Rt Hon Winston Peters
New Zealand First Leader

Rotary Club of Wellington Speech
Monday 14 April, 12.30pm
James Cook Hotel, The Terrace, Wellington

Ladies and Gentlemen, Rotary members and guests, thank you for inviting me here today.

When the dust settles on election night 2014, New Zealand First will be in strong position which makes the policies we stand for extremely relevant.

Our manifesto is being updated so in the brief time available to us let’s focus on three issues.

First:

New Zealand First has been proved right on the exchange rate.

We have been consistently warning for decades that New Zealand’s monetary policy is in a time warp.

In the last two years, we have introduced two Bills on the Reserve Bank Act which were narrowly defeated by one vote both times.

Right now the underlying economic reality is disguised/hidden – because of the best terms of trade for 40 years.

But even now we have a huge balance of payments deficit. That deficit was $7.5 billion in the year ended December 2014.

Despite all the hype and spin about a rock star economy we are not paying our way.

New Zealand has an endemic balance of payments deficit – and that is why New Zealand owes the rest of world a net $150 billion! That is around 66% of GDP – which puts us in the company of Spain and Portugal.

A chronically overvalued exchange rate is eroding the economic base – all sorts of manufacturing firms and capabilities are being lost.

The International Monetary Fund’s recent report concluded that New Zealand’s dollar is seriously overvalued. It is doing great damage to the economy but the commodity boom is concealing the real extent of what is happening.

We are ending up with a very unbalanced and vulnerable economy.

We have a situation where one product, one company, and one market is completely dominating the economy.

Milk powder, Fonterra, China.

Look closer and you will see the damage from our overvalued exchange rate.

The other week an award winning super yacht exporter in Auckland – Alloy Yachts - was forced to lay off 70 workers because of the strong New Zealand dollar.

Today, 85 workers are likely to lose their jobs at Christchurch Yarns which the company blames on the high New Zealand dollar.

This story is typical and is being repeated up and down the country.

Fitzroy Yachts in New Plymouth is closing with the loss of 120 jobs.

Week after week, year after year, the story of these closures for that reason continue unabated.

New Zealand First is committed to a realistic exchange rate policy that will stop this remorseless undermining of the economic base.

New Zealand First has consistently and urgently sounded the alarm on foreign ownership and of other assets.

Now we are approaching an election, and, as is entirely predictable, other parties are jumping on this issue.

They are welcome to but they should at least acknowledge who raised the alarm first and who has been consistent about it.

For some of these other parties have a track record hitherto of dismissing such concerns as alarmist and xenophobic.

The facts are these - there are large scale purchases of land especially dairy farms by foreign interests. (The 16 Crafar farms sold to China is the tip of a great iceberg).

Second:

A significant proportion of our housing stock has been bought by foreigners and that is continuing under National.

Many of our best businesses and firms are being sold into foreign ownership (such as Waste Management which went to a Chinese company recently).

While they have been in office National has shown their clear intention to allow as much of our land, property and businesses to be sold into foreign ownership as overseas interests desire.

They have shown absolutely no will to stop, or slow down losses to foreign ownership.

So voters do have a choice in September.

Under National’s present policy settings losses to foreign ownership can only get worse.

What New Zealand First will be offering is a robust policy to protect New Zealand’s national interests and halt the losses. Because most so called foreign investment is bogus – nothing new is created – either in employment or exports - it’s just a case of existing assets changing hands.

When the current neo-liberal policies began in 1984, 19 per cent of New Zealand’s share market was foreign owned. Today it is over 70 per cent.

One doesn’t have to be a rocket scientist to understand how this transfer of ownership acts as a vacuum of wealth out of our economy.

Third:

The third concern is specifically about the housing situation, in particular because National has made such a total hash of it.

House prices in Auckland have been rising around 14% on an annual basis.

Real Estate Institute of New Zealand data shows that the median price of a house in the Auckland area is now $563,000 – and heading towards $600,000!

This is bubble territory!

Has the Prime Minister never heard of the basics of supply and demand?

Faced by the housing crisis the Government is refusing to act on curbing demand by limiting the purchase of our housing stock by non-resident, non New Zealand citizens.

Mr Key has spent the past five years claiming that foreign buyers make no difference – “no problem - there is nothing to see here – just move on”.

He has the audacity to say that because New Zealand First wants to restrict foreign ownership New Zealand First does not want New Zealanders to trade with other countries. This is a silly attempt to divert attention from the real issues.

This is worse than just a head in the sand attitude.

It is a wilful and deliberate denial of the facts.

Over the weekend it emerged that while the Prime Minister was dissembling on the one hand, over in the other corner, Finance Minister Bill English had asked Treasury to check the facts.

Mr English, and thanks go to TV3, was personally briefed in July last year by Treasury on restricting overseas buyers and was advised by Treasury it was feasible.

But National has learnt nothing and is determined to persist with this folly.

On the weekend’s The Nation, Bill English said this:

“The question is whether in the long run, it’s desirable that we ban anyone from outside New Zealand from being able to buy things in New Zealand. We don’t believe that it is desirable.”

To quote him:

“Yes, no, well you know, it will show that there are two or three houses in every hundred being bought by Chinese residents, so what do you do about that? And our answer would be ‘that’s not a big problem’.

His answer was the typical evasive and dismissive – there is no problem.

How does he know how many houses are being bought by non New Zealanders?

He does not – but as Minister of Finance it is worse he doesn’t want to know and prefers a Dipton guess!

Remember we have called for a register for foreign ownership of land and houses.
National has opposed it.

In short they don’t want the evidence to out their flimsy position.

All the facts we can see – reports from real estate agents, properties being widely advertised in China and elsewhere point to a major problem.

In September voters will get a clear choice.

Because our policy is that we will stop non-residents who are not New Zealand citizens from buying our houses and land, except if they first meet a stringent criteria related to New Zealand exports and economic interests.

We will introduce a register of foreign ownership covering land and housing.

These are hardly radical steps. Mr Key may think it is silly, but by this judgement so are China, Hong Kong, Canada, Australia, Brazil, Japan, Singapore and most other countries.

Limited housing and land stock should first and foremost be available to a country’s citizens - New Zealanders in this case.

Be warned.

In the next few months National’s polls will panic them on this issue. Mr Key will then make a dog whistle about his concern over foreign ownership. But by his previous comments a dog whistle is all it will be.

You are going to have a real choice come September.

I am asking you to exercise it in the country’s interests.

ENDS

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