Allowing Shania Twain To Buy High Country Stations
Just What Are The Benefits To NZ Of Allowing Shania Twain To Buy High Country Stations?
Helen Clark is currently back in the country to bask in the glow of the warm fuzzies. So it’s very timely to look critically at the continued purchase of South Island high country stations by companies linked to Canadian singer, Shania Twain, who was the poster girl of the Clark government’s policy on major land sales to foreigners. The 2005 purchase of the 25,000 ha Mototapu and Mt Soho stations by companies linked to Ms Twain and her then husband were hailed by politicians and the media as signalling a new “smart, win win” approach to the controversial subject of foreigners buying up great chunks of prime NZ land. Clark made sure that she got extensive media coverage when she attended the opening of the walking track through those stations.
This month a company linked to Shania Twain has been given Overseas Investment Office approval to buy the 8,579 ha Glencoe Station, which is near the other two stations, in Otago.
But an examination of the accounts of the Mototapu and Mt Solo Stations (“Lean earnings from Twain’s high country playground”, NBR NZ Property Investor, 16/2/10) reveals that they have been consistently running at a loss since their purchase. In the case of Soho: “It has built up $8.4 million in tax losses that may be applied against future earnings” plus “liabilities are $61 million, resulting in negative equity of $8.8 million”.
Tax losses don’t feature anywhere in the “substantial and identifiable benefit to New Zealand” that the Overseas Investment Office (and politicians and media) trumpeted in relation to these purchases. Tax losses on investment properties are a subject of major public discussion at present and the target of some of the most high profile recommendations of the Tax Working Group’s recent report on tax reform.
But we weren’t told, in 2005 or this year, that there was any suggestion that these high country station purchases were investment properties for tax loss purposes. Because where is the “substantial and identifiable benefit to New Zealand” in that? Let’s see if these properties continue to remain in their current ownership when, and if, the Government does actually toughen the law relating to tax losses on investment properties, even 25,000 ha ones.