Prime Minister John Key says there is no need to change foreign investment laws following the Crafar farms saga, and the government welcomes such investment if it leads to the building of new infrastructure such as milk processing plants.
However it would move to tighten the law if there was a wholesale run on New Zealand farmland by foreign buyers.
On Friday, Chinese company Shanghai Pengxin was given approval from the Overseas Investment Office and government ministers, for the second time, to purchase the 16 Crafar Farms. Pengxin is set to invest NZ$16 million upgrading the run-down properties, and is looking to process the milk produced on the farms in a New Zealand processing plant into higher-value dairy products like baby formula and cheese.
Speaking on TVNZ's Breakfast programme on Monday morning, Key said when the government had spoken to the Chinese in the past, it said it welcomed foreign investment in New Zealand.
"We say the same thing, by the way to the Americans and everyone else," Key said.
"My view with the Chinese has always been, if you want to come and buy every farm in New Zealand, we’re not interested thanks. [But] a few farms at the margins, sure," he said.
"I don’t think it’s a great thing if New Zealand sells off every farm in New Zealand, nor is there any intention to do that. And by the way, if there was a massive run on selling farmland in New Zealand, the government would do something about it. That hasn’t been the case.
“But if they come in and build buildings or processing plants, or create other opportunities, like the Japanese did 30 years ago...[then we welcome it]."
Following the Crafar farms saga, Key said he did not think the current foreign investment laws needed to be changed.
“When we came in [to government], we changed the law and tightened things up. So for all of the protest by the Labour Party, in fact they sold land at three times the rate we did when they were in government," he said.
"So I haven’t seen anything that would indicate there’s a run on land. There was a very specific example there: Everyone forgets about it, but when we became effectively the receiver of assets from South Canterbury Finance, they had about 45 farms. They were all sold to New Zealanders."
8 Comments
As you know Alex ...the OIO have a number of applications on the table from the Communists to purchase further N.Z. farmland.
Yes that's right Alex the Communists....not the Chinese as the P.M. would have us believe is the source of any apprehension.
So let's just have the conversation shall we...?
Do we now find ourselves cap in hand to a regeme thaty only 20 years previous,were percieved as the last politic on earth we would want to align with....?
So let's see now......where is the projected immigration for N.Z. in the next fifty years likely to come from...?
In key rual areas what would it take to displace a demographic and gain influence( not that money doesn't already) by vote.
Why are the media too afraid to say the word Communists when refering to our New Best Friends ...The Communists.....because they are Communists...you do know that don't you...?
"My view with the Chinese has always been, if you want to come and buy every farm in New Zealand, we’re not interested thanks. [But] a few farms at the margins, sure," he said.
I guess this is the same principle as buying a few (thousand) shares of IBM on the NYSE at a high price. It defines the price/value of the whole company.
Westpac And Rabobank won't be the only farm lenders breathing a sigh of relief.
We have allowed the sales of upper decile homes to rachet, by poor calculation, the NZ median house price higher by about $30,000. Why not farms?
A run on farmland - what I wonder are the parametrres of such a "run"? I assume it would be measured in hectares - so how many hectares on the market at any one time constitutes a potential "run"? Who is measuring this and how will we know when/if we have a "run" on?
Sounds like econobabble - a nonsense - with no practical application. Hence we can never have a "run" I suspect because no one knows what it is or how to spot it coming.
And besides, when/if tshtf (as it did for Crafar) we'll take anybody's money - nationalistic altruism doesn't "work" in the case of private property rights (probably why the Chinese nationalised all their productive land). The key, as Stephen points out, is to keep the price of the stock inflated.
What seems ironic - one would expect Nat Govts to get the business side of things right (and history shows just the opposite - they destroy local jobs and devalue assets) whereas Labour Govts the social side of things (and history shows just the opposite - they create welfare traps).
Uncanny.
Perhaps we need a grand coalition whereby Labour takes market regulation and Nats take social welfare regulation - then nobody works on what they think they are good at!
mwuahahahaha!!!
".... expect Nat Govts to get the business side of things right...."
Glad you clarified that. It is a definite keeper for a Tui's Ad.
My only expectations, based on National's behaviour since they gained power in 2008, are they will continue to borrow & spend like "the gambler".... , Oh. And sell out NZ's future to the highest bidder.
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