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Landcorp Should Be Included In Govt Asset Sales Program

Robin Grieve
Associate Primary Industries Spokesman

April 2 2013

Landcorp Should Be Included In Govt Asset Sales Program

ACT New Zealand Associate Primary Industry Spokesman Robin Grieve today called on the Government to include state farming company Landcorp in its assets sales program amid concerns the State Owned Enterprise received special treatment by the Government in the Crafar farms sale.

“ACT believes the Government should not be involved in the business of farm ownership and that 100 per cent of Landcorp should be sold,” Mr Grieve said.

“Not only is farm ownership well outside the Government’s core functions, there is also a real concern that the Government used its power and position in the overseas investment approval process to gain a competitive advantage for Landcorp.

“The Crafar Farms sales agreement, formulated by the Overseas Investment Office (OIO) and endorsed by National, stipulated that Landcorp must run the farms. This has meant that no other farm management company or individual can compete with Landcorp for profit sharing opportunities on Milk New Zealand Holding’s properties.

“This is an abuse of power leading to legislated protectionism. It’s is anti-competitive and anti-business.

“The OIO claimed this was beneficial to New Zealand because it benefits Landcorp. But it didn’t consider the negative impact this decision would have on the private businesses which compete with Landcorp for staff, for business inputs or produce sales.

“To satisfy the expertise requirement in the OIA (Overseas Investment Act), the Government and the OIO could have required an approved farming company or individual to operate the farms. There was no need for that condition to stipulate Landcorp.

The Government skewed the playing field in favour of its own company and there seems no legitimate reason to make this a condition of the sale to satisfy the OIO test. SOEs should operate without the need for special deals enforced by Government.

Crown ownership of commercial enterprises always creates a conflict with the government’s responsibility to regulate industry a non-partisan manner. This case illustrates that general point. Landcorp should be sold,” Mr Grieve said.

ENDS

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