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Posts Tagged ‘foreign ownership’

Letter to the editor – So this is ‘job creation’ by foreign ownership?

25 February 2016 2 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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This is not the news that towns and regions across the country want to wake up to;

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Shock in Invercargill as meatworks shuts

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The Radio NZ report continues;

Prime Range was taken over 15 months [November 2014] ago by a Chinese-backed company, Lianhua Trading Group, which itself could be troubled.

Its shares had been put into receivership and it had changed directors several times since the deal.

The Meat Workers Union said the firm had run out of money because its investors had been caught up in turmoil on the Chinese stock exchange.

Invercargill MP Sarah Dowie has called on Prime Range to tell its suspended workers what is going on.

Ms Dowie said she had received messages from distraught families and the situation was hard on them.

Work and Income New Zealand was on standby for workers as a safety net, but she hoped issues would be resolved as soon as possible.

No one from the company, nor its directors, returned calls from RNZ News.

I’ll bet that “no one from the company, nor its directors, returned calls from RNZ NewsCountries like China are not noted for engaging with media and explaining what is happening to their workers.

The fate of Prime Range prompted me to share these observations with The Southland Times;

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from: Frank Macskasy <fmacskasy@gmail.com>
to: The editor <letters@stl.co.nz>
date: Thu, Feb 18, 2016
subject: Letter to the editor

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The editor
Southland Times

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One hundred and thirty workers at Prime Range Meats have been suspended, with no guarantee that they will be able to return to work. This is the fall-out after Prime was purchased by foreign investors in November 2014.

The situation for these 130 workers is dire, with no income, and no money with which to buy food or pay their bills. How they are able to survive is a miracle in itself.

In all this mess, where is Southland’s former MP, Bill English? Despite abdicating his role as MP for Southland, and becoming a sole-List MP in 2014, one would expect that he has at least a moral duty to step in and sort out this mess.

After all, it was Bill English who, in March 2009, said,

“Overseas investment can play an important role in economic recovery and job creation” (Beehive: ‘Government to simplify foreign investment rules’)

In this case, overseas investment has factored in job destruction, putting many Southland families into financial strife.

Bill English needs to step up. He has advocated for foreign investment and takeover of local companies. Now he needs to take responsibility.

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-Frank Macskasy

[address and phone number supplied]

Postscript

In justifying the need for foreign investment, and consequential buy-up of local companies and other assets, Bill English said in Parliament on 13 February 2013;

“…New Zealand has not, for many decades, had sufficient savings to fund all of its own investment.”

Mr English is 100% correct in  this; New Zealand has not had sufficient savings to fund all of its own investment. Not since National abandoned Labour’s superannuation savings scheme in 1975;

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Compulsory super 'would be worth $278b' - fairfax media - National Govt incompetance

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Fortyone years later, we are still paying for National’s short-sightedness and fiscal imprudence.

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References

Radio NZ: Shock in Invercargill as meatworks shuts

Beehive: Hon Bill English

Beehive: Government to simplify foreign investment rules

Parliament: Hansards – Economic Growth and Job Creation – Progress and Foreign Direct Investment

Fairfax media: Compulsory super ‘would be worth $278b’

Additional

Radio NZ: 130 meatworkers wait for news after suspension

Radio NZ: Meat workers in limbo after sudden suspension

Radio NZ: Suspended meatworker’s wife says 130 families are struggling

NZ Herald: Decision lies with farmers, says English

Related blogposts

Kiwis, Cows, and Canadian singers

That was Then, this is Now #10

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9-john-key-tenants-in-our-own-country

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This blogpost was first published on The Daily Blog on 20 February 2016.

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Four Ways to Madness, Kiwi-style – a day in our media

22 September 2015 6 comments

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crazy-promises

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September 15 – A day in our history when four items of news were reported in our media, and few people seemed aware of  the new depths of craziness that our country has sunk to.

It was said that the old Soviet system was riddled with contradictions that, by 1991, led to it’s demise.

That charge could just as easily be levelled against the neo-liberal system, where the pursuit of the almighty dollar/euro/yen/etc has resulted in levels of crazy contradictions that are becoming more apparent with each passing day, and  increasingly difficult to sustain and justify by it’s proponents.

Those contradictions, I suspect, were part of the reason of Jeremy Corbyn’s ascension in the British Labour Party, and left-wing governments gaining ground in France, Greece, and elsewhere.

New Zealand has often been behind the times, so it may take a wee while longer for voters to fully comprehend that the neo-liberal system is a fraud, with only a few benefitting.

Four headlines. Four more examples of “free” market, corporate quackery. Four more nails in the neo-liberal coffin.

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Nail #1

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Silver Fern chair sees no problem with Chinese buy-in - radio nz - Bright Foods - China - state owned enterprise

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The purchaser of Silver Fern is Shanghai Making Aquarius Group. Shanghai Maling Aquarius Group will be purchasing a 50% shareholding of Silver Fern, paying $261 million for the buy-in.

Shanghai Maling Aquarius Group is one of four subsidiaries of Bright Foods, a State Owned Enterprise, 100% owned by the Chinese government (though registered in the Cayman Islands – no doubt for tax-avoidance purposes). Bright Foods owns 39.12% (as of September 2015) of Synlait Milk Ltd, which it bought into five years ago.

At $261 million, the purchase price is still a small fraction of the estimated US$4 trillion it has “in foreign currency reserves, which it is determined to invest overseas to earn a profit and exert its influence“, according to a recent report in the New York Times.

As usual, our National-led government has turned a blind eye to yet another buy-up of one of New Zealand’s primary industry producers.

Yet, with a 50% holding, that almost guarantees that half of Silver Fern’s profits will end up going back to Bright Foods and the Chinese government.

Another report states that investors from China are set to invest US$10.9 billion in our real estate, according to said Andrew Taylor, Juwai.com’s co-chief executive;

“Juwai.com projects that the pilot program will enable US$11 billion of new Chinese money to flow into New Zealand’s real estate market. That’s based on wealthy Chinese investing 10 per cent of their assets into international property, including commercial. It’s also based on NZ getting about 3.3 per cent of that property-specific investment, as it has in the past.

The question is; why is it permissable for a  foreign State Owned Enterprise to buy up New Zealand companies – whilst our own government is busy shedding ownership of Genesis Energy, Meridian, Mighty River Power, Air New Zealand, land owned by Landcorp, and houses owned by Housing NZ?

Why does National think that State ownership by the NZ Government in our productive industries is undesirable – but State ownership by foreign nations is perfectly acceptable?

This appears to be a major flaw in  neo-liberal ideology and one that National has yet to confront head-on.

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Nail #2

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Radio NZ - Politicians fling flag barbs - flag referendum - john key - red peak - andrew little

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It has been fairly obvious that the flag referendum has been foisted upon New Zealand for two reasons,

  1. A distraction to deflect public and media attention away from the deepening economic downturn that has every indication of turning into another full-blown recession,
  2. A personal vanity-project for John Key, because eradicating child poverty; addressing the Auckland housing crisis; or making meaningful inroads into New Zealand’s worsening greenhouse gas emissions is not the kind of legacy our esteemed Dear Leader thinks is important enough to warrant his attention (he is a busy man).

On 14 September, John Key surprised many people by “reaching out” to the NZ Labour Party to assist National to include the so-called “red peak” flag in  the up-coming referendum. As Radio NZ reported Key’s comments;

“If I drop out one of them, if I drop out one particular flag, there will be a group that will say that was wrong because I was going to vote for that – there will be another group that will say ‘I just didn’t realise this was a process that could be influenced through social campaign’.

If you look at Labour, they’ve been very disingenuous throughout the whole process so if I’ve got to go back to Parliament and change the law to have five, are you really telling me they wouldn’t then run a campaign that said I’m wasting Parliament’s time because I’m now going back to it?

I mean, these people can play games forever.

Well, they would need to go back and change their position on the flag process, instead of lying to the public and saying they’re opposed to this when their policy is actually to change the flag.

If they want to treat the whole process with respect, they’re welcome to come and have a discussion with me, but that is not the way they’ve played this thing.

And if Labour want to publicly come out and support the process and the change, that it’s an appropriate thing to do and argue that it’s an appropriate thing to do… then we might, but that hasn’t been what they’ve done so far.”

There seemed an element of desperation in Key’s plaintive demand for Labour’s support on the issue.

Which is hardly surprising, as support for the “red peak” option had surpassed 50,000 in an on-line petition – a number equivalent to the 50,000 who marched through Auckland in May 2010, opposing National’s proposed mining in protected Schedule 4 DoC conservation land and marine reserves. The sheer number forced National to back down, and on 20 July 2010, then-Energy Minister Gerry Brownlee announced;

“At the time the discussion document was released, I made it clear that it was a discussion. There were no preconceived positions from the Government. We have no intention of mining national parks.”

The question though is, who is playing games here?

Andrew Little explained;

“The Prime Minister can put Red Peak on the ballot paper without any party political support. He does it by Order in Council – he does not need other parties’ support for that.”

A brief explanation on what is an Order In Council;

Order in Council
A type of Legislative Instrument that is made by the Executive Council presided over by the Governor-General. Most Legislative Instruments are made by way of Order in Council. For more information about the Executive Council, see the Department of the Prime Minister and Cabinet website. To find Orders in Council on this website, search or browse under Legislative Instruments.

Source: Parliament – Legislation – Glossary

Executive Council

The Executive Council is the highest formal instrument of government. It is the part of the executive branch of government that carries out formal acts of government.

By convention, the Executive Council comprises all Ministers of the Crown, whether those Ministers are inside or outside Cabinet. The Governor-General presides over, but is not a member of, the Executive Council. When a new Cabinet is sworn in, Ministers are first appointed as Executive Councillors and then receive warrants for their respective Ministerial portfolios.

The principal function of the Executive Council is to advise the Governor-General to make Orders in Council that are required to give effect to the Government’s decisions. Apart from Acts of parliament, Orders in Council are the main method by which the government implements decisions that need legal force. The Executive Council also meets from time to time to carry out formal acts of state.

Meetings

The Executive Council generally meets every Monday. At the meetings, the Executive Council gives formal advice to the Governor-General to sign Orders in Council (to make, for example, regulations or appointments). The meetings also provide an opportunity for Ministers to brief the Governor-General on significant political and constitutional issues that may have arisen during the week.

Source: Department of the Priome Minister and Cabinet – Executive

So apparently, unless I am missing something else, Andrew Little is 100% correct; “The Prime Minister can put Red Peak on the ballot paper without any party political support. He does it by Order in Council – he does not need other parties’ support for that.”

Which then begs the question; why is John Key trying to strong-arm Labour into supporting the addition of  the “red peak” option onto the ballot paper?

Answer: He is attempting to manufacture “cross party support” to extricate his government from a tricky situation. The flag referendum appears to be spiralling out of control with popular support growing for a flag design that is not simply a pathetic branding exercise (ie; silver fern) – but has become popular with a significant portion of the country.

If Key is to bow to popular pressure, he desperately needs Labour to come on-board, to neutralise a  guarenteed attack from the Opposition benches. As Key himself said on 15 September;

“And if Labour want to publicly come out and support the process and the change, that it’s an appropriate thing to do and argue that it’s an appropriate thing to do… then we might, but that hasn’t been what they’ve done so far.”

In effect, Key is employing precisely the same tactic Labour employed in 2007, where Helen Clark sought cross-party support to pass the Crimes (Substituted Section 59) Amendment Act (a.k.a the ‘Anti-Smacking Act’).

National’s parliamentary support, fronted by the then-Opposition Leader, John Key, gave a “seal of approval” from the Political Liberal-Right, to an otherwise contentious piece of legislation that was provoking howls of hysterical outrage from certain quarters.

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Key - Clarke- section 59 repeal

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Bringing Key on-board was risky for Labour, as it elevated Key to a near-equal position with then-Prime Minister, Helen Clark. But it was seen as necessary, to attempt to dilute the perception that this was “social engineering” inspired by Labour-Green “extremists”.

Eight years later, and this time John Key needs Labour to stifle a growing disenchantment with his personal vanity-project, which is threatening to take on a life of it’s own.

Key cannot afford to lose control of the flag debate. There is a reason that this is a binding referendum –  the framing of the debate; the four choices; and the sequence of questions (#1, which alternative flag do you want, followed by #2, pick one of two flags, an alternative or the current one) – are all under his personal control, via the Executive Council.

Andrew Little is correct, our esteemed Dear Leader could choose to add the “red peak” option by an Order in Council. Key does not require Labour’s assistance, either constitutionally or legally. But he doesn’t want to leave himself open to ridicule from Labour, and the perception that he has “lost control”.

When John Key stated on 15 September;

“I’m more than happy to meet with him but only on the condition it’s not about a yes or no vote. A yes or no vote doesn’t work. It doesn’t deliver what New Zealanders want.”

–  he was not talking about “what New Zealanders want”.

He was talking about what he, John Key, wants. And he needs Labour to do it.

The question is: why should Labour help Key?

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Nail #3

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This next bit comes courtesy from Paula Bennett, currently  Minister for Social Housing.

Radio NZ reported on 15 September,

A government think tank has released its final report on the country’s social services and is urging major reform.

But the Productivity Commission is unable to offer specific solutions as to how the government should deal with the group that is most difficult to look after.

Every year, the country spends $34 billion on social services, more than 10 percent of the GDP.

Read today’s final report into social services by the Productivity Commission (PDF, 4.3MB)

The commission recommends a move away from the current top-down approach, with more responsibility given to providers.

But it could not decide how to deal with the people with the most complex needs, instead suggesting that the government look at two possible solutions.

One option would be a standalone agency which oversees a client’s case across a number of agencies.

The second would be to fund District Health Boards (DHBs) to be responsible for the country’s most disadvantaged people.

It also recommends establishing a Ministerial Committee of Social Services, rather than an Office of Social Services, which had been recommended in its draft report. The ministerial committee would be responsible for reform of the sector.

The commission has defined social services as those including health care, social care, education and training, employment services and community services.

It has looked at agencies and services including Housing New Zealand, Work and Income, Whanau Ora, services for people with disabilities, and home care for the elderly.

Interviewed on Radio NZ’s Checkpoint, Paula Bennett was quick to reassure listeners that National was not penny-pinching at the expense of the most vulnerable in our society;

@ 2.47

“But we’ve never thought that money was the problem as such. If it needs more money, we will.”

The usual lie from a National Minister, considering the severe funding cutbacks to community organisations such as Women’s Refuge, Rape Crisis, community health organisations, Relationship Aotearoa, and many others.

But the following words to gush from her mouth simply beggared belief;

“What we’ve been really big on is the data analytics, that makes sure that we’re targetting the right services to the right kids and more importantly getting actual results for them.”

“Data analytics”?!

Bennett was adamant that  National has been  “really big on is the data analytics, that makes sure that”  they are  “targetting the right services to the right kids and more importantly getting actual results for them

Let’s take a moment to step back in time.

Specifically, set temporal co-ordinates of your Toyota Tardis to 16 August 2012. This NZ Herald story, from that year, tells the story;

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Measuring poverty line not a priority - Bennett

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The question here is; How can Bennett “target the right services to the right kids and more importantly get actual results for them” – when three years ago she stated categorically that finding the “data analytics” was not a priority?

What “data analytics” is she talking about?

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Nail #4

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The fiasco surrounding  the private company running Mt Eden and Wiri prisons got more bizarre on 15 September when it was revealed that  Serco had been let off $375,000 in fines for serious contract breaches.

Fines for breaching the contract between Serco and the Crown are one of the few sanctions that the government can levy on the company for not upholding contractual obligations.

A 15 September report from Radio NZ revealed;

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Serco let off $270k in fines - Minister

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The story then explained why  the heading – “$270k in fines’ – was an under-estimation;

Under questioning from Green Party corrections spokesperson David Clendon this afternoon, Corrections Minister Sam Lotu-liga spelt out the sum of Serco’s cancelled fines.

“Mr Speaker, since Serco took over management of Mt Eden Prison in 2011, I’m advised that Corrections has issued a total of 55 performance notices to Serco – seven have been withdrawn,” Mr Lotu-liga said.

“And the total amount of the withdrawals is $275,000.”

But it seems there are more fines that Serco has had cancelled and Mr Clendon asked the minister about one of them.

“Does the minister approve of Corrections’ decision to excuse the $100,000 fine that was imposed when Serco failed to take back razors that had been issued to prisoners, to inmates, if so why?” Mr Clendon asked.

Mr Lotu-liga responded that that was not one of the seven withdrawn fines he was referring too.

The chronically inept and terminally-tragic Corrections Minister, Sam Lotu-liga, was either unaware of the $100,000 fine – or was wilfully engaged in a cover-up.

However, whether the actual figure of $275,000 or $375,000 is actually irrelevant.

What is truly astounding is that someone within either the Minister’s office or the Corrections Dept had made the decision to scrub $375,000 in fines for serious contract breaches.

The obvious questions which beg to be asked and answered are;

  1. Who made the decision to dismiss $375,000 in fines issued to Serco?
  2. Why was the decision made to dismiss the fines?
  3. Does the same principle  of waiving fines extend to every citizen in New Zealand who has exceeded the speed limit; parked illegally; or committed  some other offence which resulted in a monetary penalty?
  4. What the hell is going on?!

The next time our esteemed Dear Leader or some other National minister utter the phrase, “One law for all” – they should be immediatly reminded that obviously “One Law for All” does not extend to companies like Serco.

15 September – one hell of a day for National. It got about as crazy as crazy can be in this country.

Or is there more to come?

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References

Radio NZ: Silver Fern chair sees no problem with Chinese buy-in

Wikipedia: Bright Foods

NZ Companies Office: Synlait Milk Limited

China Daily: China’s Bright Dairy invests in NZ’s Synlait

NY Times: China’s Global Ambitions, With Loans and Strings Attached

NZ Herald: Chinese investment set to boom

Radio NZ: Red Peak – Politicians fling flag barbs

Ministry for the Environment:  New Zealand’s Greenhouse Gas Inventory 1990-2013

Radio NZ: A flutter of hope for Red Peak?

NZ Herald: Red Peak – 50,000 strong petition handed over at Parliament

Fairfax media: Thousands march against mining

TV3: Govt confirms no mining Schedule 4, national parks

Te Ara – The NZ Enclyclopedia: Cross-party negotiation on legislation

Radio NZ: Major social service changes recommended

Radio NZ: Checkpoint – Government willing to spend more on social services (alt. link)

Dominion Post: Women’s Refuge cuts may lead to waiting lists

NZ Herald: Govt funding cuts reduce rape crisis support hours

NZ Doctor: Christchurch’s 198 Youth Health Centre to close its doors as management fails to implement directives from CDHB

Scoop media: Relationships Aotearoa – our story

NZ Herald: Measuring poverty line not a priority – Bennett

Radio NZ: Serco let off $270k in fines – Minister

Radio NZ: Serco let off $375k in fines (alt. link)

Previous related blogposts

Kiwis, Cows, and Canadian singers

That was Then, this is Now #10

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Three Questions to Key, Williamson, Coleman, et al

Taiwan FTA – Confirmation by TVNZ of China pressuring the Beehive?

Why Labour should NEVER play the “race card”

Letter to the editor: An idea regarding a new(ish) flag

The Flag Referendum – A strategy for Calm Resistance

Flying the flags of discontent – MOBILISE!

It’s a Man’s World, I guess

The cupboard is bare, says Dear Leader

The closure of three prisons and loss of 262 jobs – five issues for the National govt

So what is the rationale for private prisons?

Questions over Serco’s “independent” monitors and it’s Contract with the Crown

“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

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184mupp

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This blogpost was first published on The Daily Blog on 17 Septembr 2015.

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Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

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1949 state house in Taita

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Like a rolling juggernaut, our housing crisis has rolled over National, crushing it’s Dear Leader’s protestations that  no problem exists in our country;

“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.” – John Key, 13 April 2015

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John Key no housing crisis in Auckland

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Phil Twyford’s appearance on TV3’s ‘The Nation‘ on 11 July has finally put the problem of foreign ownership of property into a context that even the most dumbed-down, Reality-TV-watching New Zealander could understand.

It is mind-numbingly simple: with the most liberal foreign ownership laws in the world, foreign investors are pouring billions into our housing (and agricultural sector), hoping to make tax-free gains. In the process, prices are pushed up, out of reach of young, first-home buyers.

As I  wrote on 11 July;

Our parents and grandparents never had to compete with buyers from Berlin, Beijing, or Boston. So it baffles me why we have saddled our children with this colossal hurdle. The only reasons that come to mind is greed and a misguided ideolological view of an unfettered right to sell to whomever.

Some are now proposing a “solution” to this mounting problem. BNZ chief economist Tony Alexander suggests;

“We should as soon as possible adopt Australia’s rules restricting foreign buying of anything other than new housing unless resident for 12 months.”

This is a “Clayton’s Solution” and merely shifts the problem from existing properties to new properties being built. It beggars belief how any seemingly well-educated, intelligent person can proffer this as a “solution”.

How is it a “solution” when, for example, 1,800 new homes are permitted to be snapped up by overseas investors, and in the process side-lining first-home buyers;

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Up to 1800 new homes for Auckland

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This is not a “solution”. This is more of the same stupidity that has allowed our country to find itself in this mess in the first place.

Allowing foreign investors to buy new homes instead of existing homes simply transfers pressure on to new developments. It will also inevitably put pressure on existing, older homes being bought up by developers; demolished; and replaced by new houses or apartments. Consequence: Restriction avoided.

There is only one, clear, guaranteed way to stop our housing stock from becoming more and more the privilege of offshore investors:

1. Ban all sales of land to non-NZ residents or citizens. No exceptions.

Other policies that should also be enacted immediatly;

2. Implement an immediate stock-take of land-ownership, both agricultural and residential properties, so we know precisely how far the problem extends.

3. Implement a Capital Gains Tax on all properties (including the family home if sold within, say, five years).

4. Implement a law that foreign land owners are allowed to on-sell only to New Zealand permanent residents or citizens.

Half-measures such as National’s requirement for foreign investors to acquire an IRD number and bank account, or Tony Alexander’s naive suggestion will not do. The problem will continue to grow.

This is not ‘xenophobia’ or any other label bandied about by misguided individuals from the Left or Right. This is a matter of economic common sense.

I have no problem with citizens from Berlin, Boston, or Beijing wanting to buy New Zealand farms, houses, businesses, etc.

Just take up Permanent Residency or Citizenship first.

Sorted.

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References

Radio NZ: Key denies Auckland housing crisis

TV3: The Nation – Interview – Labour’s housing spokesman Phil Twyford

NZ Herald:  Auckland’s property crisis – Foreigners should build, not buy – economist

Radio NZ: Up to 1800 new homes for Auckland


 

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bromheadhouse

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This blogpost was first published on The Daily Blog on 14 July 2015.

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Why Labour should NEVER play the “race card”…

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… because National doesn’t like the competition;

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Don Brash tells Why I played the race card - orewa speech - national party

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It’s a bit rich for National’s Housing Minister, Nick Smith, to be crying crocodile tears on the subject;

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Labour accused of playing 'race card' over house price bubble claims

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– when, in the last seven years the Nats have;

  • sold off hundreds of State houses – and want to flog of 2,000 more
  • allowed a critical  housing shortage to make Cantabrians’ lives a misery
  • done practically nothing to alleviate a growing housing crisis in Auckland
  • refused to implement a comprehensive Capital Gain Tax, the lack of which is distorting the investment market
  • refused to set up a foreign buyers’ register
  • generally sat on their hands and done the bare minimum to build more housing

On this problem, National is way out of synch with public opinion. (ACT supporters’ public opinion counts for near zero.)

In fact, our esteemed Dear Leader even refuses to acknowledge  that a critical housing crisis exists in Auckland;

“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.” – John Key, 13 April 2015

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John Key no housing crisis in Auckland

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My position on this problem (I refuse to call it an “issue”) is clear and simple: land and housing should not be sold to non-New Zealand residents or citizens. If you want to buy a house or farm, become a citizen and move to New Zealand.

This applies to whether you are from Boston, Beijing, or Berlin.

Those free-marketeers who maintain that a property-owner has an unfettered “right” to sell to the highest bidder, irrespective of nationality, are wrong. “Rights” are never absolute. The citizens of a country determine, through concensus, what property rights we confer upon ourselves.

Many other nations do not allow foreign investors to buy houses. China is one of them.

If, as I believe, the majority of New Zealanders are opposed to offshore investors buying up our houses, then that must be reflected in our legislation.

This is (hopefully) not about xenophobia. This is about the next generation of  young New Zealanders having the same opportunities to buy their own home, as their parents and grandparents did.

This is about not allowing an older generation of home-owners flogging their houses off to the highest bidders from Beijing, Boston, or Berlin, at the expense of a younger generation who cannot hope to compete with millionaire investors from overseas.

Our parents and grandparents never had to compete with buyers from Berlin, Beijing, or Boston. So it baffles me why we have saddled our children with this colossal hurdle. The only reasons that come to mind is greed and a misguided ideolological view of an unfettered right to sell to whomever.

Otherwise, if we keep going down this foolhardy road then, as sure as evolution made little green apples, we risk literally becoming tenants in our own country.

If that is our end goal, we are on the right track.

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References

NZ Herald:  Don Brash tells: Why I played the race card

Radio NZ: Labour accused of playing ‘race card’ over house price bubble claims

Radio NZ: Key denies Auckland housing crisis

Other blogs

Bowalley Road: Chinese Whispers

Dim Post: What we talk about when we talk about Chinese people

Dim Post: The racist style in New Zealand politics

No Right Turn: Sounds like racism

Public Address: House-buying patterns in Auckland

Public Address: My last name sounds Chinese

The Pundit: What’s in a name… and a number?

The Standard: International investment in Auckland housing

The Standard: Twyford Responds

The Standard: China Crisis

Previous related blogposts

Kiwis, Cows, and Canadian singers

That was Then, this is Now #10

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Three Questions to Key, Williamson, Coleman, et al

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301012NZHREtoon

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This blogpost was first published on The Daily Blog on 11 July 2015.

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Labour on farm sales – NOT good enough!

21 October 2011 1 comment

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Full Story

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Labour has stated that,

A Labour government would ensure sales were declined unless potential foreign buyers of farm or forestry land also invested in new processing or other related jobs.Source

Sorry, Mr Goff, but that is totally unacceptable and is merely ‘tinkering’ with the problem.

The sale (or leasing) of our productive farmland means that we lose profits to overseas investors. It means that a foreign owned farm will (a) export their produce (b) make a profit (c) remit much of that profit back to overseas investors, who look for returns on their investment.

It means that New Zealand farmland is priced out of reach of our own people, who cannot hope to compete with Americans, Germans, Chinese, etc. The purchase of the Crafar  farms by Shanghai Pengxin’s over a Michael Fay-led local consortium should ring alarm bells in our heads.  (More here)

Labour needs to lift it’s game on this issue.

There has to be a total ban on the sale/lease of farmland to anyone who is not a New Zealand citizen.  Anything less will ultimately undermine our long term prospects for wealth-generation and prosperity.

We would end up tenants in our own country.

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The Great NZ Sell-Off Continues…

7 September 2011 4 comments

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.