When the Prime Minister announced the mental health package last week his chief science advisor Sir Peter Gluckman explained how it had been based on science.
If only a similar process could be applied to foreign ownership of land, in particular the sale of the Crafar farms.
In yesterday’s Q&A interview by Shane Taurima of Land Corp chair Jim Sutton tried to give the facts but Russel Norman mostly used emotion.
RUSSEL Well, we certainly don’t need this foreign investment. I mean, all it’s doing in this case is driving up the price of rural land, because they’re paying a very large price for it in order to pay off an Australian owned bank who are the ones who are exposed because they leant too much money to Crafar.
The banks will get their money before anyone else. Those who miss out will be the unsecured creditors, most if not all of which, will be small, locally owned businesses. Each day the sale is delayed the costs increase, eating in to what will be left for creditors.
So we don’t need this money.
No? It’s better for us to have more foreign debt than equity?
This farm was going to be developed one way or another. It would be producing food one way or another. The key thing for New Zealand is we have this tremendously valuable strategic asset, which is arable land with access to water, food-producing land. That food-producing land will only become more important as time passes, and for us to hang on to that strategic asset is critical to our economic future.
It’s not one farm but many. If they’re not developed by a foreign owner they might be developed by a local one, or ones, but there will be no oversight of that nor recourse if they’re not. And if the development is undertaken it will be funded by borrowing from foreign lenders.
SHANE Mr Sutton, New Zealand First leader Winston Peters, he says that if the deal goes ahead, it will mean Landcorp will end up paying about $18 million a year to the landowner. In other words, he says a New Zealand SOE will end up being a tenant of a foreign company here in New Zealand. Is that true?
JIM No, that is not true, and I think what is important to realise is we as a sovereign nation are perfectly entitled to make rules for foreign people wishing to buy farmland in New Zealand, and if we want to do that and have more restrictive rules than we have got, let’s do it, let’s make it clear what they are, and let’s apply them without fear or favour to everybody who comes from overseas and wants to buy a farm in New Zealand.
Exactly, we should make the rules and apply them fairly.
SHANE Can I just clarify – so Landcorp won’t be paying any rent at all?
JIM No, we won’t be paying rent. We’ll be a share-farmer. A share-milker. SHANE Mr Norman?
RUSSEL Clearly, what a share-milker does is they hand over a proportion of the production to the owner of the land in lieu of rent. It’s a kind of rent. So without mixing words, clearly they’ll be paying rent. They’ll be a tenant in the land, which is effectively what a share-milker does.
By Norman’s reasoning, the land owner is paying rent for the cows, machinery, animal health products and other inputs the share-milker funds.
SHANE Mr Norman, don’t you have to be careful that you’re not encouraging an anti-Chinese feeling? After all, we’ve had a number of other nationalities buy land without the same reaction. Don’t you have to be careful?
RUSSEL Yeah, I think that’s a fair comment. Um, the Greens have had a very consistent approach. I mean, we think that New Zealand land should stay in New Zealand ownership, um, and we don’t care the nationality of the person applying – whether they’re Australian, American or European or Chinese.
Just a teeny bit of irony when this is said in an Australian accent.
JIM . . . If I were Chinese looking at this and wondering whether New Zealand really had its heart in building the economic partnership with China, I would wonder why Canadians, Americans, Italians, Germans, Australians, Brits, can come into parts of New Zealand, buy farm after farm after farm after farm and nobody in Wellington blinks an eyelid. But when the first Chinese…
RUSSEL The Greens do.
JIM …company comes along for this, all of a sudden it becomes a threat to our sovereignty, and I just think,‘How would I feel about that if I were Chinese?’ And I know what I would feel about it.
We know how the Chinese feel about it from another Q&A interview with David Mahon, managing director of Mahon China Investment Management who has lived in China for 25 years.
SHANE Do we run the risk of having that reputation being tarnished if the deal doesn’t go through?
DAVID We do. Certainly this would be something that not just in China, but throughout Asia with our major trading partners and these sizeable economies – India, Indonesia – would look upon this as being New Zealand as a narrow country after all, that New Zealand actually is racist in terms of its view of who it would like to be its business partners, which I think would be a sad misreading of New Zealand, because I don’t believe that New Zealand is actually racist. I think that this particular Crafar deal has triggered some unfortunate debate in lesser media, and I think it has become politically useful to some in New Zealand, given the fact that, um, you know, we have a very dynamic democracy. And so, in a sense, the real issues, I think, have been lost. But if this doesn’t go through, New Zealand will have a lot of repairing to do across Asia and certainly in China.
There wasn’t a whisper when a controlling interest in Turners and Growers was sold to a German company, even though it owns the iconic ENZA brand.
There was some, but not nearly as much, murmuring about land sales to people from Germany and the United States. But there has been much more about this particular deal and it appears to be not just because the buyers are foreign but because they are Chinese.
I wrote last month about our visit to farms owned by a Swedish family which showed the good it can do.
If we shut the door completely on foreign ownership, we will be the poorer for it.
The rules on foreign ownership were tightened recently. If there is a need for further tightening, let them be tightened but base any change on sound reasoning not emotion and definitely not on xenophobia.