New Zealand opposition party urges tighter foreign investment restrictions

"Labour will turn the rules on selling land to foreigners on their head," says Phil Goff

Bloomberg | Oct 18, 2010

By Phoebe Sedgman

New Zealand’s main opposition Labour Party will tighten restrictions on overseas purchases of the country’s assets if it is elected to government next year.

The “overwhelming majority” of applications would be rejected unless potential buyers could prove the purchase would create jobs, bring new technology to the country or increase exports, leader Phil Goff said at a party conference yesterday.

“No overseas person has the right to buy our land,” he said in a speech posted on the party website. “It is a privilege we have granted too easily. Today you have my commitment that Labour will turn the rules on selling land to foreigners on their head.”

New Zealand this year altered rules to require foreign buyers of large tracts of farmland to show how an acquisition benefits the nation’s economy. The decision came after a backlash against overseas purchasers targeting farmland.

A TV3 poll in August showed 76 percent of respondents wanted rules toughened following reports a Chinese company planned to acquire a number of properties including the nation’s largest family-owned dairy company, Crafar Farms.

Labour attracted 33 percent support in a TV3 poll of 1,000 voters in the week ended Oct. 6, lagging behind the governing National Party with 54 percent. The next general election must be called before November 2011.

The new policy would apply to all foreign investors, including Australians, wanting to buy tracts of land exceeding five hectares (12 acres), Goff said.

Labour would also prevent foreign purchases of more than 25 percent of monopoly businesses including airports, ports and water services, Goff said in a Television New Zealand interview before the conference.

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