Foreign Investment
Adam Bennett in the Herald reports:
Prime Minister John Key has met with the Auckland-based Save the Farms group to discuss their concerns around farm sales to foreigners and says their proposed controls are “pretty hardcore” and more suited to North Korea than New Zealand. …
Later Mr Key told the meeting he had met with the Save The Farms group at their request and he believed it was not well understood what they were proposing.
The group wanted a ban on all sales and leases of farmland, orchards and vineyards to foreigners and constraints on forest ownership.
“It is pretty hardcore. Putting it bluntly I don’t think any country has that level of prohibition – maybe North Korea.”
While John McKearney who was backing Save Our Farms was “probably well intentioned” Mr Key noted he was a a property developer who had prospered by selling buildings to foreigners.
Hilarious.
What interests me about the Save Our Farms group, is whether any of them actually own farms? You see generally those who actually own the farms don’t want the state telling them they can not sell to the highest bidder. They are the ones who lose out – the current farm owners.
Mr Key yesterday addressed Federated Farmers National Council meeting in Wellington where president Don Nicolson had earlier given a speech railing against Save The Farms.
Mr Nicolson said the group’s stance “reeks of hypocrisy” given the residential sector carried $192 billion in debt, whereas the agriculture sector’s debt was just $47 billion.
“So I ask why just save our farms and not save our homes too?”
“When I see a Remuera property developer part of this group, I have my doubts about the purity of their motives.”
You go Don. Too right.
Of course Labour have joined Save Our Farms in advocating North Korean policies. Labour are effectively going from having approved 600,000 heactares of land sales to saying they will not approve any sales at all. Have those guys never heard of a happy medium rather than bouncing from one extreme to another?
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November 18th, 2010 at 11:19 am
I never really thought about this issue, until I realised that it could potentially set a president where the government is telling people what to do with the land they legaly own. Very creepy when you think. First the farms, then our houses, then what?
What options are there to allow free sale of land but control what the land is used for through legislation?
November 18th, 2010 at 11:24 am
Watches..?
The bottom line is that while we are running national deficits, have large personal and household debt and have low (and a few years ago negative) savings rates we really have no options but to fund our standard of living than by selling our remaining assets… We also rely on foreign investment to lift productivity…
People have to voluntarily change their habits and it seems financial pain is the only cure, a “banning” cure will just increase the scope and speed of the problem…
November 18th, 2010 at 11:28 am
{DPF wote:What interests me about the Save Our Farms group, is whether any of them actually own farms?}
Most probably
Society Members
Chair
Gary Bulog
Management Consultant, Auckland
Secretary
Lois Madden
Treasurer
Donald McKenzie Gibson
Accountant, Auckland
Members
Tony Bouchier
Barrister, Auckland
Sam Bufton
Auckland
Bruce Carter
Property, Auckland
Kerry Hoggard
Businessman, Auckland
Brendan Lawler
Solicitor, Auckland
John McKearney
Property, Auckland
Ian Morris
Auckland
Sir Bruce Slane
Auckland
Tony Weber
Forensic Accountant, Auckland
November 18th, 2010 at 11:53 am
Could it be that property developers are trying to depress the price of rural land so it’s cheaper for them to buy up for future property developments?
November 18th, 2010 at 11:56 am
“Meanwhile, Key also let on as to what he said was the main driver behind the rule changes to the Act – to do with the increasing possibility of large land aggregations made by states like China as food security issues loom.
“What we were worried about was a scenario, not where an individual or a company came in and bought a farm, but we can see that long term food security issues are genuine issues that countries like China and those with a very large population are considering,” Key said.
“And they could easily, if they wanted to, go in and buy a very large part of the productive base in New Zealand,” he said.
“Even if it wasn’t economic today, on the basis that they’ve got 1.3 billion people to feed in years to come, and all the economics tell you they do not have enough arable land to feed their people as their population not only rises, but their wealth rises and they demand higher prices.
“That could have quite a lot of implications for Fonterra, for our productive sector and for the way that we operate.
“So that’s the rationale behind the rule change – to try and reflect that there might be a changing pattern in there,” he said.”
http://www.interest.co.nz/rural-news/new-overseas-investment-act-rules-wont-have-massive-impact-land-values-pm-key-tells-fed-farmers
November 18th, 2010 at 12:05 pm
“I never really thought about this issue, until I realised that it could potentially set a president where the government is telling people what to do with the land they legally own.”
…..
Ownership of land gives you limited rights. You aren’t allowed to put a missile site on behalf of North Korea, for instance.
November 18th, 2010 at 12:24 pm
The Natural Dairy bid for the Crafar farms has distorted debate about sale of farmland to foreigners. The real objection to the Natural Dairy bid has always been about the flakiness of the people involved in the Natural Bid, and they range from Chinese Communist Party officials to NZ residents fighting off bankruptcy.
Key goes too far in branding the Save the Farms group as being as parallel to North Korea’s. Foreigners cannot buy land in China, and presumably they take huge risk in buying land in any country without a formal, safe land title system. I believe Russia, the world’s biggest country, may be one of these.
An important thing to be considered in any foreign land purchase regime ought to be protection of the family-farm system in NZ. This remains the basis of our export-based agriculture. Company farming has repeatedly been disappointing in NZ. One reason is that family farms ride out the cyclical commodity dips much better. Foreign investments in NZ that involve company farming, could validly be considered a potential threat to our agricultural export industries.
IMHO, there needs to be a distinction between company-farm investment in NZ and investment by migrant farmers bringing skills and money to go into our industry. In dairying, hands-on migrant investors with advanced expertise at present would come from dairy countries such as the Netherlands, Ireland, etc.
As for Nicolson’s point about land values, he is really arguing for foreign investment to keep the land price bubble high. Land prices should move up and down predominantly with economic returns from the land. It would be crazy to let vast international capital flows flood into NZ and distort this pattern.
As for non-farmers being behind this new save-farms group, I think non-farmers also run the free inflow of capital mob. Nicolson will be spending as much time in Wellington as Southland these days, and is currently filling the role of a lobby grouper more than a hands-dirty farmer. (He will obviously need to employ a manager.)
Of course foreign investment is needed in NZ, but our ex currency-punter PM and the ultra-free marketeers in Treasury aren’t the only people whose opinions should count.
November 18th, 2010 at 12:24 pm
Granted you can’t put missle site on a farm. But want if you buy the farm and just put a farm on it again?
November 18th, 2010 at 12:28 pm
They’re selling our “products” here….. [Harcourts in Shanghai - in ass'n with the National Party]:
“Chinese economy we all know about…
Chinese government says it’s time to grow offshore…..
Let’s take a good selection of New Zealands “products” over….
“We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country…. but hey!…. young people coming through see it as “our planet” rather than “our country”
http://static.radionz.net.nz/assets/audio_item/0011/2385074/mnr-20100824-0842-More_than_800-million_dollars_worth_of_property_on_display-m048.asx
November 18th, 2010 at 12:50 pm
Looking at the list put up by “Dirty Rat” there doesn’t seem to be any people there that would get their hands dirty. Until you can spend a day in a farmer’s pair of boots, take a hike. Blatantly all self interest.
November 18th, 2010 at 12:53 pm
And how do we get into a position where kiwis can’t afford their own farmland?
A collection of researchers at the National Institute of Regional and Spatial Analysis (NIRSA), R. Kitchen, J. Gleeson, K. Keaveney, and C. O’ Callaghan, have written a powerful new report on Irish property market policy and land development planning policy, critically examining both policy errors during the 1993-2007 period, during the post-crash period post 2007 (including a critique of NAMA) and making suggestions for the future. The link is here.
The report has a modern geographers’ perspective and is strongest when discussing zoning policy, development policy, and property-related tax policies, but there is still plenty of things for mainstream economics comments/discussion in the report.
The report makes clear to what a large extent post-1993 property-related government policy, right up until today, is driven by the interests of the property development industry. Coincidentally (or not) this industry is one of the biggest funders of the dominant party in government during this long period.
http://www.irisheconomy.ie/index.php/2010/07/29/nirsa-report-on-irish-property-market-planning/
November 18th, 2010 at 12:56 pm
“Looking at the list put up by “Dirty Rat” there doesn’t seem to be any people there that would get their hands dirty. Until you can spend a day in a farmer’s pair of boots, take a hike. Blatantly all self interest.”
……
how many farming people support Save our Farms? Surely selling to foreigners makes it harder for young people to get on the land. Or is this just a National party thing?
November 18th, 2010 at 1:06 pm
“Real estate is the back-bone of the country”… R D Muldoon
Bloody sad isn’t it?
November 18th, 2010 at 1:07 pm
Labour and their fellow Watermelons would appear to want to ban everything.
If they do it too fast, they will of course be out of a local job, and just have to travel at the Tax Drones expense. Eh Chris?
They are so engrossed in their own importance and so busy lining their own pockets that I am amazed they have the energy to
even contemplate being helpful. And surely is a ban on inward “purchase Investment’ is os critical, then by the same token all overseas
property acquisitions need to also be stopped, and any outstanding land owned by NZ residents taken for State Officials use.
Especially really nice Mansions in Monaco
November 18th, 2010 at 2:17 pm
So a bunch of socialists,but of a rightist tinge,are casting the collective “we” card to violate the rights of those who own farms and dictate to them just what and with who they can do with them.
They deserve the same response their leftist comrades get….”Fuck of out of it you buttinski,fascist twats”.
We do NOT all have a right to a say in what happens to land we don’t have a private ownership right in…..just because by an accident of birth you were born on the same landmass does not in any way give you rights over any privately owned area of that mass.Until you pay for some your opinion ain’t worth shit.
November 18th, 2010 at 2:50 pm
Libertarian James again calls everyone he disagrees with a fascist.
As explained in this debate on earlier days, James, ultimate title to all NZ land, with the possible exception of some Maori land, remains with the Crown, the State, the Gummint. Freehold is only the highest ranking right to occupy, transferable, and perpetual except in special circumstances in the past as in wars and for public works.
Libertarians are full of concepts about rights and devoid of concepts about duties. It’s interesting that Mussolini came from the ranks of anarchist libertarians before he evolved into a fascist. Your abusive, insulting style suggests you would have soon be cheering for Il Duce, James.
As it says on the Joke Buddha site, Libertarians are anarchists with money.
November 18th, 2010 at 2:52 pm
I would always assume you had to become a New Zealand Citizen to own land in New Zealand but hey fuck it obviously someone wants Winston Peters back in power so go for it.
November 18th, 2010 at 3:30 pm
‘just because by an accident of birth you were born on the same landmass does not in any way give you rights over any privately owned area of that mass.’
You get the right to vote and elect a government that does have the right to put in place laws that affect private land owners so I’m calling bullshit on your statement James.
November 18th, 2010 at 4:22 pm
If this is handled badly most of our grandchildren will look back at this period in NZ history and (rightly IMO) compare it to the muskets, beads and blankets deals with maori.
You should NEVER sell your land to people who are not an intrinsic part of your society. Particularly when it is obvious that the real farmers have moved on and the speculators have moved in. Parasites who fuck the economy for the majority.
You get nothing for nothing but there are always a few who keep trying.
November 18th, 2010 at 4:51 pm
Kaya:
Well said. The “muskets and blankets” analogy is apt, especially given that many of the commenters advocating a “pants down and grab the ankles” stance towards foreigner “investors” are the same people who say that the deals done 160 years ago were fair at the time and so require no redress today. Presumably when their grandchildren are seeking some compensation for their forebears having been pressured into selling their birthright they’re comfortable with them being to to sod off.
Quite why Save our Farms is opposed to leasing land I can’t work out – it seems unnecessarily extreme. If leases are permitted (and they already are) then there is no reason to open land sales to foreigners. That’s a reality that’s accepted – and enforced – in many of the countries of origin of these “investors” (some of which even forbid domestic real estate ownership by non-citizens) so they’d be a tad hypocritical objecting to NZ instituting the same protections. Instead, they look on in wonder (and laugh behind our backs) as we offer them a deal they’d never be prepared to offer us in return.
I don’t personally know many of the Save Our Frams group, but if Sir Bruce Slane is saying something, I’d certainly stop to listen, and think carefully about what was being said. Tony Bouchier is an undercover cop turned barrister. There might be a few in the group motivated by self-interest (as there are in any group, including the National Party… Pansy Wong, Melissa Lee, Bill English…) but that doesn’t negate what they’re saying.
Try reading Bruce Slane’s lucid explanation of what they’re about before accepting we should smile and wave at foreigners who want to own the very land on which we walk:
November 18th, 2010 at 6:33 pm
kaya,
“You should NEVER sell your land to people who are not an intrinsic part of your society.”
I am not xenophobic or nationalistic like you. I’ve done my share of travelling and found decent people everywhere I’ve been. I am happy to trade freely and peacefully with them.
So by all means indulge your prejudices with your own property: it is, after all, one of the rights of ownership. But please don’t threaten violence against me, as these people advocate.
November 18th, 2010 at 7:46 pm
wat dabney:
Which “these people”? Not Save the Farms, whose objects include:
Nowhere can I find the rider “…and if we don’t get it, we’re going to enforce our viewpoint by force”.
November 18th, 2010 at 9:00 pm
Tonight Close Up ran a story about using private land for pylons by describing one party as a ‘foreign owned’ as though a New Zealand company wouldn’t have the same rights. It’s all emotive bullshit that acts as the new opium for the masses.
November 18th, 2010 at 9:22 pm
To tell one how much one can sale their land for will result in the same problems the Witangi Commission now face. One can not infringe on the property rights of others and claim they live in a free country, full stop.
November 18th, 2010 at 9:36 pm
How much support does Save our Farms have in the rural community? Many Kiwi farmers would like land to be affordable, so the next generation can buy it. One wrote an article for the ODT suggesting a land tax would stop people farming for capital gains.
November 18th, 2010 at 9:45 pm
Labour and their fellow Watermelons would appear to want to ban everything.
If they do it too fast, they will of course be out of a local job, and just have to travel at the Tax Drones expense. Eh Chris?
……
I think the bludgers are those who made money out of asset inflation as it isn’t wealth creation it simply adds a charge elsewhere on the economy.
November 18th, 2010 at 9:53 pm
ssb – Sell land for whatever you can get for it but I believe it should only ever be to citizens of that land. Ironically enough you mention Waitangi. Didn’t that millstone stem from the fact that some people feel like they were ripped off in a land deal?
wat dabney – I am neither xenophobic (I am a foreigner but I’ve adopted NZ as my home) nor a Nationalist. I too have done my share of travelling and find most people open, honest and easy to do business with. I would be more than happy to form business partnerships, lease options, rent options, profit sharing deals with many foreigners. However at no point would I transfer title of land to someone who wasn’t a part of this country. I never want to be a tenant in my own country.
Be aware of one important thing, the world is positively swimming in Disney dollars which for now are contained. However the vessel containing them is springing leaks. Once this Disney money hits the world at large, the already exisiting money is going to be diluted dramatically. The cash rich are buying assets as fast as they can. They realise what they have in the bank isn’t going to be worth a whole lot in the next year or two.
November 18th, 2010 at 9:53 pm
I would always assume you had to become a New Zealand Citizen to own land in New Zealand but hey fuck it obviously someone wants Winston Peters back in power so go for it.
…..
Winston Peters was a threat to vested interests of the right and an embarrassment to the left as he advocated for ordinary New Zealanders who don’t benefit from increased immigration:
Auckland population growth to stretch land supply, increase the number of renters and create infrastructure problems, report says
http://www.interest.co.nz/news/auckland-population-growth-stretch-land-supply-increase-number-renters-and-create-infrastructure-pro
November 18th, 2010 at 10:06 pm
Rex,
This group makes it quite clear it is not just “calling for the support of New Zealanders” but also for the state to use its monopoly on violence to prevent these lands sales to people it doesn’t approve of.
They are threatening violence against people who would freely engage in peaceful exchange.
What does that make them?
November 18th, 2010 at 10:32 pm
How ironic, Kaya. You are a self-confessed foreigner who has adopted NZ as your home. Nothing wrong with that. But you want to deny others that same opportunity! Does that not strike you as a tad hypocritical?
The point about all this is we all immigrated here and made NZ home. The only difference really is the timing. What makes you think that today’s immigrants are any less deserving to become good hard-working NZ citizens just like the rest of us? Because that’s the nub of the argument. Racism and xenophobia, alive and well in NZ. Put it down to our insularity I guess.
This country has been built with foreign capital and foreign investment. Couldn’t have done it without it. Learn your history.
November 18th, 2010 at 10:34 pm
wat dabney:
Please don’t imagine I’m being deliberately confrontational as you seem a rational sort, but I really can’t see from where you’re deriving that assumption…
The state certainly has a monopoly on violence but it wouldn’t have to resort to that even if it woke up tomorrow and became a dictatorship. It would simply (echoing Winston) hold up a big “No” sign to would-be foreign landowners and they’d go away (or switch their investment to our sharemarket. Or lease the land. Or any number of alternatives).
Sorry, I see something went wrong with the link above but here’s the article by Slane in which he says, inter alia:
And, as I quoted above, their stated aim is a moratorium on further approvals until the public have had an input. Now you may well disagree with their objectives (and I don’t deny there are perfectly vaild reasons for so doing, I just happen to think the equally valid reasons for supporting them outweigh the objections) but I do think it’s quite unfair to characterise people like Bruce Slane as being some Fidel-like revolutionaries, wanting their ideas imposed at gunpoint!
November 18th, 2010 at 11:32 pm
Kaya, Rex, what do you expect to happen if NZ sells land to foreigners?
Do you expect those foreigners to take the land back to their own country?
Do you expect them to fill the land up with unwanted and unauthorised illegal immigrants? (As your bloody silly “blankets and axes” analogy suggests.)
Do you expect that, because they are foreigners they will not pay NZ taxes or obey NZ laws like NZers have to?
Do you expect that having purchased NZ land they will then declare that land an independent state?
I can’t figure it out, just what is your objection?
November 19th, 2010 at 3:35 am
MT_Tinman:
No, just all of the profits and as many of the jobs (by way of minimal or no processing in NZ) as they can.
No, that’s due to our equally slack immigration policies.
I expect that, not bothering to live here, not coming from here and not having friends or relatives here they’ll care about NZ about as much as I care about their nations (i.e. not a lot). That they’ll use their economic influence – and political donations – to attempt to conveince shortsighted governments to implement policies which may not be in NZ’s best interests but will be in theirs. And they’ll do this not because they’re “evil foreigners” but because it’s human nature.
Nationalism = love of country. Not all NZers love NZ (as the Winebox demonstrated) but the chances of a NZ landowner considering the long term future of this country is exponentially higher than the likelihood of it mattering to someone not from here and not having chosen to make this their home.
November 19th, 2010 at 6:06 am
I don’t see why it is so hard for them to get citizenship and reside here if they are so interested in the country, they can buy all the land for sale that way.