Open slather foreign ownership
Sandra Lee MP Thu Sep 23 1999
Alliance deputy leader Sandra Lee is calling the furtive changes the greatest present danger to New Zealand sovereignty.
During the build up to the APEC leader's summit the government quietly revealed that it is increasing to $50 million the threshold at which Overseas Investment Commission consent is needed before a foreigner can purchase New Zealand assets other than land.
The Alliance campaigned in Auckland today against the loosening of overseas investment rules, on the same day that new balance of payments figures were released showing the country has slipped further into the red.
In the twelve months to the end of June New Zealand spent $6,292 million more than it earned overseas. One of the major factors in the deficit is the outflow of profits to foreign owners of New Zealand assets.
Sandra Lee released figures showing that under the government's planned law changes only three purchases of New Zealand assets other than land would have required Overseas Investment Commission approval in the first half of this year. They were INL's $94 million purchase of Sky, Edison's $1.2 billion purchase of Contact Energy and St Lukes Properties' $135 million purchase of Queensgate Mall in Upper Hutt.
Thirty-six New Zealand assets sold in the first half of this year would not have required prior approval under the new rules. Immediately prior to the APEC leader's summit the Prime Minister announced that, 'New Zealand will raise the threshold at which consent for non-land foreign investment is required from NZ$10 million to NZ$50 million, on a multilateral basis.'
'This opens the door to virtually open slather foreign ownership. It cements New Zealand's place as the country with the least restrictions on foreign ownership in the develop world,' Sandra Lee said.
'This is a sovereignty issue. New Zealanders are losing control of our own destiny.
'New Zealand already has virtually no controls on foreign investment. In the first half of this year only one application, for a tiny 3 hectare property in Otago, was declined. Now the last vestiges of control are being lifted.
'The government likes to claim that overseas investment is needed for New Zealand's development. In fact, most overseas investment is for the purchase of existing assets.
'105 applications were made in the first half of this year to buy up $2.5 billion worth of New Zealand. The overwhelming majority were to buy land and businesses that were already up and running in the hands of New Zealanders.
'27 of the applications were for purchases of arable land and 26 were for purchases of existing businesses. Exactly none were for the commencement of a new business or the expansion of an existing business. Only one was for further capitalisation of an existing business.
'While investment that opens new businesses or helps to expand existing ones can be good, the same can't be said for purchases of existing businesses and farm land. It just means that profits earned by New Zealanders will go to the overseas owners and make our overseas deficit even worse.
'How much worse does it have to get before the government accepts that open slather foreign ownership isn't working for New Zealanders?'