The Great NZ Sell-Off Continues…
Despite recent assurances from the Prime Minister, John Key, to restrict foreign purchases of NZ farmland, his assurances that, “I think we’re making progress in this area” seems to be based on empty words and little more.
As the Dominion Post reported last year, “an average of 82 hectares of agricultural land per day has been approved for sale to offshore investors”.
Some recent headlines bear out that report,
It seems quite clear that John Key’s optimistic view that ” I think we’re making progress in this area” is wildly misplace. As usual, his soothing, reassuring words bear little relationship to reality.
But voters have yet to figure that out, collectively.
What the New Zealand public does understand, with crystal clarity, is that selling our farmland to overseas investors is counter-productive; counter-intuitive; and short-sighted economically.
It also cheats our children of their birthright.
New Zealand farmland is over-priced and farmers have gotten into trouble with massive bankloans and reducing equity. In part, this is due to the weasy credit that has been available to NZ society since 1985, when our banking system was de-regulated by you-know-who.
De-regulation meant that vast amounts of money flowed into NZ, for banks to lend out as mortgages, investments, loans, etc.
It also meant that, as money-supply increased, so did property prices. Quite simply, we could expect to sell our properties because there was an endless supply of money available from banks. Purchasers could borrow 80%, 90%, and sometimes 100% for mortgages.
So property prices went up. Our borrowings went up. Demand went up, as speculation was tax-free (remember that there is no Capital Gains Tax in NZ). It was an uncontrolled spending spree, without any consideration that eventually, the bubble would burst.
Well, in 2008, the bubble burst. In early 2008, there were signs that there was a crisis looming in the US banking industry. On 3 March 2008, the Federal Deposit Insurance Corp, the US federal agency that backs bank deposits, identified 76 banks as in trouble , a 52% increase from a year ago.
By July 2008, Freddie Mac and Fannie Mae, were in severe financial trouble.
On 15 September 2008, Lehmann Bros, in Wall St, New York, filed for bankruptcy. The subsequent chain reaction of banking failures sparked a global financial crisis and the world fell headlong into a recession.
Here in NZ, credit dried up, and suddenly our farms were no longer worth the high prices that people had been paying for them. The property boom came grinding to a halt, and the “bubble” well and truly burst.
We could no longer afford to buy over-priced properties to make speculative profits that had been financed using money borrowed from overseas. It was time to pay the Piper.
For many owners of farmland, the obvious solution seems to be to sell properties to overseas interests. Foreigners have the necessary capital – which local New Zealanders do not.
Unfortunately, in doing so, we are effectively locking-out our next generation from the opportunities that our generation – the massive-borrowing, heavily-indebted, Baby Boomers – had enjoyed. We have played “monopoly” with our farms; making ever-increasing profits; as we sold land to each other in a kingd of mad, money-go-round.
Now, we can only save our indebted ‘skins’ by selling out to foreign interests.
This is simply another chapter of the story I told here; “Greed is Good?“.
Is it fare, I ask myself, that we have priced farm land out of reach of our children?
Is it fare, I ask myself, that instead of our children enjoying the same opportunities that we did – that instead it will be Germans , Americans, Swiss, Chinese, etc, who will now reap the benefits?
The greed and naked self-interest of Bany Boomers is well known. It is no secret that we have looted the wealth of this country, and have left our children with fewer prospects than we enjoyed. No wonder so many of them have left New Zealand, and plan never to return,
“A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.
The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.
“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.
“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.” – Source
As we lose more and more farmland to overseas ownership, we should also expect some fairly noticeable consequences to follow;
1. Profits will flow back overseas, to offshore investors’ banks. This will impact on our Balance of Payments (negatively, I might add). This, in turn, will affect our sovereign credit rating; the interest rates we pay for money we borrow… and finally, our mortgages.
2. As farm produce fetches higher prices overseas, expect to see this reflected in the price of dairy products and meat that we purchase in our supermarkets. We have already experienced the high cos of milk and cheese, due to high prices overseas. Expect this to worsen.
Property and farm owners may object. They will squeal like stuck pigs, in fact. But the sale of our land to foreigners, whether American or Chinese; Australian or German; will eventually impact impact negatively on our economy and on the prospects of our children.
Enough is enough. No more pandering to the self-interest of Baby Boomers.
It is time that common sense kicked in. The sell-off of our country has to stop. Otherwise, as John Key warned, we will become tenants in our own land.
To hell with that.
For a better New Zealand…
~ Cleaner rivers
~ No deep-sea oil drilling
~ Less on Roads - more on Rail
~ A Living wage at $18.40/hr
~ Marriage equality - Yay! Got that one!
~ Strong, effective Unions
~ No secret free-trade deals
~ Breakfast/lunches in our schools
~ Introducing Civics into our school curriculum
~ Cut back on the liquor industry
~ A fairer, progressive tax system
~ Fully funded, free healthcare
~ Ditto for education, including Tertiary
~ Fund Pharmac for Pompe's Disease medication & other 'orphan' drugs
~ No state asset sales!
~ Rebuild public TV broadcasting!
~ Keeping farms in local ownership
~ Reduce poverty, like we reduced the toll for road-fatalities
~ Jobs, Jobs, Jobs!
~ Being nice to each other
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- A letter to the editor…
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- Radio NZ: Politics with Matthew Hooton and Mike Williams – 2 December 2013
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- Geoff Robinson – an era ends.
- Radio NZ: Politics with Matthew Hooton and Mike Williams – 25 November 2013
- Radio NZ: Focus on Politics for 22 November 2013
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- Random Thoughts on Random Things #5…
- Random Thoughts on Random Things #4…
- Random Thoughts on Random Things #3…
- Random Thoughts on Random Things #2…
- Random Thoughts on Random Things #1…
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- Radio NZ: Politics with Matthew Hooton and Mike Williams – 30 September 2013
- Endorsing Celia for Mayor
- How To Guide: Voting in Auckland
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