Where they stand

Four election candidates explain their party's approach to land sales to foreigners, what they like and what they would change

16th Aug 14, 11:47am by Scott Palmer

Each week from now until the election we will be asking a small group of electorate candidates to explain where they and their parties stand on a specific issue.

This allows them the opportunity to explain and justify their policies, which we have separately listed and compared here.

This week the subject is Foreign Land Sales. (Responses are listed in Party alpha order.)

David Seymour, ACT Party candidate for Epsom

The history of New Zealand could be told as a history of foreign investment. Being at the edge of the planet means that human life here has always featured people from afar bringing their capital and giving the local population more to work with. This would be a very drab place otherwise.

It is worth noting that we are actually one of the most restrictive developed countries when it comes to allowing foreign investment. The Overseas Investment Office already vets significant investments, and this regime places us 49th LEAST open out of 55 countries monitored by the OECD. In fact, only Saudi Arabia, India, Indonesia, China and Japan have regimes more restrictive than ours.

ACT believes that New Zealand should not be afraid of the world, we should be open to it. We should be glad that people want to invest here, if you doubt that imagine what capital flight would do to our standard of living. Closing off foreign investment as our political opponents opportunistically suggest will starve New Zealand of capital, such as the capital that Stevenson Group hope to raise by selling a farm and reinvesting in their core business.

Housing affordability is a concern, but foreign speculation is a symptom rather than a disease. We should ensure that our own housing markets function well, that supply responds to demand. In particular we should ensure that land use regulations to not strangle housing supply, because short supply is a sure way to attract damaging speculation from home and abroad. Affordable housing is a domestic problem for New Zealand, foreign investment is a factor, but a secondary one.

ACT says New Zealand should promote our cultural values and embrace the world, but demonising foreign investment will not achieve either.

Denise Roche. Green Party candidate for Auckland Central

The Greens welcome foreign investment in our country and we also welcome migrants who make our country so culturally diverse.

We simply believe that foreign investment should be directed to other parts of the economy where it will return more for New Zealanders and that homes should be owned by people who have a commitment to living here.

We are concerned that foreign speculation on our housing stock is helping to fuel price increases making them less affordable for ordinary New Zealanders so we would restrict house sales to citizens and permanent residents.

As food prices rise globally, selling off our productive land to foreign owners is not a smart way to run an economy. Profits flow offshore leaving us less able to pay down our huge foreign debt.

The Greens maintain that this failed economic strategy will see overseas investors being encouraged to purchase milk processing plants, farms and land so that they can control the entire value chain.

Restrictions on land sales to foreign companies are common in other countries. The Greens in government will restrict the sale of land to overseas buyers to no more than five hectares. This simple measure would take some of the pressure off rural land prices, making it easier for New Zealand families to buy a farm and more profits will stay in New Zealand.

It doesn’t matter which countries overseas investment companies hail from; when it comes to our productive farmland, we must keep it Kiwi.

Jacinda Adern, Labour Party candidate for Auckland Central

Labour believes it should be the right of New Zealanders and New Zealand residents – not others – to own our land and houses.

We have a positive vision for housing which will see us build 100,000 affordable homes, put first home buyers ahead of speculators with a Capital Gains Tax and restrictions on non-resident buyers, and a National Policy Statement under the RMA that will give Councils strong direction to increase the supply of new housing.

Labour is committed to ensuring that there will be no more overseas land sales unless there is an overriding economic reason why that should happen. Over one million hectares of land has been approved for overseas sale under a National government. That is 16 times the size of Lake Taupo. Losing that land means we lose the economic benefit which comes with owning it.

Kiwis are increasingly unable to by New Zealand land simply because overseas buyers are pushing up the price. That’s not right and it’s why we are moving to align with the rest of the world. Other countries don’t allow foreigners to buy land, there is no reason the opposite should that be the case here. Under Labour’s reform only NZ residents and citizens will be able to buy residential property. In line with Australia’s policy, non-residents and non-citizens will be able to buy property if they build a new home.

Labour has learnt from the mistakes we made when we were last in Government and we will not be selling our land off this time around. We will ensure that New Zealand land remains in New Zealand hands for future generations.

Nikki Kaye, National Party candidate for Auckland Central

National has worked to strike a balance between ensuring New Zealand remains open for business with the rest of the world to support jobs and higher incomes, while also tightening the rules for overseas investment in sensitive land.

Under National, the amount of rural land approved for sale to overseas investors each year is less than half of what it was under Labour.

An overseas buyer must now show they will bring substantial and identifiable benefits to New Zealand - over and above what a New Zealand buyer would bring. In making a final decision, Ministers must look at factors like job creation, additional investment, export increases and environmental improvements.

We need to be wary of calls for an outright ban on foreign investment. Chinese company Haier effectively rescued Fisher and Paykel Appliances in 2009. It is investing millions of dollars, and hiring 80 research and development engineers in Dunedin and Auckland.

We consistently receive advice that the level of foreign home ownership in New Zealand is small, and it has no substantive impact on the market and house prices. A BNZ-REINZ monthly survey of real estate agents in March 2014 estimated that 6.4% of residential sales were to non-residents, based on estate agents’ perception.

Feel free to comment below, but keep all commenting civil and within our commenting guidelines. You can also suggest future issues for debate by candidates.

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11 Comments

by Conservative Thinker | 16th Aug 14, 7:00pm 1408172412

New Zealand's fundamental problem is lack of capital. I wonder if our commentators are aware that Sir Oswald Moseley, leader of the British Union of Fascists, specifically referred to this situation and New Zealand's lack of money at his peace rally in 1939. That gathering remains, as a matter of ancillary interest, the largest political meeting in British history.

Today the problem remains, with matters made much worse by Britain's entry into the EEC in 1973. Again, I wonder if our commentators are aware that New Zealand has never recorded a surplus on the current account since. In other words forty years of spending more than we earn. Isn't this the real reason why we must keep on selling off the family silver?

What is the solution. Well, maybe we just can't afford a first world standard of living. After all, we achieved this previously only by virtue of a confluence of post-war circumstances when we were an offshore farm for Britain. One suspects, that despite the former's many shortcomings, the Chinese will play a much harder game.

One thing to consider is to rebuild our gold reserves. Again, I wonder if our commentators are aware that New Zealand has not a single ounce of official reserves. The worst of basket case economies generally have at least a modest amount. The ultimate purpose of gold is to extinguish debt and our problem is the relentless accumulation of debt via the current account. Needless to say the Greens and the left would prefer national bankruptcy, and the ultimate loss of our sovereignty, to the deployment of gold. Needless to say National and the right would prefer enslavement to US Dollar hegemony and America's "exorbitant privilege" to the deployment of gold. Politicians of all hues twitter on about the economy but all are fundamentally committed to relentless expansion of the state. This will ultimately reduce us (but not them until later) to penury. We need to reverse this. We also need to prepare for Britain's exit from that socialist behemoth the EU and look forward to the opportunities that escape will bring. Think socialism helps young people - well take a look at how the EU is destroying the future for so many. Then we must slash taxes. The Conservatives are on the right path with a flat tax. Again, I wonder if our commentators are aware that income tax was a temporary measure for financing Britain's war against Napolean Bonaparte. Wasn't he exiled to St. Helena before New Zealand even came into existence - so why are politicians so in love with this tax?

by cowboy | 20th Aug 14, 11:02pm 1408532524

income tax was for the repair of london bridge. and yes it was a temporary measure (a poll tax was thought better). It is even said in Wealth of Nations that a mans' income should never be taxed, although that is incredibly shortsight and build on false presumption (that taxing income will reduce interest in working). Income tax, as it stands is very effective (whether as PAYE (progressive tax) or GST (regressive tax)) this is because the taxation only affects the available profits of the target, allowing the target to continue to operate and prosper. Other forms of taxation are not so generous and are often little more than sociopathic techniques of debt slavery

by steven | 21st Aug 14, 7:28am 1408562921

Uh, The last labour government paid down a huge Debt, so claiming we never were in the black makes no sense.

"selling the family silver" this was driven by a few things, not least is right wing dogma, at least in the last round.

Gold, no, pointless, and yes I am aware we have no gold reserves, Id suspect most in here would be aware of that. Gold has long been discussed in here, if only by the speculators. In terms of debt gold is simply useless, we just dont have enough to cover the debt. What we do have is the power to tax. Even more importantly a primary production sector everyone across the world needs, food.

"relentless" no, we are heading back to a surplus as the economy and hence govt tax take recovers. Also the Greens have stated that they intend to run surpluses, so um no.

Forget Britain, you go on about NZ's debt but the UK's is far far worse and it has no natural resources to, um plunder and a masive over-popualtion problem. The EU will I think dis-integrate inside this decade, 2 at most btw.

Slash taxes, no. There is no actual evidence that flat taxes boost an economy, in fact the reverse looks true, the Bush tax cuts are a classic and recent example.

Income tax, well like we follow most of what the UK does we followed with something that worked for a simpler time. Now should this be changed? yes I think there is a good case for a land and CGT tax and a corresponding cut in PAYE and business tax. Though my favourite "cut" would be to make the first few thousands of income tax free, say $5k (or whatever the amount)

regards

by cowboy | 21st Aug 14, 7:45am 1408563937

for all their interest and simplicity, flat taxes that are high enough to run a modern government (even infrastructure alone) would financially cripple the lower income earners.

we don't want to cripple low income earners, we need to manage properly, lead effectively, and see that lifestyle isn't turned to debt slavery and labour harvesting, and find ways that the lower income earners can increase their income effectively. So far the only feasible way I have seen is by reducing cost of production

by steven | 21st Aug 14, 7:30am 1408563007

BTW, I see in the latest Roy Morgan poll that the conservatives are still down at 1% and staying there. About all you can say is its twice ACTS %.

Hardly a game changer.

regards

by Brendon | 18th Aug 14, 1:26pm 1408325160

Thanks Interest.co.nz . This makes it quite clear where most of main parties stand on land sales to foreigners. It would have been better to hear from NZ First rather than Act though given their polling.

by steven | 21st Aug 14, 7:33am 1408563210

Agree, ACT is 0.5% in the polls, NZF looks to be 6% and climbing. The conservatives are 1%, twice ACT, Dunne has a seat and United Future polls as well as ACT if not better.

Good old WP is making Green noises, NZF may yet become the "blue-green" party ppl such as myself would like to see.

regards

by cowboy | 20th Aug 14, 11:06pm 1408532819

Haier rescued F&P? But F&P shifted much of it's operation to Argentina (big mistake, as QC wasn't up to snuff)...and F&P was being pushed out of the market (1) by poor design, (2) by poor follow through, (3) from cheap competition such as ...Haier. (and (4) Compliance and high NZ operating/dollar costs which cripple NZ manufacturing through the country regardless of ownership)

by steven | 21st Aug 14, 7:11am 1408561907

I thought it was Mexico to get to the US market? and yes I think Haier did...they own all of it now I think.

by steven | 21st Aug 14, 7:15am 1408562154

On the world stage a developed country like NZ will never be able to compete as long as energy was cheap. Energy is no longer cheap however.

Interesting point I read a while back on the re-surgence of manufacturing in the US. With Ngas cheap and bunker fuel expensive the US steel makers found that they were competitive on price as the cost to ship chinese steel over the pacific was higher than making US steel. Chinese labour used to be cheap, ditto Indian (clothing, IT) these days we are seeing items made elsewhere as their labour costs have risen.

regards

by cowboy | 21st Aug 14, 7:50pm 1408607433

Thats why the Chinese were looking into solar and renewables. vertical integration.

However even if your factory is cheap it doesn't mean transport is cheap, or store and forward, or documentation (although there is always the chinese/african border scam - sorry you have wrong paperwork, please wait, pay fine/fee to update, thank you very much have nice day - or the failed quality inspection which you know isn't accurate ...but if you want to keep doing business then you just pay the graft - scams so old, even the ancient tales use them as plot points!)

The labour and materials are cheap...but same story, you want good quality then there's a price to pay. However as China is finding out, as people get a little more wealthy, then their expectations rise, and thus the cost of meeting those expectations rise to. That's why the ascetics are notable, not the norm.