Only letting foreigners lease New Zealand land will not be much different from the status quo of letting them own it freehold, Prime Minister John Key says.
A bid from Chinese company Shanghai Pengxin to purchase the Crafar farms sparked a nationwide debate over the merits of foreign land ownership, with the Green and NZ First parties saying they are completely against any foreign ownership of sensitive New Zealand land.
The Labour Party, while opposed to Pengxin's Crafar farms bid, is still OK with foreign purchases as long as the new owners live here.
David Mahon, a New Zealand businessman based in China, said earlier this month that the New Zeland government needed to quickly decide on how it dealt with foreign purchases of farmland. His comments came after the High Court threw out the Overseas Investment Office's initial decision to approve Pengxin's Crafar Farms purchase, with the court saying the OIO had applied the wrong economic benefits test to the application.
The OIO revised its processes, and last week gave its approval for the sale again under a stricter interpretation of the Overseas Investment Act.
Speaking on TV One's Q&A programme over Easter weekend, Mahon suggested the government look at allowing New Zealanders to sell their land into a trust, which would then allow foreigners to invest in on a leasehold basis.
How about it?
On TV3's Firstline programme on Tuesday morning, Prime Minister Key said only allowing foreigners to invest in land leasehold was always a move a government could take.
“The challenge with that, of course, is that when you have leasehold land, if it’s a perpetual lease - forever for instance - then it has all the characteristics of freehold land," Key said.
The government was currently reviewing pastoral leases in the South Island, which were effectively the same negotiations as would be had with a freehold land owner.
“100 years [for a possible lease timeframe] is a long time. What ends up happening, of course is, those owners end up saying, ‘I’ve invested a lot on the property.' There’s a bit of a moral obligation to roll over their lease.
“So I’m not sure the characteristics would be terribly different to be honest,” Key said.
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