New farmland restrictions on foreign buyers welcome
Scoop | 1 December 2017
New farmland restrictions on foreign buyers welcome
Press Release: CAFCA
New Farmland Restrictions on Foreign Buyers Welcome First Step
The Campaign Against Foreign Control of Aotearoa (CAFCA) is very pleased that the Government announced that, as of December 2017, the rules around foreigners buying NZ farmland have been tightened up. Such buyers will now need OIO permission for all purchases of more than five hectares (previously, that requirement only applied to purchases of sheep and beef farms of more than 7,000 hectares (i.e. more than ten times the average farm size). It remains to be seen whether the OIO has the resources to handle this much greater workload (and to monitor buyers after approval to see that conditions of purchase are being honoured).
CAFCA wasted no time in meeting with the new Minister of Land Information, Green MP Eugenie Sage, to discuss this new land sale regime in detail, plus various other aspects of the 2005 Overseas Investment Act (which is the one still in force today). We gave Eugenie a copy of our 58-page submission on that Act (written by Bill Rosenberg). It is still extremely relevant today, particularly Bill’s detailed recommendations. You can read it on our Website at http://canterbury.cyberplace.co.nz/community/CAFCA/OIReview/2005/CAFCA%20Submission%20indexed.pdf
Right at the same time as this new land sale regime was announced, and at the same time as CAFCA was meeting Eugenie, it was announced that US TV host Matt Lauer had become the latest high profile celebrity to be outed and fired for sexually harassing women. Lauer is a controversial recent foreign buyer of prime NZ rural land, namely Hunter Valley Station on the shores of Lake Hawea. He is controversial here because he has not honoured his promise of previous public access through the property.
The circumstances surrounding the abrupt termination of his highly lucrative US TV career make him a candidate to be examined by the OIO for “being not of good character”, which is one of the few conditions imposed on foreign buyers in the Overseas Investment Act. It only applies to individuals owning or controlling a company; the corporate misdeeds of the company itself are not covered.
I can assure you that our complaints are neither “frivolous” or “vexatious”. Furthermore, we pointed out to Eugenie that there is no legal obligation on the OIO to respond to such complaints by any deadline (in contrast to the Official Information Act). Our latest such complaint was lodged in December 2016 – as of December 2017 we have received no response (I don’t mean “no decision”, I do mean “no response”). So, if our complaints are not rejected, they are simply ignored.
The new farmland regime has different criteria for forestry, where the Government says that foreign investment is still necessary. This is a perfect example of Rogernomics coming back to bite Labour. Jacinda wants NZ to plant a billion trees (one reason is to create a carbon sink as part of the battle against climate change) and the State will play a major role in forestry. This is reinventing the wheel, because until the 1984-90 Rogernomics government (and the 1990-99 National government), NZ had a massive State-owned forestry estate which had been built up over generations.
All gone, flogged off to transnational corporations and other foreign owners as part of the privatisation mania of that era (error, more accurately). In some cases, forests have been ripped out to be replaced by dairy farms (which is a sector also subject to significant ownership and control by foreign agri-business). If that shortsighted ideology had not prevailed, Jacinda would have inherited her billion publicly owned trees on Day One.
There are other shortcomings in the new regime. There is still no provision for the public to make submissions (or for the OIO to give advance notice of applications from foreign would be buyers). People only find out after the event. Most basically, the powers that be still don’t know (and haven’t made very much effort to find out) how much land is foreign-owned.
John Key used to say it was no more than 1% of the total. We can safely discard that. Statistics on sales of land to overseas interests are poorly recorded and incomplete. Our best estimate is that in 2011 at least 8.7% of New Zealand farmland including forestry, or 1.3 million hectares, was foreign-owned or controlled and it could have reached 10%. It’s a safe bet that the figure will not have gone down in the years since.
And this new regime “does not change the rules regarding acquisitions of significant business assets”, to quote from the press release announcing it. But land sales, although they get a lot of attention, only involve tens of millions of dollars. The real guts of any modern economy, the high rollers' lounge of the capitalist casino, is the business sector. That's where the billion dollar deals are done.
And we've heard nothing from the Government about what, if anything, it plans to do about the transnational corporations that so dominate the NZ economy (apart from the commendable, but comparatively minor, aim of trying to get them to pay their fair share of tax). For example, what does the Government plan to do about the cosy cartel of Australian-owned banks, who suck billions out of the NZ economy every year?
But this new regime on farmland sales is a long overdue start, for which the Government deserves credit. And we take heart from the fact that Eugenie is the first Minister of Land Information ever prepared to meet with CAFCA and seek our views on a subject on which we have acquired decades of knowledge and expertise.
What is needed now is a political willingness to consider NZ joining the list of countries which ban foreigners from buying rural land (not just farmland). Or just let them lease land, rather than buy it. If the Government is squeamish about doing this itself, then freeze all sales of rural land sales to foreigners and either set up a commission of inquiry into the subject or put it to a referendum.
There’s nothing “radical” about considering a ban on foreigners owning rural land. None other than John Key said that he didn't want to see New Zealanders become tenants in their own country. Agriculture, in all its many facets, remains the most important sector of the NZ economy. It is our comparative advantage in the global market, to use the jargon. Land is the basic building block of agriculture; who owns, controls and profits from it is of vital national importance. The first step has been taken; much more please and quickly.
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