By Alex Tarrant
If a foreign purchaser of New Zealand land is going to live here and not "bugger off" back overseas, then the Labour Party is not opposed to the sale, the party's finance spokesman David Parker says.
But absentee owners, who transfer future revenue streams offshore without bringing any extra output, do not bring enough economic benefits to New Zealand for the party to support sales such as the recent Overseas Investment Office ruling to allow Chinese company's Shanghai Pengxin's application to buy the 16 Crafar Farms.
Parker's comments come after the Overseas Investment Office released rulings that Canadian born film director James Cameron be allowed to purchase two farms in the Wairarapa. The OIO says in its decision summaries that Cameron and his family "intend to reside indefinitely in New Zealand and are acquiring the property to reside on and operate as a working farm".
Labour strongly opposed Shanghai Pengxin's ability to buy the Crafar farms, for an estimated NZ$210 million, over a NZ$171.5 million bid from a New Zealand consortium led by investment banker Michael Fay.
Prime Minister John Key has defended the process taken by government Ministers to approve the Overseas Investment Office's recommendation approving the sale, saying Ministers could not have legally refused Pengxin's application.
OK if they don't bugger off
Parker told interest.co.nz Labour opposed sales of farmland to foreigners who would be absentee owners.
“If they’re an absentee investor, we’re opposed. If they’re going to live in it – because they’re coming here to live – that’s fine. We’ve always drawn that line. It’s not nation specific,” Parker said.
“It’s effectively their home – they’ll pay taxes in New Zealand no doubt, GST," he said.
“But you also have to be aware that if someone can pretend to be a resident, by coming for a month or two, and then buy land and bugger off again, and forever be a foreign investor, we wouldn’t treat that as legitimate."
A foreign purchaser of New Zealand land should "live a big part of their life in New Zealand".
“But if they’re absentee owners, no, we don’t see enough upside to New Zealand. The disadvantages outweigh the advantages,” Parker said.
“Other than the money they [absentee owners] bring, they don’t bring extra output. It’s not like they’re bringing intellectual property or some manufacturing capability that we don’t have. All we’re doing is transferring a future revenue streams for what we already do well to an overseas buyer,” he said.
Investments made by companies like Shanghai Pengxin, which will spend NZ$14 million upgrading the 16 Crafar Farms it has been allowed to purchase, would be no more so than investments made over time by other owners.
“Those farms won’t end up better than our best farms," Parker said, adding better farmers often replaced poor ones that went broke.
Parker did not agree with the proposition that in New Zealand there currently wasn’t enough money for investment in farms.
“The price of the farm might be different from an overseas purchaser, but the output won’t be different. I’ve never heard it suggested that the farm output of New Zealand is going to be materially better with foreign ownership of our farms," he said.