in as part of the conditions before that investment happens and goes forward.
JESSICA Let’s talk about that process, then, because another concern that came up with people that we spoke to is they feel like they don’t have a say in the process; they don’t know when a transaction is imminent, when a foreign buyer is coming in, and feel like they don’t have a chance to say, ‘Hey, this is how it’s going to affect us.’ What do you say to that?
MARK I think, in terms of—If we take Hunter Valley Station, for example, that was on the open market for five years, so people were aware that the owners were trying to sell it. It’s actually a leasehold station, so they’re trying to sell the leasehold. And actually under the OIO, there is a requirement before any transaction goes through in terms of foreign ownership that it is actually gone out and advertised in the open market so people are aware of it.
JESSICA But people like Fish & Game say they’re just not being consulted.
MARK Well they, people are able to engage with the OIO if they have got a view or they’ve got information that they want to share around the transaction.
JESSICA In terms of the deal, for example, that people might promise that they will clean up a conservation area or build a walkway, and that’s part of the sale agreement, do you check up on whether they actually do it? And how far do you take it? Do you actually say to them, ‘Look, if you haven’t met this requirement by this time…’? How does that work?
MARK So part of the OIO process, there are a set of conditions that have to be met, and the OIO will continue to monitor those.
JESSICA Do you follow up, though? And what happens? Could you reverse the sale?
MARK Yes. Absolutely it could reverse. There could be a disposal of the asset. That would be the final step. Before that, there’s a whole range of options, starting with a written warning through to fines and then, possibly, the disposal of the asset.
JESSICA Do you require the public to notify you about that, or do members of the OIO go out and monitor and check?
MARK No, it’s a combination. The public certainly can notify us, the actual investor themselves is required to notify us if they feel like they can’t meet one of the conditions attached to the OIO approval, and, of course, we also go out and enforce ourselves.
JESSICA How many breaches have there been, minister?
MARK There have been several breaches that we have taken action on.
JESSICA Can you give us a ballpark figure?
MARK I can’t give you a ballpark figure. All I can say is that there have been breaches and we have acted on them.
JESSICA In terms of this whole situation, the locals and some New Zealanders in these situations do feel nervous. They do feel like this is happening without them knowing about it. Is it time for the government to sit back, take a breath, perhaps have a register, have something where the public feel as though it’s more transparent? Do you feel like the government should be doing that?
MARK I think that we should be listening all the time in terms of if there’s a way to improve a process. And actually, me as minister, welcome that sort of input, and I’ve had meetings like that since I’ve taken over the portfolio. Now we’re Kiwis, and we love owning property, and we have a keen interest in property, so it’s only natural that we have a real interest in how we’re actually managing—
JESSICA Do we risk, though, becoming tenants in our own country if we continue to let this happen?
MARK No, I don’t think we do. I think that the percentage of land that goes into foreign ownership and attracts foreign investment is actually very small, in terms of you know the productive land that we have in New Zealand, so I don’t feel like there’s any risk of that at all. And the fact that we’re monitoring it and watching it very, very closely also reinforces that.
JESSICA Does it matter to you who owns the land?
MARK Um, it matters to me in the sense that if we’re going to have some foreign investment, we should welcome that. We are an open economy. I’ve just been up to India with a business delegation where we’ve got Kiwis that are doing very good investments up there—
JESSICA But does it matter to you who owns our land?
MARK It matters to me that whoever is going to come and want to own a piece of New Zealand is that they’re passionate about New Zealand, is that they have a genuine interest in us and want to invest in us, and that they are actually going to deliver real benefits to us. And that’s what matters.
45 Comments
If Fred Nurk was an NZ born and bred citizen, living in the arms of welfare, on the government teat, for his entire life, started buying up $ millions of farm land, the IRD would be on his case PDQ, whereas a foreign national can arrive in-country, no work history, no tax-history, gain residency, then start flashing money around - no questions asked
If it happens in Oz it sure will happen here with our dodgy govt. Probably more so with the "at the end of the day" guidance given by our King of the Ponzi's
http://www.theage.com.au/world/chinese-police-chief-wang-jun-ren-jailed…
Pin your ears back
OIO approval is not required unless the land is classified as "sensitive" or the "transaction" exceeds $200 million - most coastal land and land around lakes is usually "sensitive" - as for the rest, so long as each transaction is kept under the $200 mil mark - pin your ears back
Australia used to have a $ limit based on each transaction, then they woke up and made it cumulative
Tim you're dead right. The commentators on Q&A missed most of the relevant issues. Its not just the recreational users who miss out, its the fact that foreign buyers push up the prices way beyond economic levels where NZ Farming families can compete. It also means we allow vertical integration of supply chains from land right through ownership of processing plants. Forestry is already majority in overseas ownership. Our very economic sovereignty is under threat under this government.
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11821…
Discussion will nor help. Best is to support change the government rather than have government whose policy is Denial, Lies and Manipulation
Tens of thousands of owner occupied homes have been lost to Chinese and other foreign rent seeking capital. A complete disaster for NZ and particularly for Aucklanders. The 2006 & 2013 Census questions have conveniently been changed to make direct comparisons impossible.
Indirect comparisons still available: The largest falls were for those in their 30s and 40s. In 2013, 43.0 percent of people aged 30–39 years owned their home – down from 54.6 percent in 2001. For those in their 40s, 60.8 percent owned their home in 2013, down from 71.5 percent in 2001”“
Good on Phil Twyford and Winston Peters for speaking up about it.
http://www.radionz.co.nz/news/political/304700/akl-home-ownership-rates…'
Yeah, this is ridiculous, transparently silly carry on. May as well argue that local wages are large enough to compete with foreign multi-millionaires. Astounding stuff.
Just as happened in Vancouver, we're seeing those in power continue to assure the hoi polloi there's "nothing to see here" until it gets to the point they're displaced by prices that have zero relation to local incomes.
JESSICA But can New Zealanders find out exactly how much New Zealand land is owned by a foreign buyer?
Over a million hectares directly, possibly several million more indirectly or via complex partnerships.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11309648
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Does it matter to the Govt who owns NZ land?
Yes, the more farms and land owned by foreign buyers the better, so we can eliminate these parochial 'sovereign country' outdated views by those loyal to NZ as a country.
Slick
Mark Mitchell - "I’ve just been up to India with a business delegation where we’ve got Kiwis that are doing very good investments up there"
Very glib and silver-tongued and dis-ingenuous
Foreigners (resident or not) cannot buy agricultural land in India. This is applicable to all of India. No state in India allows foreigners to buy agricultural land
http://nriinformation.com/articles4/agricultural_land.htm
Did you know, that some countries do not allow people to buy up their own land.....but allow their paper money to be laundered and cut and pasted into real money, by land banking and stripping and leveraging the proceeds....overseas.
I could explain...but as most of the MPs are already bought and paid for, it is not worth the effort.
Dishonesty pays.
One mans effort, is becoming not worth a lifetime of work to buy a House, a farm or even a business. Cos when you can print it and evade the consequences....why work. ..at all....in NZ.
The way of the future....is being ripped apart and off, by our own stupidity. ..trusting our 'Dear Expensive Leaders" with our assets...
We should print even more money "Ourselves "and buy up the World. with NZ Dollars...it might be worthwhile.
Trick or Treat.....or am I too early....with explaining Fractional Reserve Scamming and Tax Free Enterprise....to early New Zealanders.
The OIO's arrogant dismissal of most of the Fed Mountain Club and other recreational users submissions on public access for the Hunter valley sale shows clearly that Government policy is to put the interests of foreigners firmly ahead of Kiwis. The feeble excuse for locking Kiwis out is repeated in todays patronising lecture from Mitchell about the risks of recreationalists crossing working farms. Despite the governments own cycle way program doing that very thing and that thousands of Kiwi trampers and hunters and fishing folk cross farms every day of the year with no problem at all. If safety around a specific farming operation is genuinely an issue, make it the purchasers responsibility to address it. It's easily enough done.
The answers were insincere
When asked about the details of who owned what, Mitchell's response was non-responsive
He didn't know - but they - Stats NZ, are looking at it - Why Stats NZ of all people
He and The Nats don't want to know either - don't want a register - a database
If you don't know what's going on how can you govern
Time to Vote WP - he wants to know - he wants a register - so do I - we all should
Sorry but I do find Mark Mitchell the National Politician's remarks non trust worthy, since National have quite frankly sold this country in to a false economy and out to the highest bidder!
Voters are really going to be asking difficult questions over the next few months as house prices continue to fall with National continuing to do nothing? We really need a Foreign Buyers Tax!
China Moves To Stop Its Capital Outflow, Real Estate Markets Should Be Worried
https://betterdwelling.com/china-just-shut-off-its-capital-outflow-real…
Anyone, anywhere in the world can purchase up to 5ha of NZ, no questions asked, no statistics recorded.
When a NZer purchases a house, or up to 5 ha of land you are not competing with your workmates on NZ wages, you are competing on the World market.
Last year foreign buyers became required to have a bank account and tax number, not for a register, but to try and collect capital gains tax when they sell if applicable.
The minister for all his robust this and that, hasn't got a clue how much land and housing is sold to foreigners because there is no data collected.
It's a no brainer that if a foreigner can only get 1% or less interest for money sitting in a foreign bank account that they will purchase houses in Auckland with a 3% rent return and capital gains.
The farm discussed in this article might have been for sale for 5 years but not at a price that had it on the NZ market.
My own opinion is that "cute" properties sold to foreigners is good for NZ. The Russian who purchased a coastal farm at Helena Bay Northland has spent 50 plus million dollars building NZ's biggest house. He employs lots of people. I think that has been a win win.
Selling our housing and land no questions asked however has become an unfolding disaster. For the minster who collects no data to say they have robust control of the situation is an insult to our intelligence.
I was recently in a remote part of the country and drove along a public track that runs over private land to a DOC administered beach area. Access had never previously been an issue. I was accosted on this track by the agitated land owner who demanded in a thick foreign accent to know where I was going. Instead of letting him know in no uncertain terms what I was really thinking, I politely explained I was going to the beach to gather Kai. Further aggressive questioning followed about who I was. He was intent on preventing me driving further. I kept cool and responded to his interrogation in a civil tone. He finally reluctantly moved aside and allowed me to drive through.
Back in town I made enquiries about this property situated on a pristine stretch of coastline and its abrasive owner. To facilitate the sale the usual RE agent and lawyer created spin had been used to justify another foreigner being allowed to scoop up the most beautiful parts of our land - property on market for years, no local interested (surprise surprise when the price is specifically pitched at a level that will only attract well oiled foreigners), tourism potential to be developed, productivity of farm to be increased, a special breed of zebra from the north pole to be bred there, etc. All of which will sound familiar and none of which has eventuated.
Would the bolt hole land sale racket diminish in any way if the Govt was to take a hard line on public access instead of the limp wristed decisions we currently see? I very much doubt it.
NZ access points, paper roads etc.
https://www.wams.org.nz/wams_desktop/index.html
No risk you say. Tell that to Maori. They also thought that they were making the pie bigger, until the late 1850s when us sneaky so-and-sos overtook them in population size, then laid down the (new) law.
http://www.teara.govt.nz/en/graph/36364/maori-and-european-population-n…
The rest, as they say, is history.
What this tells us is that we have neither good land ownership by nationality data,nor good statistics on land transactions by nationality.
But that we do have a wealth of anecdotal data, mother-in-law's research if you like, about land ownership, transactions, and nationality.
Is there the political will to develop such statistics? Properly mind you. Not the fudges that currently masquerade as data.
And if such statistics were available, what would be the point? Would it be the start of a slippery slope. . .
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