Greens and Labour waging war on overseas investment

The Greens’ private members bill restricting, in other words banning, all sales of farm land of more than 5 hectares to an overseas investor was defeated last week by two votes. Under a Labour/Green coalition, ably assisted by NZ First and the Maori Party, the terrifying thought is this piece of xenophobic ignorance would be passed into law.


There’s a more than remote possibility of a change of Government in 2014, so this, or some variation of it, could become Government policy and would easily gain a majority in the house. Back in March David Shearer put up his first private member’s bill on the same issue which sought to ensure substantial extra jobs and exports from foreign investment. There were some embarrassing omissions, but the intent was clear, if not as draconian as Russel Norman’s bill.


It’s the nature of politics for opposition parties to vote against the government of the day, but it is a concern to see Labour tucking in behind the Greens, when the party’s original position was nothing like as jingoistic. There’s a world of difference between demanding added value and jobs from an investment, as in Shearer’s private member’s bill, and a total ban on foreign ownership. I sincerely hope Labour as presumably the lead party in any future coalition would dictate the policy and not allow itself to be wagged by the Greens’ tail.


The progress report Building Export Growth released last week says nothing significantly different from 2007’s Export Year issued by the two responsible Ministers at that time, Phil Goff and Pete Hodgson. Essentially both state a goal of increasing New Zealand’s exports to 40% of GDP from 30% where it has obstinately sat for 30 years.


Labour’s new position in support of the Greens’ xenophobic attempt suggests the party has moved light years away from its position of five years ago. Without overseas investment and shackled by our high debt level, New Zealand cannot possibly aspire to the optimistic export goals of successive Governments from both sides of the political divide.


Federated Farmers must of necessity be careful when taking a policy stand because it represents, and depends on subscriptions from, farmers who will clearly hold differing views on the benefits of overseas investment in land and agricultural assets. However Bruce Wills tells me Feds are generally in favour of foreign investment because of our high level of indebtedness, but with some caution with respect to acquisition of large holdings by foreign corporates. In fact he says our overseas investment criteria, toughened recently to satisfy Justice Miller’s Court of Appeal ruling on the Crafar farms deal, are the fifth strictest in the OECD.


He compares New Zealand’s position with that of Australia which has a more open overseas investment policy, while Australian farmers only have a third of the debt. New Zealand farms can carry a higher proportion of debt than their neighbours across the Tasman because our benign climate provides a bigger safety margin, although even this is less certain given the apparent increase in frequency of flooding and earthquake activity.


Interestingly the question of foreign investment conditions is now coming under closer scrutiny in Australia, where the Liberal and National Coalition have put out a policy discussion paper ‘Foreign Investment in AgriculturalLand and Agribusiness.’ This paper states upfront the Coalition’s support for foreign investment in Australian assets and its belief ‘heavy-handed restrictions on inward foreign investment could negatively affect debt and equity markets or potentially cause restrictions on Australia’s outward foreign investments.’ However the paper notes the sale of Australian land and agribusinesses are treated no differently from any other business at present.


The Australian opposition takes the view there should be some tightening up of the rules applying to the sale of land and agribusiness assets, but this position is still diametrically different from the one proposed by the Greens and, judging by the recent vote, Labour as well.


Federated Farmers’ Wills points to the likely $1 billion cost impost on our agricultural sector if Labour and the Greens get the chance to implement some of their key policies, specifically ETS and capital gains, not to mention preventing foreign investors from buying farm land. This would have the effect of reducing profits and as a result increasing debt levels in the agricultural sector.


In 2011 dairy, meat and wool, and horticulture accounted for 43% of export goods or 34% of goods and services. This suggests New Zealand can’t afford any reduction in their relative contribution to the economy, whether or not any progress is made towards the Government’s target. Changes of the kind presented to Parliament last week would present a massive head wind.


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3 Responses to “Greens and Labour waging war on overseas investment”

  1. Overseas investment bill defeated | It's MeatExportNZ Says:

    […] Read more … Share this:EmailPrintMoreDiggShare on Tumblr Pin It This entry was posted in New Zealand At Home and tagged Allan Barber, Building Exports, dairy, export, government, Green's, horticulture, Labour Party, meat, wool by Editor. Bookmark the permalink. […]

  2. Rural round-up « Homepaddock Says:

    […] Greens and Labour waging war on overseas invest – Allan Barber: […]

  3. Grant Says:

    “Meaty Matters”
    column August 27 provoked
    me into doing something I’ve
    put off for years – to say I’m an
    indigenous New Zealander, i.e.
    born here, proud of it and the land
    we call our country.
    Allan wrote of “xenophobic
    ignorance” which by dictionary
    definition means “a marked dislike
    of foreigners” i.e. foreigners buying
    New Zealand land.
    In my view it is not xenophobia
    but is far more akin to a spirit of
    It is too easy and negative
    to indulge in name calling. It’s
    evident in the controversial
    subject of global warming, where
    the doomsayers label those who
    challenge the theory of a warming
    earth as “deniers”. Deniers or
    should it be realists?
    On foreign ownership two
    current cases spring to mind.
    The first is Rio Tinto, formerly
    Comalco. A cost/benefit analysis in
    1972 given by John B Henderson
    in a Victoria University lecture
    “Man and his Environment”
    showed New Zealand in supplying
    electricity from a public resource
    of Lake Manapouri to the multinational
    company, made an annual
    loss of $7 to 8 million. Inflate that
    to 2012 values?
    The mind boggles at the likely
    figure. At a rough guess, it is
    probably 20 times the 1972 loss?
    Shortsightedly the then
    Holyoake National government
    and successive Labour and
    National led governments have
    continued the folly and the
    financial loss.
    Another case. In Marlborough
    NZ King Salmon’s plans to expand
    its salmon farming operations in
    the Marlborough Sounds using
    a government fast track process
    set up by the Key government
    to ride roughshod over the local
    council’s community-driven
    resource plan. The Sounds and
    seabed are a public resource. The
    misnomer is in the company’s title
    NZ King Salmon. The Tiong family
    as one commentator put it, “one
    of Malaysia’s most powerful and
    wealthy families” has a majority
    53% ownership of the company.
    NZ King Salmon? Hardly. More
    like “Malaysian King Salmon”.
    The Tiong dynasty has a track
    record of milling rain forests in
    Sarawak and logging in Russia. In
    New Zealand it is the 4th largest
    exotic forestry company under the
    guise of Ernslaw One.
    In Marlborough it has bought a
    high country station, taken it out
    of cattle and sheep production, to
    “farm” carbon credits. It is seeking
    to buy more farms. Is that in New
    Zealand’s best interests?
    That’s just two cited. What of
    the many others?
    Allan Barber slams Labour
    for supporting a Green Party bill
    seeking to ban foreign ownership
    of farm land. After all, the
    Clark-Cullen Labour government
    if anything made it easier for
    foreigners to enter.
    The Birch-Bolger National
    government openly wooed Asian
    investors just as Key and English
    do. Interestingly the one party with
    consistency and warning against
    foreigners buying NZ up in large
    chunks is NZ First.
    The late US president J F
    Kennedy summed it up when
    he wrote in the 1970s that “each
    generation must deal anew with
    the raiders, with the scramble to
    use public resources for private
    profit and with the tendency to
    prefer short run profits to long
    run necessities.” Xenophobia or
    patriotism? You take your pick.

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