Who Owns NZ? Foreign Control Key Facts Updated
For the first time in several years, CAFCA has completely updated the Foreign Control Key Facts page on our Website.
Big thanks to CAFCA Committee member Bill Rosenberg who did all the work.
And, for the first time, the Key Facts are accompanied by the sources for each one of them.
Please distribute them widely. They deserve to be known by all New Zealanders
Campaign Against Foreign Control of Aotearoa
Foreign Control - Key facts
|/Foreign direct investment (ownership of companies) in New Zealand increased from $9.7 billion in March 1989 to $101.4 billion at March 2013 – ten and a half times. As a proportion of the total output of the economy, Gross Domestic Product, it has risen from 14% to 48%. Though ownership of overseas assets by New Zealanders has grown even faster over that period from a very small start, net foreign direct investment has still almost tripled as a percentage of GDP, rising from 13% of GDP to 37%.||International Investment Position, National Accounts, Statistics New Zealand|
|/Foreign owners now control 33% of the share market. In 1989, the figure was 19% and it was estimated to be below 5% in 1986.||1986 and 2013: "Brian Gaynor: New Zealanders buy back their sharemarket", New Zealand Herald, 19 October 2013 1989: "Corporate Governance Research on New Zealand Listed Companies", by Mark Fox, Gordon Walker and Alma Pekmezovic, Arizona Journal of International & Comparative Law Vol. 29, No. 1, 2012, Table 4, p.16|
|/In 2012, the Overseas Investment Office (OIO), approved foreign investment totalling $4.9 billion. The average for the decade 2003-2012 was $10.9 billion. All but $2.0 billion in 2012 was sales from one overseas company to another (all but $2.2 billion on average over the decade). Only company takeovers involving $100 million or more need OIO approval, except those involving land or fishing quotas. For private Australian investors the threshold is $477 million, but this is adjusted upwards each year for inflation. Until 1999, the threshold was $10m and from August 2005 the government increased it to $100m.||Overseas Investment Commission and Overseas Investment Office.|
|/In 2012, the OIO approved the sale of 43,080 hectares of freehold rural land and 8,554 hectares of leases and other interests in land to foreigners. About 10,000 hectares of the freehold land and almost all the leases and other interests in land were from one foreign investor to another. In the decade 2003 to 2012, the average was 133,942 hectares of freehold and 60,435 hectares of leases and other interests in land approved for sale. Statistics on sales of land to overseas interests are poorly recorded and incomplete. Our best estimate is that in 2011 at least 8.7 percent of New Zealand farmland including forestry, or 1.3 million hectares, is foreign-owned or controlled and it could have reached 10 percent.||Overseas Investment Commission and Overseas
“Overseas Ownership Of Land: Far Greater Than The 1% The PM Claims”, by Bill Rosenberghttp://www.converge.org.nz/watchdog/29/02.htm
|/Statistics NZ figures, as of March 2013, list the biggest foreign owners of New Zealand companies as, in decreasing order: Australia, US, UK, Singapore, Netherlands, Japan, British Virgin Islands, Hong Kong, Cayman Islands, Canada, Switzerland, China and France. These accounted for 96% of foreign direct investment in New Zealand. British Virgin Islands and Cayman Islands are tax havens, and a Statistics New Zealand study showed that in 2010, large proportions of the foreign direct investment from the Netherlands, Singapore, Hong Kong and tax havens was in fact from other countries, led by the UK, US, Germany and Canada.||International Investment Position,
Statistics New Zealand|
Mallika Kelkar. (2011). “The ultimate sources of foreign direct investment (p. 19). Presented at the New Zealand Association of Economists (NZAE) Conference, Wellington, New Zealand. Retrieved from http://stats.govt.nz/methods/research-papers/nzae/nzae-2011/ultimate-sources-foreign-direct-investment.aspx
|/Transnational corporations (TNCs) make massive profits out of New Zealand. These can truly be called New Zealand's biggest invisible export. In the year to March 2013 at $8.3 billion their profits were almost as much as the $8.5 billion earned by the combined exports of seafood and milk powder. In the decade 2004-2013, TNCs made $73.4 billion in profits from New Zealand. Only 27% was reinvested.||Balance of Payments; Key Statistics Table 7.04 - Value of principal exports (excl re-exports) - Statistics New Zealand|
|/ Another $7.2 billion left New Zealand in the year to March 2013 made up of investment income from debt and smaller shareholdings (portfolio investment), making a total $15.5 billion. That is almost as much as the $15.8 billion of dairy and forest product exports during the same year. Almost half of the $15.5 billion (45%) was from the banking sector. The investment income from the banking sector (after taking account of its small earnings from abroad) was responsible for 71% of New Zealand’s current account deficit in the year to March 2013. The investment income deficit (income on New Zealand investment overseas less income on foreign investment in New Zealand) is typically at least as great as the current account deficit which further increases New Zealand’s foreign liabilities.||Balance of Payments; Key Statistics Table 7.04 - Value of principal exports (excl re-exports) - Statistics New Zealand|
|/ The Financial and insurance services sector, which includes the four big Australian owned banks, accounted for by far the biggest part of the $101.4 billion foreign ownership of New Zealand companies by industry in March 2013, with $39.3 billion. Next was Manufacturing at $14.4 billion. Other industries with more than $1 billion of foreign investment were in decreasing size, Retail trade; Rental, hiring and real estate services; Agriculture, forestry, and fishing; Professional, scientific and technical services; Electricity, gas, water and waste services; Wholesale trade; Mining; Information media and telecommunications; and Health care and social assistance.||International Investment
Position, Statistics New Zealand|
|/Foreign investors are not great for employment – they only employ 17% of the workforce, despite owning a large proportion of the economy. Foreign ownership does not guarantee more jobs. In fact, it quite often adds to unemployment. TNCs have made tens of thousands jobless.||Business demography statistics: Major industry by overseas equity (ANZSIC 06) 2000 -13, Statistics New Zealand|
|/Foreign ownership does nothing to improve New Zealand's foreign debt problem. In 1984, total private and public foreign debt stood at $16 billion, equivalent to less than half New Zealand’s Gross Domestic Product, and worth $50 billion in March 2013 dollars. As of March 2013, it was $251 billion, equivalent to well over 100% of New Zealand's Gross Domestic Product, despite all of the asset sales and takeovers.||International Investment Position, National Accounts - Statisti|