Losing control of our economic sovereignty

OPINION - FOREIGN OWNERSHIP OF LAND

The last time parliament had a good chance to debate the pluses and minuses of overseas investment was back in 2005. 

If the Green’s Party's Overseas Investment (Restriction on Foreign Ownership of Land) Amendment Bill had got past its first reading this week New Zealanders would have a had a chance to debate this issue once again.

A lot has happened since 2005. 

Back then the big issue was whether or not Shania Twain (a moderately famous Canadian singer) was the right person to own large swathes of scenic South Island high country land, Rod Donald for the Greens thought the land should be kept in New Zealand hands.

For the past three years the issue of selling productive farming land has been the No 1 issue in this complex area.

New Zealanders are very concerned about losing control of our economic sovereignty with the sale of the Crafar dairy farms into foreign ownership. The Green Party’s bill would have given Parliament an opportunity to address these concerns.

According to figures provided to TVNZ in July by Terralink, since 2005 the Overseas Investment Office has approved 312,600ha for sale – 280,000ha has been rural land.

The Crafar farms are actually a reasonable chunk of this, totalling almost 50% of dairy land sold into foreign ownership in this time.

New Zealand must protect its global advantage by keeping New Zealand land for New Zealand citizens, permanent residents and companies.

Big increases in food prices have been driven by rising population, rising middle-class spending power and climate change induced production problems, coming up against finite supply of food producing land.

This has led many governments and large corporates to buy up large areas of food producing land – about two million square kilometres in a decade – in what was called in New Scientist magazine the “global land grab”.

Our economy can’t be solely based on food production but it will continue to be important. If we keep it in New Zealand ownership with strong environmental protections and leading-edge innovation it can continue to be the goose that lays the golden eggs.

It is not in New Zealand's long-term strategic economic interests to rubber stamp large-scale purchases of our farmland to overseas buyers.

Small- and medium-sized New Zealand farmers risk being priced out of the market if we continue to allow overseas buyers to purchase our farms.

Overseas buyers looking to get a foothold here will often outbid local farmers.

The Overseas Investment Office frequently allows overseas investment on the grounds that it is an economic benefit to this country. However, this same office rarely checks up on this claim.

Figures released to the Green Party earlier this year showed show that over the last few years the OIO has approved virtually all applications by foreign investors to buy "sensitive" land.

The vetting process currently used to approve or decline foreign offers to buy land here needs to be put under scrutiny.

In the wake of the High Court’s decision regarding the Crafar farms it emerged that the OIO – which is happy to support all manner of dubious arguments regarding the benefits of overseas investment to New Zealand – never bothers to check if there is a downside.

OIO manager Anneliese McClure’s admitted to Radio New Zealand in an interview early this year that this was the case.

The fact the office doesn’t take into account the detrimental effects of accepting bids from overseas buyers, and the impact this could have on New Zealand’s current account deficit, and debt position should be a major concern to readers of the NBR ONLINE.

Earlier this year the NBR highlighted the OIO’s lax processes for monitoring conditions foreign investors must meet once a purchase has been approved is also of concern.

Once a sale goes through the OIO has very few staff (between three and four, according to sources) monitoring whether the foreign investor is meeting any of the conditions set down by law.

According to my information, these staff are also working on other tasks – so in reality monitoring consents is more a part-time activity.

Overseas owners frequently just send reports to the OIO via their lawyer telling the it that everything is great.

This is the state of our overseas investment regime.  A few individuals working part-time monitoring the thousands of square kilometres sold into foreign ownership.

One of the few positives in the Crafar saga was the decision to release – pretty much in full – the OIO’s decision to allow the sale of the Crafar farms to Shanghai Pengxin.

This is generally unheard of. Too often, all that the public can access is a small summary on the office’s website that tells us very little about the decision making process.

Unfortunately, that was about the only upside.

This office initially considered it is an economic benefit if an overseas owner buys a bankrupt run into the ground farm and gets promises to get it working again.

The Green Party’s proposed legislation would have meant the chance that defects in the way we run our overseas investment regime – as pointed out by the NBR – would have finally received some scrutiny.

Instead, raising this issue has met with rather tired and unfair claims that it is somehow xenophobic to question the economic benefits to New Zealand of allowing our productive farmland to be sold off in great swathes.

In my view, asking tough questions about the economic benefits of land sales and the poor processes of the Overseas Investment Office is something that needs to be highlighted by the media including the NBR and parliament.

Russel Norman is the leader of the Green Party. His private member's bill, Overseas Investment (Restriction on Foreign Ownership of Land) Amendment Bill.

The Bill was defeated at its first reading on Wednesday:

Ayes - 59: Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1.

Noes - 61: National 59; ACT 1; United Future 1.