Open slather foreign ownership
Sandra Lee MP Thu Sep 23 1999
Restrictions on foreigners buying up New Zealand are
being quietly lifted, even while New Zealand's overseas
deficit continues to climb.
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?'
ENDS