Winston's “There’s a Hole in Our Bucket!” Speech
An address by Rt Hon Winston Peters to Breakfast Club, AUT Conference Facilities, Wellesley Street, Auckland at 0715, 25th August 2004
“There’s a Hole in Our Bucket!”
Thank you for your invitation to speak to the “Breakfast Club”.
Your letterhead describes this body as a “delicious mix of youthful enthusiasm and business experience”.
And I see that you even have a mission statement:
“To create a positive, interactive environment between the business community and AUT business students.”
Things have certainly changed since I was a student at Auckland University.
My main contact with the business community was working as a labourer on the Mangere Bridge and I was a union delegate on the site.
It was a rewarding experience.
Apart from helping finance my living costs, it gave me a valuable insight into the dynamics of a group of individuals who shared a common loathing of their foreign employer.
This proved invaluable to me later in life as a member of the National Party!
As you are interested in business matters I thought I would talk about the apparent success that New Zealand businesses are supposed to be enjoying at the moment.
At the outset let me make our position clear.
New Zealand First is a pro-business party with a responsible social face.
We believe that investment and hard work should be rewarded with profit and that profit should benefit all those who helped create it.
We are told just about every day by the media that the New Zealand economy is booming.
That’s why the Reserve Bank is applying the brakes by way of steadily increasing interest rates.
Take our wine industry as an example, a brilliant success, a great commercial winner – or is it?
The gloss rather goes off the wine industry when we realise that foreign interests now own around 85 percent of New Zealand’s wine production.
The industry is a bonanza but who is benefiting?
With so many prime assets in foreign ownership much of New Zealand’s wealth never touches the sides of our bucket – so to speak.
A grotesque proportion of the wealth that that is being generated in this country goes overseas.
We have a chronic and deepening balance of payments deficit.
The loss through what used to be called invisible exports - is immense.
Even Stock Exchange head Mark Weldon has warned of New Zealand becoming a “call centre at the bottom of the world”.
He is well placed to issue that warning because about 50 percent of the share market is overseas owned.
Foreign direct investment in New Zealand now exceeds $50 billion.
And most of that is by way of straight takeover.
Most of the so-called ‘investment in New Zealand’ is just buying existing assets not creating new capital or infrastructure.
You do not need a PhD in economics to see that taking money out of the economy on the scale that is now happening will impoverish New Zealand.
Selling the family silver has never been a way to build the family fortune.
It is a road to impoverishment.
But what is the political system of New Zealand doing?
Despite this alarming trend the Government is relaxing the already weak controls over foreign ownership even further!
The Government recently announced its intention to scrap the Overseas Investment Commission.
But that hardly matters as this toothless poodle has only served to rubber stamp foreign acquisition anyway.
The so called screening process triggered when 25% or more of a “non-land business asset” is being sold overseas now only kicks in when the company’s assets are worth more than $100million – up from the previous limit of $50million.
And just five years ago that threshold was $10million!
To camouflage its capitulation on foreign ownership of business assets, the Government claims it is tightening up on land sales to foreigners on so-called “iconic” land.
So its OK for foreigners to be gobbling up vast tracts of New Zealand land but every now and then there will be a token gesture of declining some land purchase. The situation in relation to foreign ownership in New Zealand is dire – and goes largely unnoticed because far too many commentators don’t know the difference between sound investment and foreign takeover.
For example, as a maritime nation, it is alarming that none of our exports or imports is shipped in a New Zealand owned vessel.
An Aussie company – Toll Holdings snapped up our run down railways for a song, after they had been thoroughly pillaged by Tranzrail’s expatriate owners.
Stagecoach buses are Scottish owned. Why can’t we run our own buses?
Apart from Kiwibank and TSB the banking system is effectively overseas controlled.
The result is a massive annual drain in terms of profits and dividends and other payments to overseas owners.
Many of our iconic companies are now held by overseas companies:
Harvard University owns the Central North Island Forests
Carter Holt Harvey – is US owned
The Aussies own 75% of the NZ Sugar Company
The New Zealand Herald is Irish owned
The Aussies own the Sunday Star Times
Vodafone – British
Telecom – large overseas share holding (and another $750 million just announced in profits)
Oil companies –overseas owned
Insurance companies – mostly foreign owned
Energy companies such as Contact Energy, Natural Gas Corp, TransAlta and now Powerco have major overseas holdings or are overseas controlled.
When the sale of the New Plymouth City Council’s stake in Powerco was announced the Mayor Peter Tenant described it as a “win-win” deal.
Those word may come back to haunt him.
Most New Zealanders will find his enthusiasm for the loss of yet another strategic infrastructure asset to foreign ownership out of place.
There may be a short term windfall for New Plymouth. This was a prime, high-yielding asset, and only time will tell if selling the asset was really a shortsighted financial move.
What is certain is that Australia’s Prime Infrastructure Trust will have done its homework – they smell a bargain!
And who could blame them – they are buying a key utility in a monopolistic position.
The expression ‘licence to print money’ has been used to describe such businesses.
So most Kiwis will not be sharing Peter Tennant’s joy – they will be reflecting on the progressive impoverishment of New Zealand as more prime and profitable assets fall to foreign ownership. The fact is that our best assets have gone and we in New Zealand First say that it is time to ask where this is leading and what can be done.
The outcome of present policy on foreign ownership is obvious – New Zealand is a branch economy, a colony of other financial centres.
The paradox is that Labour, which talks a great deal about national identity has a totally cavalier attitude to foreign ownership.
Labour is besotted with the word globalisation.
And National is falling over itself to outbid it on the globalisation agenda.
They are fully supportive of the foreign takeover of New Zealand and would do everything in their power to expedite the process.
They and their big business partners are fully paid up members of the “more foreign money the better” school of thinking.
The benefits of foreign investment are like the benefits of immigration –very much in the eye of the beholder.
When you look beneath the surface, all the promised bonanza of jobs, skills, technology transfer and other goodies vanishes like snowflakes on a wet road.
New Zealand First is not against foreign investment – any more than New Zealand First is against immigration.
But our criteria is straightforward.
We say New Zealand is not a doormat – we should pick and choose.
Foreign investment, like immigration, should be on our terms.
Foreign investment should bring genuine benefits to New Zealand.
Foreign investors need not panic – we are not about to embark on some type of confiscation – but we are intent on seeing New Zealand’s wealth accrue to the people who create it – New Zealanders.
We in New Zealand First want an effective Foreign Investment Commission – with real teeth and a mandate to protect and enhance New Zealand’s national interests.
That agency will carefully scrutinise the takeover of New Zealand’s strategic assets.
The foreign takeover of our country has gone too far already.
We won’t accept being the lowly paid servants of overseas masters.
If globalisation means foreign ownership and control, we in New Zealand First don’t want it.
New Zealanders finally wake up, nor will