It is pretty unusual for me to disagree with Brian Rudman, the thinking man’s curmudgeon. But today he accuses Labour of wrapping ourselves in the flag over the sale of the Crafar farms. Brian you have crossed the line, and provoked my first Red Alert post of 2012!
Free marketeers (and Rudman is not one of those) have long resorted to branding as racist anyone who opposes foreign ownership. But I don’t buy it, and never have.
If Labour didn’t have a policy of opposition to rural land sales to foreign buyers and we opposed the Chinese bid, then yes that would look like xenophobia aimed at the Chinese. But during the last parliamentary term we adopted new policy in this area, proposing to clamp down on the sale of rural land to foreign buyers unless significant benefits to the national interest could be demonstrated. And as David Parker pointed out on Monday, we have criticised sales to German, US, Chinese and other foreign investors.
So is it xenophobic to oppose any measure that promotes the New Zealand economy and limits foreign ownership in our economy? Is it racist of China and numerous other countries to place limits on the sale of land to foreigners in their countries? Of course not.
During the election campaign I did a talkback radio debate with National MP Jami-Lee Ross on the ethnic Indian station Humm FM. Jamie accused me of racism when I said National’s asset sales policy risked putting our most valuable SOEs in foreign hands. Two callers responded: newly arrived Indian migrants who disagreed strongly with Mr Ross, both saying they were Kiwis and wanted the assets to stay in New Zealand ownership, and that the issue wasn’t about race at all.
Brian also seems to think that because so much of our economy is foreign-owned we may as well sell what is left:
With our banks and insurance companies and much else long sold off – $45 billion worth in the hands of Australians the last time I checked – it seems a little late in the day for Labour to espouse this particular principle.
I don’t want to sell what is left. Labour learned the lessons of the botched privatisations of the 80s and 90s. The challenge for our generation in politics is to build up New Zealand’s assets. That is why we need to make Kiwisaver universal to build our capital markets. It is why we need to build successful Kiwi firms through investing in research and development. It is why we should not be selling down our most successful state owned enterprises, nor KiwiBank. And it is why we should not be selling prime rural land to overseas buyers.
It’s not just land. Our entire economy needs to be owned by us. Foreign ownership (not investment although I see no reason for this either) needs to be banned.
Mr Bastard, are you including private companies in your ‘entire economy’?
Doesn’t Post Office own Kiwibank?
Wasn’t the FTA a triumph? Is there really that much electoral change in trying to find a Labour-style Orewa?
http://www.scoop.co.nz/stories/PO1201/S00137/china-could-have-sued-under-fta-if-crafar-farm-sale-declined.htm
What we want from Labour is a consistent clear approach about what things are to be safeguarded in New Zealand as we give more away to both the USA and China.
Show us a principled and consistent Labour that can keep the things that are crucial to being New Zealanders, but without putting our head under a blanket about what is happening in the world.
Perhaps some attention could be turned to Freeview? You can get more Chinese and Korean channels there than NZ ones. Not a call that we should remove those- simply that we should fight for better quality public digital broadcasting.
I am afraid that Rudman has got it correct. When can we start to have some sensible policy postions as we start another 3 years in opposition. Did we not notice the how well teh green did ? Can we not see how Winston is continuing to take valuable air space in the media ? And, what do we do ???? Attack the messenger……
Phil you (actually no one in Labour has raised this funnily enough) didn’t really mention the land approved for sale under the last Labour government. Quite relevant as alot of the ministers in Labour were in government then. You mentioned ‘I don’t want to sell what is left’ so why was your party so happy to approve the sale of the equivalent of crafer farms every month to overseas interests? Seems like you have absolutely no leg to stand on with this issue.
Have just seen the OIO report allowing sale of land in teh Waiarapa to James Cameron of Hollywood fame – do we portest this as well ?
(i) Labour’s policy is opposing selling land to foreigners, not to bad people, not to rich people, not to right-leaning voters, not to windows users, not to any other category of people. Your policy is clearly to discriminate against foreigners because they are foreigners.
(ii) Look up the definition of xenophobia:
(iii) Your policy opposes foreigners, therefore, by definition it is xenophobic.
It seems pretty black-and-white to me. What part of my logic do you not agree with?
so your logic for Labour’s stance not being xenophobic is that Labour supporters don’t think it is xenophobic? this is beyond belief, guys.
what was wrong with the position adopted during the Auckland Airport proposed sale, and treatment of ’strategic assets’? what exactly is the downside to foreign ownership when it is control that is economically valuable to NZers?
Parliamentary sovereignty ensures ‘we’ (or you if you get to represent us again) set the investment conditions, tax and regulatory settings, etc. Does Labour not have faith in its ability to do this anymore? Stop invoking the boogie-man and tell us why this is bad for NZ!
At least a corportate dairy entity needs to retain earnings, rather than completely passing all profits to farmers to be accrued in inflated land values – effectively put under the mattress. Overseas investors have a greater appreciation of strategic assets than NZers in this regard, evidenced by their commitments to invest in infrastructure to support future growth. Oh, and the land won’t go anywhere if they decide to extract their capital. what is the problem for NZ Inc, exactly?
mj – There is no contradiction between the China FTA and our position on rural land sales to overseas interests. The FTA prevents us from discriminating between Chinese and other foreign investors, but it doesn’t stop us putting limits on all foreign investment. I don’t think Jane Kelsey is right on this one.
mcV – Disagreeing with my favourite Herald columnist is hardly shooting the messenger. On the subject of James Cameron, under our policy his purchase of the two farms in the Wairarapa would presumably be subject to him getting residence (as he apparently says he intends to live here indefinitely) so would not be covered by the overseas investment rules.
Richard – Yes plenty of land was sold to overseas interests under the 5th Labour Govt. Try to keep up: we have changed our policy. Do you not want political parties to review and change their policies to make them better?
Thomas – Our policy is not based on an “intense or irrational dislike or fear of people from other countries”. It is based on trying to ensure that New Zealand’s strategic assets including prime rural farmland continue to be owned by NZers so we retain and hopefully increase control of our own destiny.
Ben – The problem for NZ Inc is that if more and more of our prime rural farmland (dairy country for argument’s sake) falls into overseas ownership we risk losing control and ownership of the supply chain of the one industry in which we are truly leaders. Prime farmland is in this sense a strategic asset. In John Key’s immortal words we start to become tenants in our own land.
I agree. But we need to address the cause, not the symptom. NZ has a trade deficit. We import more than we export and to pay for the difference we are forced to sell assets or borrow abroad.
It doesn’t matter what we are selling — debt, land, shares, bonds, — ultimately, we have to pay it back at some point in the future.
I’m tired of Labour railing against one particular type of sale, be it SOEs during the election or farms now. Step back and look at the big picture. We need to stop spending more than we earn.
This is a difficult problem that cannot simply be solved by legislative fiat. Labour needs to come up with new ideas for growing our export sector and showing real leadership.
In other words “Our policy is not based on discriminating against foreigners. It is based on discriminating for NZers.” Come on…
Thomas – Labour policies to address the structural problems in NZ economy that drive borrowing abroad or selling assets:
1. Increase savings pool by making Kiwisaver universal.
2. Foster export growth by reforming monetary policy.
3. Improve productivity by reinstating research and development tax credits.
4. Industry support for clean tech.
5. Reform industrial bargaining laws that put firms in a race to the bottom, driving wages down and lowering productivity.
6. Phase in lowering age of superannuation to avoid medium term fiscal crisis.
7. Make tax system fairer (ie capital gains tax) to balance budget without having to sell down SOEs.
phil, you are starting to sound like a collectivist farmer – i.e. a soviet politician. i’m sure fonterra owners are reassured by your interest in their on-farm equity. care to risk any of your own capital?
again, why conflate ownership and control? we *might* become tenants in our own land, but at the current rate, it will take hundreds of years (how does the Crafar decision suddenly tip the balance?) any-hoo, a better solution would be to tax profits or otherwise encourage a sharing of benefits through targetted investment. If you look around the world, Chinese investors are usually happy to make some seemingly generous undertakings to Govts that wish to engage.
“Try to keep up: we have changed our policy. Do you not want political parties to review and change their policies to make them better?”
sticking to some reasoned principles would be a good start, and you are so far only offering “we will all have [insert foreign nationality here] landlords”. changing policies and blaming supporters when they fail to understand why is not a good look.
good to see you responding thoughtfully though, just not yet convinced you believe what you are saying. i maintain that you are unwittingly tapping into voters’ fears with slogans and woolly thinking.
Phil:
Good stuff.
I view these with suspicion. Our monetary policy is already best-practice and subsidising “clean tech” sounds more like a feel-good fad, than responsible management.
I really don’t like Labour’s pro-union policy. It will take us back to the dark days of endless strikes and government wage controls.
Phil’s Labour policies
1 Dictate what people under 65 do with their money
2 Devalue the currency
3 Pick commercial and industrial winners
4 Ditto
5 Look after trade union mates
6 Raise eligibilty age for superannuation
7 Increase tax on give middle class and higher earners to give more support to beneficiaries
@Thomas +1
Labour policy people: quit biting off more than you can chew please.
Phil, your distinction on James Cameron is horsesh*t. Cameron applied to buy land under the overseas investment rules. Once he has bought the land there are no conditions that require him to be resident in NZ.
You know this. If a Penxin manager intended to be resident in NZ, would this make the investment suddenly okay?
You guys are so dishonest about your policy, you’re still treating the public like we’re too stupid to know when you’re telling furfies. Your policy is just downright racist, and you’re pandering to Winston’s crowd. Shame on you.
Not a peep out of Rudman or anyone else in the media when Johnboy reached for the dog whistle yesterday, reassuring his mates that he would not let ‘mum and dad investors be bound by the Treaty’. Of course, brave Sharples and Turia said nothing. I guess when you have bought them so cheaply, why would he worry?
Shearer and Peters , two peas in a pod.
Neither want people of the calibre of James Cameron to live in New Zealand.
Understandable as it shows up their “backstory” for what it is
Ben -IMpact – do you know any ways which could distinguish the Crafar sale from the Cameron sale in terms of it fitting the “investment” criteria. Genuine question I know little of the criteria.
While the Labour Party and Phil may not be xenophobic, there is plenty of evidence that many ordinary NZers are. Certainly the media are all giddy with excitement at having holloywood buy land here. None of the questions/comments/opinions/ yet expressed by them about Crafar-esque misgivings.
“Neither want people of the calibre of James Cameron to live in New Zealand.”
What does that mean? Are you saying making a movie is sign of calibre? Roman Polanski anyone? I confess I don’t know anything about him other than he directs movies. Inverness please share how you judged his “calibre”
Will Cameron pay tax. Is there evidence that the farms would have shut down and become non-farms if he hadn’t purchased them?
I see Labour intends “6. Phase in lowering age of superannuation to avoid medium term fiscal crisis.”
Does this mean Labour intends “lowering the age of eligibility for superannuation”. If so what do you intend lowering it to?
Simple question, complex answer. This is the cheap version:
There are two questions that standard economics fails to answer.
1.) What is the economy? and
2.) What is the economy for?
1.) The economy is the physical and human resources contained within the geographical boundaries of the nation state NZ. These resources are limited depending upon what they are:-
Renewable: These are limited within a time period. Fresh water is limited by rainfall, if it rains on average 10mm/day then the amount you have to use is less than 10mm/day (The rest goes into maintaining streams, rivers, lakes etc etc).
Non-Renewable: These have a fixed finite amount (Which can be broken down into recoverable and non-recoverable) and a time period limit. The latter is defined by how much we can extract through work (both human and machine but these to are limited by physical resources food/energy) without damaging the environment excessively. They also have one other aspect – Once they’re gone, they’re gone and there’s no getting them back which means that we have to even more careful with their use (which is why this governments drive to bring prosperity by digging up and selling off these resources as fast as they can is really quite stupid – we’ll end up even more impoverished).
According to what I was taught at uni as what economic research is about: The study into the distribution of scarce resources. After being taught this we were then subject to the study of the movement of money and the physical resources were forgotten. Selling land and businesses to foreign interests is, quite literally, selling the economy (Money going out of the country results in other people having a claim upon those resources that we need).
2.) The economy is there to ensure (at it’s most basic) two things: That everyone has enough to live (Housing, clothing, food)and has enough to participate within our society (computer, internet connection and transport (not private cars either as they’re horribly inefficient)). Or, to put it another way, a reasonable living standard.
The environment sets it’s own limits on society and thus the economy independent of the resources available due to the fact that we need it to live. Damaging the environment excessively will have an adverse effect upon us (Note the extremely depleted fish stocks despite the fact that we have a quota system, the drying up of the North Island due to Climate Change).
It’s these limits that the free-market economics ignores and makes private companies and rich people unaffordable.
Agreed and it shouldn’t have been sold to him until he was either a permanent resident or a citizen but unfortunately that’s not how the rules are presently written.
That said I’m less concerned about it because he has said that he will become a resident/citizen. I will also be thoroughly pissed off if he doesn’t and be demanding that it be renationalised without compensation.
Draco said “It’s not just land. Our entire economy needs to be owned by us.”
Who is us? You are using an amibguous collective. You need to explicate the collective you are referring to.
i would distinguish Cameron and Crafar due to the intended use of the land (and therefore the “opportunity cost” of the land being in an NZer’s hands).
A bit like immigration, we let people live here if they are of good character or whatever, under the assumption that more people and more diversity is good for everyone. Cameron seems good not just because he is moneyed up and self-reliant, but also creative. I doubt extracting an ‘undertaking to commit’ to assist the NZ film industry would be that attractive for him moving here.
i realise this commercial/residential motivation for buying land might be a bit arbitrary and i am not sure of the actual OIA rules. i thought you had to become or intend to become resident in NZ to buy land for living on here? would be interested in the rationale if not…
I find it interesting, Phil, that your avatar/picture reads “NOT YOURS TO SELL” – well that’s interesting. By one argument, you’re right.
The state assets are owned by the collective, so I understand your argument there.
But then surely the converse is true of any privately held property – they are not yours to stop the sale of, right?
This is nonsense, its just more of Labour’s “Do as I say, not what I do (or did)”. Labour changes policy off the cuff to suit the prevailing winds. I well rememebr the “apology” given by Labour for their running of the country in the ’80’s. Then when they got back into power virtually nothing changed, then once again out of government they advocate for policies they didn’t have the courage to enact when they were in power.
Which is a really stupid assumption considering that we don’t know the sustainable human carrying capacity of New Zealand.
Really? Considering context I thought I was fairly clear. The NZ economy needs to belong to the people who live in NZ, specifically, citizens of NZ.
Which just means that we need another law change. As the land can’t be removed from the collective the law needs to say that the land that your house/farm/building is on is held as a lease and not direct ownership.
Today, at long last, a journalist printed the ratio of sales of land to nation of buyer… China was WAY down the list.
Labour seems to have been happy to preside over lots of land sales over the years… are they proposing an across the board decrease, and by what criteria do they propose allowing sale of land to foreigners.
Even the PM’s “tenants in our land” appears to be mere rhetoric when viewed in light of the ratios released today.
How is that to be? You wouldn’t be naive to identify the people who live in New Zealand with the state (which is just an organization within New Zealand society). Then what ownership model do you suggest in which all New Zealanders would commonly own the economy? If we can, ontologically speaking, talk about ownership of an “economy” which does not to me seem to be the right kind of thing to be owned.
Is it racist of China and numerous other countries to place limits on the sale of land to foreigners in their countries
This is an ignorant comment. Private ownership of land in China is not available to anyone, Chinese or foreigner.
So saying China does not allow foreigners to buy land is as ridiculous as saying ‘New Zealand does not allow Australians to smoke cannabis’. True. But in such a hypothetical situation the writer would obviously be trying to make a point that New Zealand discriminates against Australians, that Australians are not allowed to do something that others can.
Bringing up this China does not sell foreigners land argument shows the writer to be either ignorant or stirring up shit.