New Zealanders need to get realistic about foreign investment if the country's agriculture sector is to maximise Asian export opportunities, ANZ says

New Zealanders need to get realistic about foreign investment if the country's agriculture sector is to maximise Asian export opportunities, ANZ says

By Gareth Vaughan

New Zealanders will have to become realistic about foreign investment and use it to their advantage if the country's agriculture sector is to maximise the burgeoning opportunity to feed Asia's growing middle class population, says the managing director of ANZ commercial & agri banking, Graham Turley.

Turley was speaking to interest.co.nz in a Double Shot interview on today's release by ANZ of a major report entitled Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand. The report says New Zealand could capture an additional NZ$500 billion to NZ$1.3 trillion worth of income from agriculture exports between now and 2050. However, if this is to be achieved a range of barriers including capital constraints - with an estimated NZ$210 billion needed to drive growth and profitability and NZ$130 billion for farm turnover - skill shortages, land-use conflicts and inefficient water markets, unfocused research and development, rising supply chain costs and market access limitations, need to be overcome.

"A lot of the things that have been talked about in this report are actually happening already," Turley said. "The question is do we need to speed it up? There is a bit of a race here. We’re not the only country in the world that produces our products and we’re actually quite small and everybody else is looking at the same market. So if we want to get to that high brand out there we need to get in quick."

The report, outlined by ANZ Banking Group CEO Mike Smith in a speech in Auckland last month, was commissioned by ANZ and done by Port Jackson Partners, a Sydney-based consulting firm founded in 1991 by two former McKinsey & Company directors. Under Smith, a former HSBC executive who took the reins at ANZ in October 2007, ANZ is pursuing what it calls a "super-regional strategy" targeting growth in Asia.

Turley argues that to achieve the sort of agricultural export growth suggested by the report, New Zealanders will need to change their attitudes about foreign investment.

"We’ve got to become realistic about foreign investment," he said.

"At the end of the day New Zealand has been built on foreign investment. There’s a lot going on now, there’s a lot that has been going on for a while. And it has been very constructive and beneficial and positive to New Zealand. I think foreign investment is a good thing. We’re going to need some to catch this prize. The key issue about it is to actually understand foreign capital and to use it to our benefit," added Turley.

'Reverse it'

For New Zealanders a key thing was to use foreign investment the "reverse way around" and use it to help get access to markets and contracts for products.

"Part of what some of these offshore investors are looking for is supply rather than ownership. So for a contract or supply, they may put some sort of equity component in. It’s hybrid type things . I think there’s a lot of creativity out there that may come through," said Turley.

The report itself notes it'll be critical to align public sentiment with the investment required to boost growth and employment.

The opportunity outlined in the report, part of an ANZ insight series, comes from the world's changing demographics, and the changing economic power base in Asia, said Turley.

"And Asia is China, it’s India, it’s Indonesia. All those nations."

"What we’re seeing there, and it has been well documented, is a lot of urbanisation, and a growing middle class. With that it has been proven and we’ve seen, as people move up the income scale, they consume more protein and they consume more fats and so forth which is what New Zealand produces a lot of," said Turley.

"What this report has done is look at the market place and look at the consumer needs and demands, particularly in Asia, and said if we multiply that back into how much product we need, and where that product is going to come from, that creates a huge opportunity for New Zealand because we produce a lot of protein and a lot of fats through dairy products, meat products, and other horticultural and agricultural products."

"So it’s really working backwards from saying 'we think the demographic opportunity is in the markets close to us and that are growing fast.' And turning that into saying 'hey, this is what we could do, and also looking at what is productive capacity in New Zealand if we invest in more irrigation, new science and technology."

'We think the future's good for agriculture'

Although the New Zealand dairy sector features prominently in the report, Turley maintains opportunity exists for the whole agriculture sector, including red meat, wine and kiwifruit.

"The reason ANZ has commissioned this report is we actually think the agricultural sector in New Zealand and Australia is a great opportunity and we think the future’s looking good for it. We’re a big player in it, the biggest (bank) in New Zealand, a large player in it in Australia in the agricultural scene, so we’re committed to it," Turley said.

"This is about us saying 'how can we facilitate and use ourselves to help New Zealand win this prize'."

The report suggests both New Zealand and Australia have the land, the water, the skills and proximity to benefit from huge middle class populations emerging in Asia with sophisticated tastes and rising incomes. It notes water and land are getting more scarce globally, whilst a shift to a supply constrained agricultural market will create enormous commercial opportunities for resource-rich, export-orientated countries in a world where the population is forecast to rise by about 2.3 billion to 9.3 billion by 2050.

Port Jackson Partners cites an Organisation for Economic Co-operation and Development report that suggests China could see 75% of its population reach middle class by 2030, with China and India contributing to nearly 40% of global middle class consumption by 2030, rising to almost 54% by 2050.

"Overall the Asian continent could account for as much as 70% of global middle class consumption by 2050. This is a staggering change as Asia currently only makes up about a quarter of global middle class consumption, of which less than a third comes from China and India," Port Jackson Partners say.

A 125% rise in the real value of annual agricultural exports

Adopting estimates by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), which is a research bureau within the Australian Department of Agriculture, Fisheries and Forestry, as a conservative guide for its base case scenario, the report says both Australia and New Zealand stand to more than double - increase by 125% - the real value of annual agricultural exports by 2050 from 2011. This equates to a 2050 export value of A$73 billion for Australia and NZ$57 billion for New Zealand, or a cumulative addition over 2011 levels of around A$710 billion and NZ$550 billion.

Under Port Jackson Partners' high case scenario, the production of high value products would see export revenues grow to meet its "rapid convergence scenario" driven by increased daily calorie intake in the likes of India, strong growth in biofuel demand and population growth of around 1% per annum. The report says this would lead to real 2050 export values 250% higher than in 2011, or NZ$88 billion for New Zealand in 2011 prices.

"The cumulative value of additional export revenue would be A$1.7 trillion for Australia and NZ$1.3 trillion for New Zealand."

In terms of developing high value products, Turley suggested this involved taking more time to understanding consumer preferences and tastes.

"How they want to eat and consume things, how they want it presented to them. Because each of these countries of opportunity - China, parts of China, Indonesia, India, do things differently," said Turley.

"Definitely there’s a lot of opportunity for us to upscale the value of the products. Part of this report is about plonking it together and saying 'hey, what’s the 25 year opportunity here? Hopefully this makes people think this is a big opportunity, we need to take it seriously, and look at the long game rather than just the little short games."

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49 Comments

Maybe I didn't read it well enough, but in short...we need to sell more land and farms to foreign investors, so we can sell more agriculture products to the Chinese and then send more profits overseas?
So says a report commissioned by a Ossie owned bank and written by a Ossie owned firm.
Am I missing something here?
I do understand that investment is needed to increase output, just not sure this is the most sensible way.

Why is it they never mention business profitability? Is that not important to these people?
 
In short, no.  As long as you can service the debt and pay creditors (so that you can continue to service the debt) then they don't care.

Listen to the interview. He does mention business profitability, more than once if I recall correctly.

"It notes water and land are getting more scarce globally"
Land is not getting more scarce (quality of water maybe) - there is the same amount of land now as there was when the earth was created.
 
It is the money system/capitalism/ownership model that creates the illusion of scarcity.

I think of it as a relative thing, more good land is scarce to feed more ppl.  So rather tham m2 is m2/person.
but thats OK, we cant feed this many without Ngas and oil, ergo there should be a lot of good land free inside 50 years.....if its isnt irradiated by say Pakistan throwing nukes about as the state dies.
Its going to be dodgy IMHO.
regards
 

Memo to all: mindless drive-by smears that don't debate the issues raised are likely to be deleted. It is a serious issue raised by our biggest bank. It needs genuine debate. No one is saying you have to agree. But show you have read the story and make a comment that can be seen as a contribution to debate.

Maybe I missed something you deleted, DC, but the above look fair enough.
 
Craig certainly nails it. Same argument was back in the heady '80's, where folk were urged to sell their business premises, rent, and play the sharemarket with the proceeds. Heck, I remember a speech (to Fed Farmers, I seem to remember it being from the Chair, but maybe wrong in that) back then urging farmers to forget sheeping, and to get into the sharemarket too.....
 
This is the same message:  sell what you have, and somehow you'll miraculously sell more of what you will no longer own. Please remember that banks are out to maximise their shareholders returns, no more no less, and that some of us will keep that thought in mind when filtering anything they offer.
 
 

To be fair to the ANZ guys , they're running a business , not a government department ..... so , getting customers , and keeping them happy is the name of the game .... the occassional slip into advertorial mode here is to be expected .......
 
...... pollies do it too , David Cunliffe was Bernard's best buddy prior to the 2008 election , making frequent guest appearances here .....
 
Good man , that Cunny !

My "drive by smear" was deleted as well.
I do like this post of yours though mist42nz.  Mine was shorter.  Yours covers the ground in a way that challenges Chaston
 
PS.  To Interest.co.nz.  Have any of you tried looking at the site on a smartphone?
 
And have any of you tried to go to a comment in the comment stream? Seems to land about 4 or 5 comments above the comment you want.
 
And as for the wrap around ad.... hehehe.  You are wasting your and my band width. As if I'm going to look at any wrap around ads on a smart phone.
 
Though if you continue to serve up the wrap around ad, could you stick up an Aussie focussed ad?  You must be able to see that I'm using an AU ip address. Seeing as I'm accessing the site from Aussie at the moment, I'm sure your NZ advertisers wouldn't want to waste their impressions on non-NZ audience. but the Aussie advertisers might want to try to capture some of the NZ expatriates.. There are a few of us on here. MIA is a prime example.
 
Unfortunately, my expectations are low. I'm aware that you are a NZ based company.  So I'm not expecting you to rise to the smartphone challenge or the geographically oriented ads for another 5 years or so.... ....

"Please remember that banks are out to maximise their shareholders returns."
 
What? Surely not? There was I thinking banks are here to maximise senior management returns by control fraud. Silly me, can't think where I got that idea from.

So if we want to get to that high brand out there we need to get in quick (sic)."
 
David, this is meaningless drivel - we have been needing to get in quickly since the UK dropped us and the EU formed. Our masters and banks have had decades to address this problem. They chose the quick buck approach - the high value of land capitalisation is now beyond it's productive capacity in terms of return on investment needs. Not much to say really to that other than get it back to profitable levels - a cogent workaround for this dilemma would attract a more positive response.  Dreaming just doesn't cut it.

Excellent comments by ctnz, mist42nz and PDK. The banks work for no-one but themselves, their currency is debt and they are here to peddle it. You would have thought Mr Chaston would have realised that from the events in the Northern hemisphere these past 5 years. Clearly he labours under the illusion that their Southern hemisphere brethren are somehow different. They are not - they just haven't been caught out yet.

Look at athe dairy farms for sale
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sear...
 
then sheep and beef
 
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sear...
 
The banks need foreign ionvestment to help dig them out of the hole they ahve found themselves in. Look at the marginal land on the market
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sear...

What are you going to do about the real probelms facing us, look at how our GDP compares per head
 
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
 
http://en.wikipedia.org/wiki/Economy_of_New_Zealand
 
 
The New Zealand economy has recently been perceived as successful. However, the generally positive outlook includes some challenges. New Zealand income levels, which used to be above much of Western Europe prior to the deep crisis of the 1970s, have never recovered in relative terms. The New Zealand GDP per capita is for instance less than that of Spain and about 60% that of the United States. Income inequality has increased greatly, implying that significant portions of the population have quite modest incomes. Further, New Zealand has a very large current account deficit of 8–9% of GDP. Despite this, its public debt stands at 33.7% (2011 est.)[21] of the total GDP, which is small compared to many developed nations. However, between 1984 and 2006, net foreign debt increased 11-fold, to NZ$182 billion, NZ$45,000 for each person.[9]
The combination of a modest public debt and a large net foreign debt reflects that most of the net foreign debt is held by the private sector. At 31 December 2011, gross foreign debt was NZ$257 billion, or 125.8% of GDP.[22] At 31 December 2011, net international debt was $147 billion or 80% of GDP.[23]
New Zealand's persistent current account deficits have two main causes. The first is that earnings from agricultural exports and tourism have failed to cover the imports of advanced manufactured goods and other imports (such as imported fuels) required to sustain the New Zealand economy. Secondly, there has been an investment income imbalance or net outflow for debt-servicing of external loans. The proportion of the current account deficit that is attributable to the investment income imbalance (a net outflow to the Australian-owned banking sector) grew from one third in 1997 to roughly 70% in 2008.[24]

Speaking of imported fuels - did you see this Andrewj;
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10841322
 
I wonder whether this government could get any worse - and it's a very scary thought - as they seem to be quite accomplished at making all the wrong decisions.
 

Yes that's a must read. Lot's of issues covered but the unspoken theme is that the magic pill of "growth" will save us.
 
Even if the biofuel industry is a goer the time frame and huge increase in indebtedness has you gasping. No mention of the energy inputs though. Cutting down forests, transporting the biomass to the industrial plants, even if using geothermal, aint energy free. Then there's the energy used to distribute the finished product nationwide. The whole exercise could very likely be marginal. Toss in a declining economy - for all the reasons daily canvassed on interest.co - and the looming global liquid fuel crisis, and the country's on its knees, just as the Gisborne line is mothballed for a trifling expenditure. Rail today is seen as a liability - but certainly not in this scenario.
 
Iran anyone? Isn't that on anyone's radar these days? It's reported  they are planning a major oil spill in the Straits of Hormuz to spite us all.
 
 

Seems that private industry the oh so perfect mechanism for uh lots of things  is now finding its best course of action is to blackmail Govns for subsidies to uh make it profitable.
Kind of the theme Ive seen writen for some years, its expected that Govn's will have to step in and take an ever increasing role in keeping the country afloat.
Rail is one of the least diesel use per tonne moved of goods, only shipping beats it. The problem for us is NZ is so small....
We are going to see a lot of "iteration" as we ride the slide down to less energy...
regards
 
 

More folly from JK and co.
 
http://www.stuff.co.nz/dominion-post/comment/5194393/Cuts-to-DOC-will-be-costly
 
http://www.stuff.co.nz/national/blogs/in-our-nature/7807524/Endangered-rangers
 
Hollow it out such that it can no longer be effective in either its operational nor its advocacy role.  With respect to the latter - it's just another example of the removal of one of the checks on executive power, of which we have few in our system of governance.
 

What would be exciting about this biofuel prospect for NZ would be if the refining process was made/designed to be scaleable and/or transportable - such that processing of our future energy requirements could happen locally.  I understand this was for example the way houses were built in the very early days - the sawmill was constructed at/on the site where the house was to be built.  I assume the same used to be the case with milk processing as well.  Centralisation of processing is a relatively new thing - based on cheap energy for transport.  Cheap energy is a thing of the past.

Ouch. I was inside the biofuel business for a little while, including a tour of the solid energy backed plant in CHCH. But I got told by a farmer that Solid Fuel were paying a subsidy to farmers to grow rapeseed. The trouble being for those farmers is if they ever want to change back to pasture. You see rapeseed is a noxious weed, the seed is coated in oil that preserves it in the ground for decades until it gets a chance to germinate.
 

Problem is the bio-fuel industry like many others assumed that the price rises for fuel would be continious and fuel their profits.  Few foresaw that actually high fuel prices triggered recessions and in fact ppl cant afford the fuel at the price the bio-fuel brigade need (or think they deserve).  Not as ppl use it now anyway.  Huge difference between me on 1 tank a month at $85 v others spending that and more per week (ppl tell me they use 1 to 1.5 tanks a week...ouch!).....and watching petrol rise and rise....at $4 Im spending $170 a month, affordable/doable....others will be spending $700+ odd a month, thats not doable something will have to give, house prices come to mind...meanwhile hugey thinks driving on from the fringe is "economic"
ho hum.
regards

Here we bloody go again, yet another fudging of the meanings of the words "investment" and "ownership". I suggest this foreign bank go take a flying leap. Sorry bud, but the general drift is that you DO NOT sell your means of making a crust just so that the likes of you can profit more.
 

well said
regards

Oddly enough , this story is airing on ABC radio here in Australia today , too .... and they're complaining of the skills shortage in Australian agriculture ...
 
..... but given how important agriculture is to the NZ economy , it's baffling how few companies in this industry are listed on the NZX ...
 
And the few that have public listing , have had a very checkered history for their shareholders ( Allied Farmers / Wrightsons / ...... ) ........ if the profits don't flow , and companies with transparency don't list on the NZX  , then Kiwi savings will go elsewhere ....

A lot of the skilled farmers used to come up through the ranks, the price of land prohibits that option so they become real estate agents and rural bank managers instead, the not so smart go into politics. The high price of land hinders new ideas and turns farmers into capital managers.  
 If you want inovation, collapse the price of land, it would make ANZ inovative as well.

There are several reasons for that GBH, both in NZ and AU. One is simple, the other is complex.
 
The simple reason is domestic local investors who invest in "agriculture" want a return on their investment, whereas the large overseas investors are seeking security of food supplies and the pricing structures of the two are different. The foreign investor seeking food supply security isnt interested in a financial profit on their investment, and the imperatives driving that investment enable them to out-price the local profit-driven investor.
 
The more complex reason would take a lot longer to articulate, and might be a story for another day. If you go back and re-examine that interview with Bryan Gaynor you will see part of the answer. 

agree....all the NZx does is provide a paddling pool and a free entry to the sharks to feed when and where they want.
regards

The banks could do a better job in articulating how New Zealand really benefits from extra billions in foreign investment in agriculture. It is very possible that we do benefit; but it is not at all clear from the article or the interview how, other than exports would go up, assuming it was productive investment, and not just transfer of ownership of existing production. If exports go up; but all the ownership of the profits of those extra exports goes to the foreign investor, then it is not obvious to me that we do get any advantage. Would there at least be significant extra employment? Maybe, but really only if we get into value add it seems to me. For joint ventures I can see that a part share of a bigger whole may work; but some examples, with the maths attached, would help.
Debt funding or supply deals where we do keep the equity certainly can work; although just adding debt to existing production seems likely to add stress to already highly indebted farms.
At a macro economic level, I also would like the banks to confirm their views on the impact of foreign investment as follows, given our current Reserve Bank paradigm:
Extra foreign investment reduces NZ ownership; (but maybe lifts the size of the pie); it also lifts the exchange rate to buy the NZD to make the investment; that lifting of the exchange rate stresses other exporters, manufacturers and import substituters, while encouraging consumption of foregn toys and services; that high exchange rate guarantees a continued high current account; which correlates with even higher debt and loss of ownership needing further foreign funds. 
The banks seem to stay silent on the high current account; and why keeping it so high is somehow good for NZ (so I suspect doing so is not).
Which leads me to believe that as a minimum we should be aiming at a neutral Net international Investment Position going forwards. Mostly the governments and RB's problem I accept; but I can't help feeling the commercial banks resist that solution, purely because they make less money.
David, I hope that's on subject; although sorry its not lapping up the ANZ's money.

What exactly is the "advantage" that "we" get if the ownership of profits from a business in New Zealand goes to a New Zealander, but we don't get if the ownership of those same profits goes to a foreigner?  

If the profits stay in New Zealand that would be fine and hopefully gainfully re-employed. But if the profits are bank finance charges, import inputs, etc and have to be repatriated to the foreign lender/supplier we should be indifferent to ownership.
 
It is doubtful there are many profits on the horizon for foreign or local farmers - the current high level of service costs of production see to that. - all vendors shopkeepers, bankers, fert salesmen etc believe they are the source of wealth and wish to claim it's ownership or a sizeable rent as it passes by - Goldman are the masters of this party trick.

MIST: "If profits go to a NZer, then they are more likely to be spent in NZ"
 
You can also say, profits earned in NZ, and kept in NZ, will pay NZ tax in NZ

Ha
what profits
define profits
transfer pricing
quite some years ago there were some cases against the petrol companies using bases domiciled in bermuda, dealing with transfer pricing, more recently there have been the cases of the banks using jiggery-pokery to shift profits tax-free to australia, nuff said

you must have been asleep for the past week there ripvanwinkle, there have been articles about Starbucks, Google, Apple, General Electric, now Facebook, and you can probably add MacDonalds

mist,
Well covered, thanks.
There are likely to also be tax benefits to NZ; with NZ profits paying NZ taxes in NZ, where foreigners avoid such taxes altogether, or minimise them through transfer pricing. NZers may also be more likely to encourage added value here; where foreigners just may want the raw material supply, where they add all the value offshore. 
Over time NZ based profits are also likely to be resinvested in NZ, with hopefully a virtuous circle occurring. 
A particular interest of mine is the effect of net inwards foreign investment on the exchange rate; and current account deficit. That seems to be a vicious cycle.
Having said all that, my post was open to the idea that certain foreign investment can be very positive for NZ. If the banks wish us to be a little more enthusiastic about it, they need to make the case a little better with more detail to see through these objections.
I do understand that any individual asset owner, on deciding to sell, will want the highest price, and that will likely be foreign under the currenct circumstances; short of RB or government action. But following that route does inevitably doom us to be wage slaves, it seems to me.

How come it's good when a New Zealander uses money to employ New Zealanders and buy things from them, but not when a foreigner does it?  What difference does it make to the New Zealanders who gain employment, or make the sale?
Why would a New Zealander not spend the money overseas anyway?  If there are profitable opportunities there, why would you not want him to?
 
 

The report itself notes it'll be critical to align public sentiment with the investment required to boost growth and employment.
.............................
they have noticed a large backlash against land sales to foriegn entites and it gets in the way of business.

Population, Migration, and Globalization

Herman Daly

Global economic integration and growth, far from bringing a halt to population growth, will be the means by which the consequences of overpopulation in the third world are generalized to the globe as a whole. They will be the means whereby the practice of constraining births in some countries will be eliminated by a demographic version of the "race to the bottom," rather than spread by demonstration of its benefits.
------------------
If you can't move your people over there why not just buy the land.
?
 

 

Hugfh Fletcher Nine to Noon
http://www.radionz.co.nz/national/programmes/ninetonoon/audio/2536043/feature-guest-hugh-fletcher.asx
“the only foreign investment we should be allowing is investment in new productive capacity”.

Listened to it live this morning. Definately recommend it as well. Some great insights on how Fletchers handled various crisises over the years.

Yes.
regards

jh,
Fascinating and gratifying that someone else with some status is challenging the current status quo. It reassures me that what I've been banging on about for a while has some friends, and is not "Billy no mates". Agreed with nearly everything he said. Am intrigued that he was a director of the Reserve Bank until now; doesn't seem given his opinions that he achieved much- presumably Bollard and the bureaucrats had all the power.
Am taking the liberty of reposting a reply from earlier in the week, that quickly got lost, but seems relevant to this.
The following Reserve Bank link explains a lot.
http://media.nzherald.co.nz/webcontent/document/pdf/201242/RBNZ.pdf
The link was published in the Herald this morning. Like many economics papers, it can be a hard read; but following is a quick summary:
The Reserve Bank has a concept of a Desired Current Account, which they define as that deficit that can just probably be financed over time. That is like running your house with a mortgage that you keep at a maximum, and if your income should go up a little bit, you make sure you borrow and blow even more to keep the mortgage at the maximum. The current maximum is 83% apparently, and that is more or less where they would like to keep it. No thought at all of paying any of it off. In fact doing so would be a bad thing indeed.
They don't really know what sustainable is, so they guess that our current debt level is sustainable and use that as a base. Simplistically they then compute that a current account deficit of 3.8% a year is "Desired". Even at this level they believe the exchange rate is currently overvalued- so we are currently Greece like in having a current account that we have no chance of ever paying back, if it were to persist for any time at all.
2008, our best recent year by far in current account terms at only -2% ; was considered a very bad result. We are aiming at -3.8% remember.
They guess at elasticities that would fix the problem; back to their -3.8%.
No wonder Bollard's regime was useless. Who authorised us to run our national accounts this way? Was there ever a vote? Did a political party ever say "We want to have the biggest national mortgage possible, even though doing so means we will kneecap our productive industries, and own very little, but enjoy the good life in the short term?
It's successfully got my heart rate up in some anger. Better lay off the caffeine for an hour or two.

Can someone explain to me why foreign investors can come in here and get a better return than a NZer thinks its worth?
Because to pay more they must get more back or they are prepared to take less revenue, or there is a margin thats available to them and not NZers..
Say our tax system is screwed, or something....if its the tax system or something under control of a NZ govn then our Govn needs to fix it, or we should sack them.
The thing I have about ANZ as with any vested interest they line their pockets with a % cut, the bigger the sale the bigger the $s lining their pockets therefore anything they say has to be carefully examined for correctness.
regards
 

In some cases yes, sure.  If NZers cant get the loans what the hell is going on?  I mean our big 4 banks are not exactly tiny in terms of sourcing overseas money....or maybe they prefer to lend to housing as its "safe" so shy away from business capital.
:/
Pity we cant see some real and true info on whats going on...
regards

Hey Graham, what happens to those opportunities and your fancy graphs when all farms go organic due to fertilizer and deisel costing too much if not scarce?
Their output will be, what 40%? of what it is now? big hit on your return eh?
and the airlines and hence air freight goes bye bye?
So you wont be shipping short term perishable goods to say japan inside 2 days, more like 3 weeks....oops....smaller domestic cash markets then.
Interesting how you project 25 years but basically assume business as usual ie expotential growth continuing....
wrong sunshine......
regards
 
 
 
 

Trolling through the 1959 copies of the Financial Times ( as one does ) I found a very interesting article by Harold Wincott in the April 28'th edition : " Capitalists , go home ! "
 
.... it appears that the House of Commons was debating the merits , or otherwise , of American investment in British industry .... Harold Wilson , an advocate of the continued nationalisation of British industries by the government , argued for caution , at allowing " the control of an important British firm by alien ownership . "
 
Wincott argues " Any country really ought to be thankful for the capital and technical know-how immigrant capital brings . ...... . The free movement of capital is too important in the common interest to allow either vested interests or the yearning of the Socialists for complete State-ownership of our industry to stop it happening . "
 
.... 1959 ! ... the years roll by , the former protaganists are dead and forgotten , but the battles we fight are very much the same today ....

Just a couple of years before the population growth turned negative for the first time in human history.

So what's your point GBH?
You  are comparing Britain in 1959 with NZ in 2012 and suggesting foriegn investment could bring a burgeoning of production by capital, technology and know how?
That is the claim of this article. The cost (it is cliamed) is that we are too squeamish about "foriegn" investment (ownership) of land but this is what is needed as the catalyst.
The argument is framed from a national perspective yet is a call for (more) globalisation. As the man from Harcourts Shanghai put it:
“Chinese economy we all know about…
Chinese government says it’s time to grow offshore…..
Let’s take a good selection of New Zealands “products” over….
“We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country….
but hey!…. young people coming through see it as “our planet” rather than “our country”
http://static.radionz.net.nz/assets/audio_item/0011/2385074/mnr-20100824-0842-More_than_800-million_dollars_worth_of_property_on_display-m048.asx
Globaisation ignores nation bounderies and the social contracts formed in those nations. As Herman Daly points out, taken to it's extreme it just isn't practical or desireable. Globalisation is not about all ships rising it is about by passing local interests so your king rat in China can buy the lovely bit of headland in NZ while wages are generalised outwards and downwards in accordance with the populations growth rate to reach it's exponential limits.
As Daly says instead of a country maintaing the right to keep it's population low it looses that ability under globalisation. When foriegn entites are allowed to buy land they (essentially) ship it off to China rather than ship their populations over here.
 

"Why not put all of New Zealand up for auction" Exactly!
Have any of these bozos asked themselves the fundamental question - why should a developed country need to import capital? Talent, technology and skills that we don't have can be bought, but capital? OK for us when we were undeveloped but to further indebt ouselves or sell quality assets overseas is economic suicide. What we need to do is use the surpluses from our farms, businesses and households to invest in developing further productive assets. The  problem is there is effectively no worthwhile surplus (capital) - it's been bled away in interest payments and profits to foreign business owners - thanks to following the advise of these geniuses for decades now. 
We already have the second or third worst net international investment position in the developed world. When is enough enough? When our current account is 10% of GDP - that's a huge chunk of our wealth flowing to our foreign owners. Carry on down this road and we are completely stuffed with Zero chance of recovery.

I would only allow foriegn direct investment if it created something NEW...
Hugh Flether makes a really good point in an interview. ( he makes a few good points)
He says that an income stream , from a NZ Company, is worth more to a foriegn company, simply because of Tax laws..
ie. A foriegn company can pay MORE ( to buy a business/investment) ,for the same returns, than a NZ company.
Hugh Flether... having lived thru the  economic changes of the last 40 yrs...is really worth listening too.
AND..... rather than being complex....what he says makes simple common sense
http://www.radionz.co.nz/national/programmes/ninetonoon/audio/2536043/feature-guest-hugh-fletcher

Thanks for the link, Roelof. Excellent points from a wise and concerned Kiwi.

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