by frog
John Key’s concern about the extent of land sales to foreigners should be welcomed:
My concern is about what I see potentially unfolding and that is quite large tracts of New Zealand land coming available for sale rapidly and the consolidation of those farms in foreign hands and whether that’s in New Zealand’s best interests, and my view is, it’s not.
However, the same article contains a disturbingly xenophobic comment from the Minister responsible for the Overseas Investment Act review, Finance Minister Bill English:
English said his review of the act was “reasonably complex” and he was working to try and “tie down” possible rule changes.
Public debate over the issue “would benefit from more information” such as where most buyers were based.
“Just a tiny fraction of approvals are from countries outside of the UK and the US, France and the Netherlands,” he said.
Where foreign investors come from is totally irrelevant to the issue. As Russel Norman pointed out in his response to English, it is the scale of the sales, rather than the origin of the investors, that is of concern.
Foreign investment is driving up the price of rural land to an extent that it is unaffordable for many would-be New Zealand farmers to own their own farms. High land prices are driving farmers to make the maximum possible return from their land through ecologically unsustainable farming practices; resulting in polluted waterways, increased greenhouse gas emissions, poor animal welfare practices, and loss of biodiversity. Increased repatriation of profits overseas by foreign-owned farms will continue to drive the widening of the current account deficit.
John Key should be telling his Finance Minister these are the issues he should be focusing his Overseas Investment Act review on, rather than pandering to the underbelly of New Zealand society whose only concern about foreign investment is that it is from “nice white people like me”.
Published in Economy, Work, & Welfare | Environment & Resource Management by frog on Fri, August 6th, 2010
Tags: Bill English, foreign investment, john key, Overseas Investment Act, Russel Norman, xenophobia
on the trolls and those who are unable to keep on topic
Frog you had some spelling errors in your post – wording is fixed below.
Where South Island investors come from is totally irrelevant to the issue. As Australian Russel Norman pointed out in his response to English, it is the scale of the sales, rather than the origin of the investors, that is of concern.
South Island investment is driving up the price of rural land to an extent that it is unaffordable for many would-be New Zealand farmers to own their own farms. High land prices are driving North Island farmers to make the maximum possible return from their land through ecologically unsustainable farming practices; resulting in polluted waterways, increased greenhouse gas emissions, poor animal welfare practices, and loss of biodiversity. Increased repatriation of profits to South Island owned farms will continue to drive the widening of the North/South Island current account deficit.
Auckland City resident John Key (former Cantabrian) should be telling his Southland born Finance Minister these are the issues he should be focusing his Overseas Investment Act review on, rather than pandering to the underbelly of upper class Green New Zealand society whose only concern about foreign investment is that it is from “people like me”.
You just can’t write satire compared to what actually comes from politicans/political parties.
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WH – you missed out the bit about those awful foreigners only being worried about profits, and not carring for the environment or their animals nearly as much as the ethical Kiwis they buy their farms off (like the Cafars).
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It has nothing to do with “awful foreigners”. It has everything to do with economics.
Foreigners are not inherently more or less likely to care for the environment and animal wefare than New Zealanders. But the impact of large scale foreign ownership of rural land on farm prices has the effect of pressuring farmers, regardless of whether they are New Zealanders or foreigners, to strive for ever greater financial returns from their land – often at the expense of the environment and of the welfare of farm animals.
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toad – there are a multitude of issues from foreign ownership – both positive and negative.
You have massively simplified the situation, ignored all the positive aspects, taken one negative aspect, then wrongly attributed it to foreign ownership.
I think you find that in reality farm prices rose massively in recent years on the back of high international dairy prices – not on foreign ownership.
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that’s great photonz, especially after criticising toad for simplifying the situation. toad’s point is not that foreign ownership has caused this problem in the past, but that it will probably significantly exacerbate it in the future.
Personally I really can’t see how foreign ownership could be of any benefit to the industry. what are these ‘positive aspects’ that we’re ignoring?
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nommopilot says “Personally I really can’t see how foreign ownership could be of any benefit to the industry. what are these ‘positive aspects’ that we’re ignoring?”
You can only see negative aspects and not a single positive thing?
Are you serious?
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Foreign ownership? How would that be different from standard ownership in NZ? After all ‘in fee simple’ leaves it open for rates, RMA tests, noise constraints, air quality, dog licensing, house colour, weed control, pest management etc etc etc. To finally make the point the owner cannot take the land away. So hello? Where is the issue? Property is the asset of a new poor … intellectual property is where we should be looking if we want to protect our control over our lives and our families’ futures.
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Simple really, Neil. Supply and demand. There is a limited supply of farmland. If there are more players in the market to buy it – and there are many many more if it is global open slather rather than restricted to New Zealanders – the price goes up.
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I agree with Toad. All farming should be collectivised, that will firstly discourage the foreigners. Toad is otherwise right, we should be looking to North Korea where no foreigners are allowed to buy land. Look at how productive their agricultural system is and how happy their residents are when they work on the land.
[frog: At least WH's attempted satire at the top of the thread was vaguely amusing. Don't give up your day job, rjs131.]
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Just to add a take on how “massively” risen international dairy prices induced hugely risen dairy-related prices — in addition to bricks, mortar and pasture that is to say – instanced by rural shirts nigh on doubling in price.. one can summer without stockings but shocking shirts off one’s back is a burn too far..
I seem to be repeating myself in such matters.. is it me or are kiwis slow to learn that if you go around on gloat then costs shall soon grab you by the throat…
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oops, omitted to mention what provoked me to the above comment… “underbelly” — really, most provocative upon “nice white people”.. and mebbe aussies of a certain ilk!
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Its a vile racist dog whistle from Double Dipton.
“Yanks and poms and frogs are okay as foreign investors, cos theyre like us, but Im onto it to make sure we dont have too many chinks and wogs investing here”.
Bad look.
[frog: And here was me trying my very best to be polite and restrained about this.]
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Go Lady Penelope.
I suspect English is attempting to forestall the threatened renaissance of Lhaws and Peters, so it is a ploy to keep the bigoted anti-Asian and Islamophobic votes in the National Party fold.
Incidentally, Australians make up a good 10% of the land sales to foreigners over the last year – English seemed to ignore that when talking about the US, UK, France and the Netherlands.
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(says in indignant shaky farmers voice)
“My grand pappy didn’t fight off the yellow peril so the b@stards can own our land down the track, by blaarrdy jingo’s!!!”
.
Blinglish is a shonky honky!.
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toad – funny you blame foreign investors, but not greenies buying their toy farms.
Toy farms are what has hugely driven up farm prices in many places. If a farmer sells off part of his farm as 20 toy farms, he can make more money than he can earn from a century of farming (and still have a viable farm).
It’s very convenient to blame those nasty foreigners though, instead of our own toy farmers.
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The farming of toys is competing with dairy and pushing up farm prices. Quack.
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You may have a point there, but you are probably talking about greenwashers who want to portray a self-image, rather than real Green farmers who care about the land.
In any case, it would be very difficult to regulate to prevent that because, given appropriate farming choices (ever thought about growing garlic, or Crocus sativus – ie saffron?) a very small land area can be highly productive and profitable.
By contrast, foreign investment is easy to regulate.
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Bloody market forces ruining our productive economy again, eh Photonz1?
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toad – I was probably unfair. All sorts of people buy toy farms.
However I would dispute your premise that they are profitable. Only a very small percentage would produce so much as the average wage.
Locally we even have a society against toy farms, as a large part of the area close to our city that used to be productive, has been turned over to toy farms and now produces nothing.
And I think if you work out the hectares bought, and more importantly the price per hectare, I think it’s very likely that toy farms will have a far greater effect on artificially driving up land prices that ALL foreign investment.
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Sam Buchanan say “Bloody market forces ruining our productive economy again, eh Photonz1?”
Like many things, market forces can have both good and bad effects depending on the situation.
Unfortunately there are simpletons on both sides who see them as either all good or all bad.
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Re post at 1.49 Aug 6.
Slag off the Crafars appalling environmental and animal welfare record, and everyone here sticks up for them – what’s that about?
[frog: I don't see anyone in this thread sticking up for the Crafars. I'm not sure what motivated their appalling environmental and animal welfare record. I suspect just plain greed.]
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“Foreigners are not inherently more or less likely to care for the environment and animal wefare than New Zealanders”
I don’t think I agree.
Foreigners are less likely to care about New Zealand’s environment. And are less likely to worry about social pressure here – being in the newspaper over animal welfare issues just won’t worry them as much. But honestly, once you’re talking large corporations owning farms you’re no longer talking about owners who are people. A corporation is a beaurocracy: and they don’t tend to care much about the environment or animal welfare.
Regards photonz concerns re land being tied up in unproductive toy farms: yup, historically that’s been the main economic argument for a land tax. They discourage unproductive holdings, encourage productive holdings. Adam Smith made exactly that point regards land taxes and unproductive rural land – which is why he liked land taxes. So – keen on a land tax then photonz?
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ivehawk – I’ve never ever talked about land tax – what are you on about????
The reason there is a local society against toy farms is because previously the same land use to produce much of the food for our city – now it produces nothing.
You think foreigners are less likely to care about the land and animals than the crafars who they were buying then farms off?
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@icehawk August 7, 2010, 9:53 PM
Yep, fair point, I hadn’t thought about that.
Just like the greenhouse gas emissions from our coal aren’t seen as a problem if it is burnt in China, because its their problem, not ours.
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It was the British originally who took a large part of the income from our farming and would not allow us to export value added goods to the UK.
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Any country that so carelessly discards their own sovereign interests in the way NZ has so cavalierly done deserves every thing coming to it. When does foreign ownership of our most productive land become a problem? 10% 20%, 50%, 75%? Name a figure, and if foreign ownership of land achieved it , then it can, under the same regime, achieve the next one. So there’s a sort of reductio ad absurdum argument here, if you’re not comfortable with 50% ownership, then really you shouldn’t be comfortable with any ownership at all, because one will inevitably lead to the other.
There are many arguments against selling our long term interests to foreigners, Jim Anderton was a vocal supplier of them many years ago, I suggest rereading his many speeches and articles. Time has proven him to be correct. I would like all those who have so carelessly and cheaply supplied foreign interests with their underserved piece of the New Zealand pie to be charged with economic treason.
Basically this whole issue is incredibly funny in the sense of the comedy of the absurd. This is a small nation who’s total assets could be bought by the Chinese with the loose change in their back pockets. New Zealanders are going to have decide what their independence and sovereignty truly means to them, because a country who’s major productive assets are owned by others has no meaningful independence or sovereignty. All the pride in the “All Blacks” or the so-called ANZAC spirit or the number eight wire, becomes then a preposterous posing by a people with no meaningful purpose – a sort of pap patriotism fostered by commercialism for its further profit.
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Perhaps there is a difference between overseas corporate ownership of land in NZ and those individuals who come here to begin a new life in NZ and choose to farm – often the latter come here because of this country’s image overseas, want to be part of that and go on to become NZ citizens.
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“I’ve never ever talked about land tax – what are you on about????”
Classic photonz1.
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Green Tax Shifting: moving the source of government revenue from “earned” income (labour, business activities, farming.) to “unearned” income (use of land or resources), otherwise externalized costs (pollution), and the use of community-owned features (billboards, magnetic spectrum, air waves). Tax shifting is revenue-neutral, not a tax reduction or tax increase.
Resource use Taxation: levies on the use of fossil fuels, minerals, metals, aggregates, water, trees to encourage conservation, and levies on pollution into air, soil, water to equal the damage done (know as pigouvian taxes).
Land Value Taxation: a yearly charge on the assessed value of land irrespective of improvements, buildings or use of the land within a specific zoning. Since land values are community-generated, a percentage of the economic rent produced by land should accrue to government general revenue.
Economic Rent: the wealth generated by a resource monopoly in excess of the cost of production minus a reasonable profit, or wealth generated by land ownership in excess of the purchase price plus interest costs minus a reasonable profit.
http://www.earthrights.net/docs/ontariogp.html
http://en.wikipedia.org/wiki/Green_Party_of_Ontario
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“Public debate over the issue “would benefit from more information” such as where most buyers were based.’
——-
Are you sure this isn’t English’s way of saying he disagrees with John Key on the issue ie he could be implying the objections are based on xenophobia?
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“John Key should be telling his Finance Minister these are the issues he should be focusing his Overseas Investment Act review on, rather than pandering to the underbelly of New Zealand society whose only concern about foreign investment is that it is from “nice white people like me”.”
………
Ahhh the moral high ground again but……..
Still no condemnation from the Greens of Hone Harawira (said he would feel uncomfortable if one of his children bought home a [white person])?
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@jh 9:13 AM
The difference being that English was talking about public policy. Harawira was talking about what he would personally feel uncomfortable about within his whanau. If he had been advocating a public policy of prohibition of inter-racial marriage, like it was in South Africa under apartheid, your outrage would be justified. But he wasn’t.
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Harawiras comments aren’t racist Toad? Was he just saying he would be shy if one of his kids came home with a white person or was he saying he doesn’t like white people?
Is he not familiar with the culture outside Maoridom? Let’s face it Harawira is the member of the club?
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Just to throw some ideas out there after some thought on the pro’s and cons.
For example. A blanket prohibition on non residents owning land in NZ.
Pro.
Farmland becomes cheap enough for those who want to be farmers to own.
Farming or owning houses for capital gain in land values becomes less attractive.
House prices drop to a level locals can afford.
Young people can get into farming, housing markets.
Stimulus to business because less of peoples income tied up in paying mortgages.
More income available for savings, investment.
Land as a cost to people who want to use it for productive uses drops.
Less chance of ending up like the Spanish who live in the less valuable land while wealthy foreigners own all the coasts. Happening to us now.
Less borrowing required for land. Better exchange rate for exporters.
Helps rebalance economy towards productive uses.
Cons.
One off price readjustment similar to that in cars when used imports were allowed.
Reduction or loss of capital gains on land/Housing. Does not affect owner occupiers badly as they could then afford to buy and sell, upgrade, to probably a better house on the same market.
Could make rents increase briefly as landlords refocus on income from rents rather than capital gains. Should drop in longer term.
Owners overexposed to finance may find things difficult.
Banks would be very unhappy about lost volume of lending. The money spent on opposition lobbying would be tremendous. A pro. Banks power over our economy would lesson.
How do you compensate non residents who already own land. Do you just make it apply to any future sales?
Complying with FTA’s.
I am sure others can come up with more.
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“Was he just saying he would be shy if one of his kids came home with a white person or was he saying he doesn’t like white people?”
As I understand the context, he was saying he wouldn’t feel comfortable because a Pakeha wouldn’t understand the cultural environment of his family. Cerainly a presumption, quite a generalisation, and suggests a degree of intolerance, but not necessarily a sign of racism. I’d guess a lot of Pakeha would feel the same about one of their kids going out with, say, a Muslim Somali.
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Remember English is thick with the capital gains crowd in Queenstown and is likely to be pro foriegn investment in farmland (I stand corrected).
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I too suspect he is, jh, which is why he is trying to appease the Yellow Peril brigade by reassuring them that most of the investment comes from predominantly white countries.
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Sam@10:44 agreed.
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Kerry – you’ve done a good list of pros and cons.
But the problem is it’s a list of pros and cons of a big drop in land prices – not necessarily the same thing as a ban of foreign ownership.
There are a large number of factors that affect land and house prices – foreign ownership is just one factor, and a relatively minor one.
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Hi Photo.
Thanks for leading into my next point.
No it is a major factor and as we can see recently it will become a lot bigger factor soon. As someone, probably you, recently said, the foreign ownership of our land through the debt owed on it to overseas financial burglars dwarfs the direct ownership by foreigners.
However it is still significant.
The high price of farmland is only partially due to the high price of dairy products. Corporates are farming capital gains also. Farm prices are way in excess of anything justified by ROI of Dairy.
Does not bother China of course with endless fiat currency.
Around this area most of the higher value sections and farms are owned offshore or by very recent immigrants. Prices in the millions have put them beyond the reach of anyone local except Murray McCully. The $700k bribe to live in NZ will make it worse.
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“But most foreign investment is from nice white people like me”
……..
what you have picked on (and spun) is not so much a nasty prejudice but something innate in all species: an evolutionary adaptation where species draw a distinction between “us” and “them”. At issue is the well being of the NZ population as per who that most basic part of our well being is sold to. When Chinese are mentioned people react as they are wearing a not like us uniform. When it is poms or Dutch they wear the same uniform as us and so in a way are sneaking up on us. Being from the left of left of center Frogs spin is naturally racism and a chance is never lost to get the boot into John Key.
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jh tries his hand at evolutionary biology, LOL!
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And I don’t get your logic – referring to “Frogs spin is naturally racism” where what frog has actually done is call English out for dog-whistling to racists.
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jh tries his hand at evolutionary biology, LOL!
—-
So how did i score?
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Toad:
yes your right it is bill English
….
Does this indicate Bill English agrees with people who are more comfortable with people of their own culture (like Maori Party MP Hone Hawariwa -except that his people have lived amongst us and intermarried for generations)?
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frog has actually done is call English out for dog-whistling to racists.
…..
isn’t that aspect just a sideshow or is “put the boot into English” the aim of the game?
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jh: only if you think dog-whistling to racists is the aim of the game, or if politics in general is a game
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jh tries his hand at evolutionary biology, LOL!
=====
I just noticed something. I have a bird feeder in my garden with birdseed. One on one the green finches dominate the sparrows and are inclined to chase other green finches off even though there are 4 feeding positions. Sparrows dominate green finches by cooperating and holding all four positions. I’m not sure how sparrows get all 4 at once but it could be by being quickest to return after a scare.
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So what does that tell you about the evolvability of cooperation and altruism in relation to the NZ political scene?
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people who form groups (rotarians, Chinese, exclusive bretheren) will dominate the rest of us?
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