By Alex Tarrant
If a foreign purchaser of New Zealand land is going to live here and not "bugger off" back overseas, then the Labour Party is not opposed to the sale, the party's finance spokesman David Parker says.
But absentee owners, who transfer future revenue streams offshore without bringing any extra output, do not bring enough economic benefits to New Zealand for the party to support sales such as the recent Overseas Investment Office ruling to allow Chinese company's Shanghai Pengxin's application to buy the 16 Crafar Farms.
Parker's comments come after the Overseas Investment Office released rulings that Canadian born film director James Cameron be allowed to purchase two farms in the Wairarapa. The OIO says in its decision summaries that Cameron and his family "intend to reside indefinitely in New Zealand and are acquiring the property to reside on and operate as a working farm".
See the two rulings here and here.
Labour strongly opposed Shanghai Pengxin's ability to buy the Crafar farms, for an estimated NZ$210 million, over a NZ$171.5 million bid from a New Zealand consortium led by investment banker Michael Fay.
Prime Minister John Key has defended the process taken by government Ministers to approve the Overseas Investment Office's recommendation approving the sale, saying Ministers could not have legally refused Pengxin's application.
OK if they don't bugger off
Parker told interest.co.nz Labour opposed sales of farmland to foreigners who would be absentee owners.
“If they’re an absentee investor, we’re opposed. If they’re going to live in it – because they’re coming here to live – that’s fine. We’ve always drawn that line. It’s not nation specific,” Parker said.
“It’s effectively their home – they’ll pay taxes in New Zealand no doubt, GST," he said.
“But you also have to be aware that if someone can pretend to be a resident, by coming for a month or two, and then buy land and bugger off again, and forever be a foreign investor, we wouldn’t treat that as legitimate."
A foreign purchaser of New Zealand land should "live a big part of their life in New Zealand".
“But if they’re absentee owners, no, we don’t see enough upside to New Zealand. The disadvantages outweigh the advantages,” Parker said.
“Other than the money they [absentee owners] bring, they don’t bring extra output. It’s not like they’re bringing intellectual property or some manufacturing capability that we don’t have. All we’re doing is transferring a future revenue streams for what we already do well to an overseas buyer,” he said.
Investments made by companies like Shanghai Pengxin, which will spend NZ$14 million upgrading the 16 Crafar Farms it has been allowed to purchase, would be no more so than investments made over time by other owners.
“Those farms won’t end up better than our best farms," Parker said, adding better farmers often replaced poor ones that went broke.
Parker did not agree with the proposition that in New Zealand there currently wasn’t enough money for investment in farms.
“The price of the farm might be different from an overseas purchaser, but the output won’t be different. I’ve never heard it suggested that the farm output of New Zealand is going to be materially better with foreign ownership of our farms," he said.
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“If they’re an absentee investor, we’re opposed. If they’re going to live in it – because they’re coming here to live – that’s fine. We’ve always drawn that line. It’s not nation specific,” Parker said.
Oh dear I think he is right, even though he is left.
Take a look at how Denmark keeps foreign ownership in check. It would work for us re housing/faramework only works if we all agrees. They do it because they have insanely rich germans next door who want nice farms and Holiday homes so they simply don't let them. They can only have them if it is where they are actually going to live- not sure how they police this, but I am betting that they police it well. We could learn a lot from the Danes and we have a lot of simiarities strangely enough their coffee is on a par with ours. Most excellent.
It can be done and it has to be done because there is simply too much money out there. We as a nation are right back where we were when elite British turned up and bought/stole the place. We are taking trinkets and blankets (fake money and flat screen TVs, BMWs etc) for our country. It is a deal that did not work out well the first time and will not work well this time. The legal framework only works if we all agree that it is fair. Otherwise it is just legally sactioned theft.
Prime Minister John Key has defended the process taken by government Ministers to approve the Overseas Investment Office's recommendation approving the sale, saying Ministers could not have legally refused Pengxin's application.
The Gov't had many months whereby they coulld have changed the rules but decided, for their own reasons, which we will never find out, not to.
Fundamentally, I am against foreign land, strategic business, assets and rental housing. Whilst Cameron's purchase is for me, reasonably acceptable given that it appears he intends to become part of the community, I still have reservations.
What I see happening, in the housing market and farming is that foreign money is skewing land and property values, shutting the door on Kiwis. The value of the land must be reflected by what IT can earn or what can be earned WHERE IT IS.
I watched the destruction of a small community some years ago when outside money, came in and drove prices way past what could be supported in the area. The collapse was rapid and foreseeable. The same thing is now happeining to the whole country. Really it is in a short space of time where we have gone from home ownership being the norm to now just an unattainable dream for most. Even an ad on telly acknowledges that, I was quite taken aback when I saw it
Now Kiwi farmers are less and less able to buy land due to foreign competiton. The recievers for the Crafar farms should have been made (somehow) to split those farms and sell them separately. To sell them as a "job lot" virtually ensured they fell into foreign ownership.
It is way past time we looked at some other models than this wholesale destruction of our way of life. I am extremely angry that my grandchildren very realistically face the prospect of being tenants in their own land and as long as I draw breath I will continue to rail against it
I assume you get PAYE the day you start working.....unless its all capital gain and then no tax.....but thats normal....
Not sure if he is American or Canadian? the Americans I think pursue ppl with money (ie tax) until they resign American citizenship?
Wonder if he is one of the brighter ppl and see's the world unraveling...so here's his bolt hole.....
regards
The size of land in Cameron's recent purchase is chicken feed compared to Swiss bio-engineer, Monte Welte's purchase of 5022ha freehold and 1480ha leasehold East Coast farming/forestry land he bought for $16,250,000 PLUS the 1926ha freehold and 55ha leasehold he bought for $5 also on the East Coast. He had already bought 1692ha for $3m in Feb 2011.
Why is it that dairy land gets the public all in a tizz but the above sale doesn't??
Unfortunately Whakatane Beacon doesn't have the printed article up on it's website yet - it is usually a few days after printing that it will appear on it's website, so I can't provide the link.
Labour is part of the problem here Helen Clark got the ball rolling:
New Zealand is the new Eden, its clean and green image the beneficiary of a public-relations windfall direct from Middle-earth. Americans are not just visiting the country in numbers unimaginable only five years ago—they’re immigrating, drawn by an arcadian ideal (never underestimate the pacifying effect of several billion sheep), breathtakingly cheap waterfront real estate, see-through fish-tank architecture, and an investment climate that, as one Las Vegas resort owner–cum–South Island winemaker puts it, makes New Zealand “the Switzerland of the South Seas.”
One of the most powerful forces in the shilling of the nation is Helen Clark, familiar to all Kiwis as Madame Prime Minister. In her book, there are no bad tourists, only ones with shallow pockets. And in a recent campaign that will go down in history, Clark aggressively packaged and promoted New Zealand as a place where Californians in particular, because of their relative proximity and the kinship in lifestyles, might consider putting down roots. “Active recruitment,” she called it, and some of the state’s richest residents signed up. Vive le marketing.
http://www.travelandleisure.com/articles/kiwi-country/1
http://www.gmi.co.nz/news/514/labours-third-world-solution.aspx
and the left in Labour and the Greens
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“Both in New Zealand and globally, the best of the leftwing tradition has always rejected small-minded nationalism, xenophobia and racism. In fact, leftists of an internationalist tradition have always favoured globalization and getting rid of national borders and barriers to migration. Progressive advocates of globalization of course do not defend a handful of rich imperialist countries, including New Zealand, dominating the world’s economy, but instead advocate an integrated and radically egalitarian world economy where production is based on social need and not on private profit. ”
http://liberation.typepad.com/liberation/2012/02/guest-blog-post-john-moore-leftwing-xenophobia-in-new-zealand.html
plus the fact that the people who have most influence in society are those least affected by a globalised property market.
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