Govt vague on how it'll fulfill ambitions of doubling the amount of capital migrants bring to NZ in three years to $7 billion

Govt vague on how it'll fulfill ambitions of doubling the amount of capital migrants bring to NZ in three years to $7 billion

The Government’s new “Strategy” to attract more foreign investment to help boost exports and get businesses spending more on research and development (R&D) appears to raise more questions than it provides answers.

Economic Development Minister Steven Joyce has announced Cabinet approval of a New Zealand Investment Attraction Strategy.

He says NZ needs $160 billion to $200 billion of business investment to meet the Government's goals of raising exports to 40% of GDP and business expenditure on R&D to 1% of GDP.

Joyce says we need the help of foreign investment to meet these targets.

Cabinet has approved a plan to get senior officials from New Zealand Trade and Enterprise, the Ministry for Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade, Callaghan Innovation and Treasury, working together with the private sector to attract investment.

Does this mean new committees overseeing old committees, creating subcommittees? Yes.

However it's not clear exactly how these committees will fulfill the Strategy’s goals of:

  1. Increasing the amount of capital investor and entrepreneur migrants bring to NZ from $3.5 billion to $7 billion over three years.
  2. Facilitating investments with a potential direct economic impact of $5 billion over three years.
  3. Attracting at least 10 new international companies to do research and development work here over the next five years.

Considering target number 1 first, the Strategy says the Government will “review relevant migrant visa categories to enhance their attractiveness to high-quality applicants”.

However there is no real explanation in the 13-page Cabinet paper, of what this review will look like, and how much easier the Government wants to make it for migrants to come to New Zealand.

It says, “We need an end-to-end approach, from the design of visa categories and the associated application and approval processes, through to migrant attraction programmes and, importantly, the work that is needed to leverage the presence of investor and entrepreneur migrants already located here”.

It also proposes to double capital from migrants by “deliver[ing] a series of tailored promotional events in key offshore markets” and “develop[ing] a programme to introduce migrant investors into local business and investor networks”.

Looking at target number 2, the paper says priority will be given to attracting investment that: “Increases the economic returns from natural resources” and “enhances NZ’s access to export markets and domestic firms’ integration with global value chains”, among other things.

It says we need to showcase investment opportunities in priority sectors overseas, and “work with regional and Māori partners to develop propositions to an ‘investment ready’ status”.

The Strategy’s proposed actions to meet target number 3 are equally as vague.

The Cabinet paper says, “Engaging with the research community will help develop understanding of the pipeline of R&D investment opportunities (such as through the Lincoln Hub, the Christchurch Innovation Precinct, Food HQ and Technology Valley) and enable us to champion a ‘solutions-led’ approach to engage with strategically targeted companies to meet their R&D needs”.

So what’s implementing this Strategy going to cost us? Nothing, apparently.

The paper says there are “no financial implications arising from this proposal. Resources may need to be re-prioritised to give effect to the actions within the Strategy. Any decisions on resource allocation will be made within existing authorising mechanisms.”

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18 Comments

17
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As far as I am concerned allowing people in just because they have money has not enhanced this country one iota. The only thing they contribute to is inequality and alienating NZers

Just look at the Kim Dot Com debarkle... pahha!

this is so short sighted its not funny.
talk about creating a hiding hole for a lot of rich people than may have not got there money in a legal way

Perhaps they are hoping there will be buyers for the distressed dairy farms and the ball can continue rolling. Large tracts of farm land in a relativey stable western democracy, even if under performing, may be very attractive to cashed-up overseas buyers wanting a bolt hole !

Keep this in context. There is a recent Mark Faber video out where he talks about what I have been saying for a few years now, the options are debt default or hyperinflation for the western economies. You can see which camp out politicians are currently in, the milk price problem will seem them taking desperate means to keep us (apparently) afloat.

You cannot hype-inflate IMHO so default.

The 'milk price problem' (which the politicians seem to ignoring the severity thereof) is already causing our economy to stall.

Most of us knew it would eventuate as we've seen the deer, goat, fine wool, horticulture ets etc bubbles before. We predicted, while yarning over the farm gate, that not only would it eventually cost us in terms of economic failures but in environmental and social ones as well.

We are a great nation of followers, all-be-it some years behind. Where are the men of vision, god knows we need them now !

We aint seen nothing yet !

http://www.toledoblade.com/Food/2015/07/03/Too-much-milk-leading-U-S-dai...

The Government’s new “Strategy” to attract more foreign investment to help boost exports and get businesses spending more on research and development (R&D) appears to raise more questions than it provides answers.

Certainly seems our bribed and past friends have taken the plunge, while we chat on the sidelines.

The Public Investment Fund (PIF) of Saudi Arabia in partnership with the Russian Direct Investment Fund (RDIF) has agreed to invest $10 billion into Russian projects. It is the largest foreign investment in Russia. Read more

dp

As long as they let that capital speculate on real estate instead of productive business they are just digging the hole deeper.

It is meddling by bureaucracy that created the housing problems yet you seem to be implying that NZ should adopt some capital flow directions which is just more meddling!!

You do know it was the Labour Government who set this real estate direction up and no one wants to undo the policies......National and the bureaucracy are like the race between the Tortoise and Hare and the Hare has lapped them....you cannot allow Government and bureaucracy to interfere in the markets!! So I would suggest that they take the hurdles down and capital will be directed appropriately!

There have been quite a few investor class immigrants in my neck of the woods. They have mostly bought existing businesses and cobbled up some nonsense about how they were going to expand these - more staff, exports and so on. With one or two exceptions they have been complete failures.
The "entrepreneurs" are still here though, maybe we should retain a deposit on entry for their ticket home.
What sort of study has been done on the success of these schemes or is it all just ideology and theorising?

The rubber stampers are so busy with next weeks "plan" they don't have the time to go back and check if last weeks "plan" worked or even that "plan" they wheeled out 52 weeks ago

What, investors like Dong Hua Liu. All he has done is buy properties for his own personal gain. Where is the accountability?

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11224055

We are fast becoming the Cyprus of the Sth Pacific. Instead of shady Russian communists we will have the Chinese variety.

Why put your money into a country that's currency is crashing?

Maybe they calculate they can buy cheap on the downward spiral and repatriate their windfall gains when the currency recovers?

You don't, you sell while the trend is falling, which theoretically evens out their balance of trade. But such things won't sustain a fundamentally flawed economy (eg where there are REAL interest or IP payments constantly leaving the country for foreign soils)