Overseas Investment Rules—Sale of Crafar Farms
Mr SPEAKER: I have also received a letter from the Hon David Parker seeking to debate under Standing Order 386 the Government’s decision to approve the sale of Crafar farms to a foreign purchaser, Milk New Zealand Holdings Ltd. This is a decision that involves ministerial responsibility. Although the decision was actually made on 20 April, it was the subject of an appeal. The Court of Appeal has now found that the Ministers acted reasonably in granting consent for the sale under the Overseas Investment Act 2005 and dismissed the appeal. The judgment was given on 8 August 2012. This is the first time that the matter could have come before the House and it is therefore one of recent occurrence. Given the significance of the matter, I consider it important enough to warrant the immediate attention of the House by way of an urgent debate. I therefore call on the Hon David Parker to move that the House take note of an urgent matter of public importance.
Hon DAVID PARKER (Labour)
: I move,
That the House take note of a matter of urgent public importance. The finding of the Court of Appeal was that the decision was not unreasonable from a
Wednesbury unreasonableness point of view, not that it was a reasonable decision. It was that it was a legal decision, not the right decision. The court found that the Minister for Land Information acted within his powers to approve the sale of the Crafar farms to the Shanghai Pengxin syndicate, but not that he acted reasonably, because that is not its mandate.
I want to talk about what is wrong with this decision. I also want to talk about what is wrong with the underlying problems in our economy that drive the sale of so many of New Zealand’s assets to overseas people. I also want to put on record some of the inconsistent statements that we have had from the Prime Minister and others around these issues. The Minister approved this sale, the largest ever sale of dairy farmland, on 20 April after his earlier decision granting similar approval had been overturned by the High Court because of misapplication of the legal test. The largest ever sale of dairy land to overseas interests is of interest to New Zealanders, and I think it is appropriate that the Speaker—I could not think it inappropriate, but I agree that it is a matter of importance that requires the attention of this House.
Why do I say that and what do I say in support of that? Well, I would look at our history in terms of what has happened to our forestry industry. New Zealand lost large swathes of its forestry to overseas ownership in a very short period of time—
Hon Dr Jonathan Coleman: Approved by you.
Hon DAVID PARKER: Some of them were approved by Labour. Some of them were approved by Labour. What has happened to the forestry industry since then has been analysed by people like Brian Gaynor. Brian Gaynor has found that the loss of control of those assets from New Zealand has led to a smaller portion of the value chain accruing to New Zealand, because the forest owner who does not have an interest in New Zealand is less likely to want to process it in New Zealand and less likely to want to invest in the jobs that add value to New Zealand, and will be more interested in their own profitability in terms of maximising the log price. We in this House should learn the lessons of history. If we do not learn the lessons of history we are doomed to repeat them.
Other lessons in history go back a bit further. New Zealand lost a lot of control of the value from the farming sector in the 19th century when there were high levels—
Hon Member: The early 19th century.
Hon DAVID PARKER: —in the early 19th century when there were high levels of foreign ownership of New Zealand pastoral land. As a consequence, Governments in New Zealand tightened up on those rules for the benefit of New Zealand farming, and that is why we have now got Fonterra, because we have vertically integrated enterprises that have as their foundation New Zealand ownership of our land.
Another reason we should be concerned is that the Prime Minister told us we should be concerned. The Prime Minister, in the last term of Government, when there was public disquiet about the amount of farmland starting to be sold into overseas hands, said he thought that the concerns that New Zealanders had were legitimate. He said that National would tighten the rules in response to that. Well, what did they do? They passed this minor change to regulations and pretended it was going to tighten the rules. The reality is that the discretion of the Minister to approve or decline land sales to foreigners is already very wide. The Minister had ample discretion to decline this application if the Minister wanted to, but he did not want to. He wanted to approve it and that is why he did—because it is ministerial discretion. So when I hear the Minister claim he had no choice, because it was a departmental recommendation, that is nonsense. Indeed, if he took the decision on the basis that it was a departmental recommendation, that would itself be illegal. So when he postures in that way in the media, he knows he is treading a fine line, because it is ministerial discretion.
This Minister has a record of exercising that discretion in favour of applications. In fact, since he has been Minister he has turned down only one application, and that was where the officials found that the applicants were corrupt—
Hon Maurice Williamson: No.
Hon DAVID PARKER: More than one, is it? How many?
Hon Maurice Williamson: About seven.
Hon DAVID PARKER: About seven now. But it is always on the basis that the people who are applying are corrupt individuals rather than the economics of the underlying transactions.
The second-largest sale ever approved to foreign buyers of dairy land in New Zealand was also approved by the current Minister, and that was the sale of a very large dairy farm on the Maniototo in my home province of Otago. Labour disapproved of it. Labour opposed that. We made public our disapproval of that at the time and we were not accused of racism for opposing the sale of big dairy farms in the Maniototo to American interests—in that case, the Harvard University investment fund.
Prior, the largest ever, in land area and value of dairy land, sold to overseas interests was a Southland group of farms sold to European investors. Again, the Labour Party opposed that. Again, in that case the Labour Party was not accused of racism for opposing that particular sale of land to overseas buyers. But when we opposed the sale
to Shanghai Pengxin the Minister accused us and accused other people of being motivated by the fact that the purchaser was Chinese, rather than that the purchaser was of another nationality.
Hon Maurice Williamson: Give us one quote.
Hon DAVID PARKER: You were on record for that. I am sorry, but the record shows that the Minister asserted that people were opposed to Shanghai Pengxin purchasing these farms rather than others on the basis of their nationality, and on the basis of their ethnicity. That accusation was not made in respect of our opposition to the US purchase in the second-biggest sale, or opposition to the European purchase in Southland earlier.
The opposition of the Labour Party is not based on where people come from. It is based on what we think is in the long-term economic interests of our country. More than ever it should be apparent to the National Party that there are huge trade imbalances in the world—enormous trade imbalances in the world. China is running the largest trade surplus we have ever seen of any country ever in the history of the world. Germany has had a trade balance that it has maintained on the back of a euro that is suppressed because of problems in the Mediterranean border States, which have acted to pull down the euro and keep up the exports of Germany, because they have had a trade advantage because of their exchange rate.
We have had other countries manipulating their exchange rates. We have these massive trade imbalances in the world, meaning that countries that are in trade deficits are funding those deficits through borrowing more money from overseas and through selling our assets, which were New Zealand - owned, to foreign buyers. Those are the only two ways you can pay for a current account deficit. Yet we have this Government ignoring those realities and saying: “Look, we should just let all of our assets be available to be purchased by the highest bidder.” That is just wrong. There is no economic upside to New Zealand selling these land-based assets. We are already the most efficient farmers in the world. We are not going to increase the farm output of these farms. Indeed, that was one of the reasons why the High Court upheld the appeal in the original decision, which was turned over—
Hon Maurice Williamson: Wrong. You’ve got it wrong.
Hon DAVID PARKER: It was. One of the reasons was that the High Court was not convinced that the additional investment that was going to be made in these farms and would increase productivity would not have been made by a New Zealand purchaser. We know that New Zealand purchasers of farms increase productivity. That is how we have increased our dairy output. That is how Fonterra has thrived. We do not need foreign purchasers of those assets to increase the output of those farms. Indeed, it is clear that the output of these farms would have gone up whoever purchased them, and New Zealand’s output as a country will not go up as a consequence of these farm purchases.
Even trade access into China is not vastly advantaged through this. We already have a free-trade agreement with China, which gives us access to that market. So that is not a huge advantage from these transactions.
The downside is that the future value from our farming sector, if we sell it overseas, goes to the foreign purchaser. That is a drain on our resources. Over time we see the hollowing out of the New Zealand economy. We see this in a rising current account deficit. A substantial part of our current account deficit is now profit flows, dividends, interest being paid to overseas lenders, and profits being repatriated to foreign owners. We will not get out of this loop with these sorts of policies, because this sort of sale makes it worse.
There are non-economic reasons why we should not be selling these assets. I want to live in a country where successful New Zealanders who work hard and save hard can buy our assets. I do not want all of our assets priced on an international market. Some assets should be priced internationally; some should not. I do not want New Zealand to be a country where a sharemilker who works hard for decades and saves cannot afford to buy a farm. I do not want the only people who can buy farms in New Zealand to be people who either inherit large amounts of wealth or bring wealth from overseas.
We are seeing the globalisation of trade. We are seeing the equalisation of prices for a lot of commodities, and we are seeing the averaging down of a lot of labour costs for labour-intensive goods, but we are not seeing asset equality. In fact, we are seeing asset and wealth inequality grow around the world. If New Zealand opens itself up to those forces without protecting our asset base, we do New Zealanders a disservice. Nowhere is this clearer than land. You know, we have got countries overseas that for centuries have had far less egalitarian settings than New Zealand’s. They have had lower rates of tax. They have had higher rates of division. Yet the beneficiaries of those settings in those countries are hugely wealthy compared with New Zealanders. Added to that we have got the State-based control of enormous surpluses in some countries, and China is the obvious example of that. Those two factors combined mean that we are, unlike any moment in our history, at risk of overseas people being able to outbid New Zealanders for our assets, and that is not the sort of country that I want to live in. I do not think it makes much difference to the economic output of New Zealand. I do think it increases our current account deficit over time. But it is almost as important to me that I live in a country where people can afford to own our own country.
This Government should be concentrating on what fixes that problem. It is the changes that we need to our investment signal through a capital gains tax. It is deeper savings, so that there is more capital to invest in our manufacturing, in our processing of our forest products, in our fisheries, and in the high-value manufacturing sector. We need more money in that sector through higher savings, and we need the money directed there instead of into speculation. The means to direct it there is a capital gains tax to remove the tax bias that currently puts investment in the wrong place. We need a research and development tax credit. What we do not need is to sell ourselves off to overseas countries for no good reason—no good reason at all.
China does not let us buy its land. Yet we are saying we should have to sell our land to it. This is wrong. It is not about China; my same logic applies to other countries that do let us buy their land. I personally do not think we should sell our rural land to overseas countries. Neither do I think we should sell our infrastructure with monopoly characteristics. It is really important for the functioning of the—
Hon Dr Jonathan Coleman: Why have you changed your view?
Hon DAVID PARKER: What is that?
Hon Dr Jonathan Coleman: Why have you changed your view, because you sold off all the—
Hon DAVID PARKER: Actually, I turned down the sale of Auckland Airport to Canadian interests, so I will stand on my record. And, actually, I also turned down a dairy farm at the end of my tenure. The world is changing, and if people cannot change as the world changes, how moribund would democracy be? We may as well not have it.
I am firmly of the view that it is not in our interests to sell our rural land, nor our monopoly infrastructure. It is a symptom of a malaise in New Zealand, which is that we do not export enough to cover the cost of our imports and interest. Those are the problems that should be solved. Those are the problems that if solved will raise incomes, will give job opportunities, and will stop those thousands of New Zealanders leaving to Australia.
Hon MAURICE WILLIAMSON (Minister for Land Information)
: Having the Labour Party calling for a snap debate on the sale of land to foreigners is really like a turkey calling for an early Christmas. It is just like mother’s milk for the National Party, because, frankly, we on this side of the House should be ashamed of our performance relative to Labour’s. During its time in office, when David Parker, who has just spoken, was the Minister for Land Information, over 9 long years that party approved the sale of 665,000 hectares of land to foreigners—665,000 hectares of land to foreigners. Yet somehow the National Government, which has been in power for 3¾ years and has approved just on 100,000 hectares—that is one-sixth; actually it is more like about a seventh of what Labour did when it was in office—is all wrong, evil, disgraceful, and just outrageous.
How many New Zealanders remember Shania Twain buying the South Island high country estate? Right. How many people remember the then Labour Prime Minister, Helen Clark, walking the track of the land with Shania Twain and welcoming the purchase? Right. Let us get some things into perspective here. The total Crafar farmland area was 7,000 hectares. If anyone wants to get that into perspective, it is about the size of a playing card on Eden Park as a percentage of total New Zealand land. So when you sit up in your stand in Eden Park watching the All Blacks play, and you see a little, white dot somewhere down on the field, and you zoom right in on to it and you find it is the Queen of Hearts, that is the equivalent piece of Crafar farmland relative to total land mass. Shania’s Twain’s land was 53,000 hectares—53,000 hectares was sold to Shania Twain. Was she a foreigner? Oh well, she is from Canada. She now lives in Switzerland, I think. She split the farm up with her ex-husband, and he now takes control of it, or whatever. But Helen Clark walked the track, was absolutely proud of the Labour Government having sold this off to Shania Twain, and there were so many other sales of land that occurred under that party’s administration.
Now it comes time to look at the process. The process was put in place not by the National Government but by the Labour Government. As the Minister for Land Information I have to work under an Act called the Overseas Investment Act, which was passed in 2005 by the Labour Government. I am bound to act under that Act. I know that David Parker wants Ministers to break the law, but I have got some news for him. The advice is that if you do not act accordingly under the Act and the instructions that the Act and the regulations give you, you are subject to judicial review, and a buyer could easily say: “Well, I think the Minister has breached the intents of the Act and the regulations.”, take us to judicial review, and the courts could easily find that Ministers have acted outside of it.
David Parker is wrong on a number of counts. First of all, he said that we only rubber stamp the advice we get. Well, let me give the member a good example. Officials recommended that the Government say yes to Kim Dotcom’s buying of the Coatesville mansion. That is the official advice that Ministers received, but we declined it. In a number of cases, when we did not think they were valid buyers of that land, such as Natural Dairy, when it was wanting to buy it—that is the consortium headed up by May Wang—we declined it. We said no. But when my officials brought to me the advice about the Shanghai Pengxin bid, it is just impossible to go down the list of the criteria and not be impressed. First of all, what an incredibly successful company and companies Shanghai Pengxin is and has run. What a number of various industries, including retail, construction, and agribusinesses, that company has run. When I hear people like Winston Peters saying: “Oh well, Shanghai Pengxin doesn’t have any experience of dairy farming.”, well, let us have a look at it. Allan Crafar did, and how did he go, running the place? OK. He knew how to milk a cow. Was it a successful operation? I am not so sure. I agree that the principal owner of Shanghai Pengxin may
not have put on the cups—washed down the udders and put on the cups. I agree with that. But he has proven that he has a very successful track record in agribusiness, along with a number of others.
Then there was the good-character test. In many cases it is quite easy: you have someone who has a bit of a dodgy background or who has convictions, or whatever. This was a clean slate—a clean slate for a good-character test. So you could not do it on that. Then we get to the economic acumen. In the past, and I want members to really focus on this, Ministers, since the Act was put in place, have always used the “before and after” test—that is, what would be the value of this asset before the investment was made, and what will be the value of this asset after? That is the test that David Parker used over and over again, because I have checked with the officials who were the same officials who worked under Labour. We always use the “before and after” test. But somehow, a High Court judge told us we were wrong. Justice Forrest Miller said: “No. Ministers have misdirected themselves and should not use a ‘before and after’ test. They should use a ‘with and without’ test.” They should ask what is the value of the asset with this investment, and what would be the value of this asset without the investment being made?”. It is quite difficult to do, because the “without” is billions of combinatorics. Who knows what would happen to the asset without the investment? Who knows? It could be the best dairy farmer the world has ever seen who buys it, and it might be the most flourishing set of farms ever, or it might be another Allan Crafar who buys it, or anything in between. But we took the advice of the High Court. We went back and we applied the “with and without” test. After being challenged again in the Court of Appeal, I am delighted to say the Court of Appeal found in favour, that Ministers had acted properly, and had approved the sale under the Act.
Let us get it quite clear. This Act was put in place by Labour, so you cannot start blaming the National Government for the Act, and, indeed, you cannot even blame the National Government for the regulations in place, because National added some more. We did not delete any; we left all the regulations that are under the Overseas Investment Act in place, and added two new ones, after we did a review. One was an economic interest test—factors allowing Ministers to consider whether New Zealand’s economic interests are adequately safeguarded and promoted. That was the first extra test we added. A second one was a new mitigating factor that enables the Minister to consider whether an overseas investment provides opportunities for New Zealand oversight or involvement. Well, this one does. This is going to be a joint partnership with Landcorp. Landcorp is going to have a lot of its expertise involved in that.
Now I get to the point that I find really laughable. We are supposedly now selling off all our country. You listen to Russel Norman from the Greens, who himself has come here only recently from Australia, so I find it a bit rich that he is saying we do not want foreigners to take over our land. But you listen to Russel Norman and you would think that the vast bulk of this country now lies in the hands of foreigners. I can do nothing but thank the
because it did a fantastic, big exposé of this a couple of weeks ago, in July, in which it showed a huge piece of the pie. It asked how much land foreigners are gobbling up. Most people say that it is most of our country. We are becoming tenants in our own land. It is all going.
Hon Phil Goff: That was the Prime Minister who said that.
Hon MAURICE WILLIAMSON: No, the Prime Minister said he did not want to be a tenant in his own land, so let us get the facts right. All that the Terralink International database got used for was to show that of the total farmland, the total rural land in this country, 1.5 percent is owned by foreigners. By the way, what is really interesting, if you follow this, is that in many cases what was a foreigner turns into being a New Zealander, because a lot of people who buy the land as foreigners then take
out citizenship. I have got a number of examples who are now New Zealand citizens, as I presume Russel Norman is because he is able to stand for Parliament. Therefore, he could have bought something as an Australian, but now he has become a New Zealand citizen. I have seen that as well. So I would really like to know what the definition of a foreigner is. It may be someone who came from overseas, but now holds citizenship. But I repeat, for anybody who wants to look at that article—it is a very good article showing both the North Island and the South Island graphically—that 1.5 percent of all rural farmland in this country is owned by foreigners.
Let us go back and get a recap, because again I cannot believe Labour called for a snap debate on this.
Hon Phil Goff: I think you’ve made your point.
Hon MAURICE WILLIAMSON: Well, no I have not made the point enough. I want to make it more times than once—I really do. I know that Labour thinks I made the point. There were 665,000 hectares of land sold under Labour. Remember, Crafar’s was 6,000 hectares, so it is about 1/100th of what Labour approved for sale. There you go. There is a good number. The total 16 Crafar farms added together come to 1/100th of the land area that Labour approved for sale to foreigners. Boy, does that put it in perspective. I think that really puts it in perspective. It is no wonder that Labour does not want us to carry on. I think we should move an extension of time in this debate, because we are loving it. We are loving having a debate on the sale of land to foreigners.
I know what Labour members are going to do—I know exactly what they are going to do. They are going to do what they did with the sale of assets. They are going to say: “Oh, we got that wrong. We got that wrong. You know, we sold Telecom and we sold a whole lot of assets, but we were wrong.” Now I hear today about Housing New Zealand Corporation: “You haven’t done any maintenance on this, and you haven’t done any on that.” Then Phil Heatley, the Minister of Housing, got up and said: “This is how much maintenance we’ve actually done, and compared with you it’s huge.” Then Labour members go: “Oh, we got that wrong as well.” You start wondering how many times can Labour actually run the line that it got it wrong until New Zealanders say: “What did you ever get right—what did you ever get right?”, because, again on foreign ownership, Labour says it got it wrong. It should not have sold all that land. It should not have sold that land to Shania Twain. I notice Labour members never said a mutter, not a murmur, not a whisper when James Cameron came in to buy some land in the Wairarapa recently. Oh, he is a good guy actually, this James Cameron. He is a Canadian. He is not a foreigner. He is a Canadian. Not a mutter, not a murmur, not a whisper about James Cameron—oh, no. The Swiss, the German, the British, the French, and even the Australian buyers have come in here, without a mutter, not a murmur, not a whisper. I say to my colleague Raymond Huo, who I think is the shadow for me in this portfolio, that he needs to speak up. He needs to speak up a little bit about how poor this decision—
Hon Dr Jonathan Coleman: I didn’t think he was still in Parliament.
Hon MAURICE WILLIAMSON: No, he is. He is still in Parliament. That is him over there. He is my opponent, I believe, in the land portfolio. He is the land information spokesman. I think I might have got this wrong. I think I might have got this one wrong. But I did not hear a mutter or a murmur or a whisper from him about his own ethnic community, because we need foreign investment in this country. New Zealand cannot function without foreign investment.
There was a very, very good article in the
New Zealand Herald
of about 2 years ago that was written by Gareth Morgan, and I think it should be compulsory reading for all New Zealanders, because it said that while we continue to spend more money overseas
than we earn, and foreigners are left with a surplus of that transaction in their hands, there are only two things they can do with that surplus. They can dump that money on the junk bond market and send our dollar to 1c, or they can do what just about anybody in this room would do. They would buy an asset with it. As Gareth Morgan said, those people in this House today—and, I think, all those people in the country—who are opposed to foreign investment should tell us how on earth you have got a plan for New Zealand to stop spending more than it earns, because I do not envisage that happening in my lifetime. I do not envisage it happening in a fairly long time. I wish it would. I wish we were a more prosperous nation, and that New Zealanders’ spending appetite was not so voracious, but, I am sorry, Gareth Morgan is right. Foreign investment is actually going to help this nation. Some of the investment made by Shanghai Pengxin will bear fruits as we get better penetration into the Chinese retail market by partnering with companies like that. I just repeat again—I am almost having to go and get a bit of a reality check here—I could understand why, say, the Communist Party of New Zealand would be opposed to this, although I do not know what its policy is—
Todd McClay: The Greens?
Hon MAURICE WILLIAMSON: No, the Greens have not been quite that consistent, either—there have not been a lot of words about some of it—but others have. But when a party that was in Government for 9 long years sold six-and-a-half cum seven times as much as the National Government did, all I can say is that my gast is really flabbered.
Dr RUSSEL NORMAN (Co-Leader—Green)
: I rise to speak in this urgent debate around the Crafar land sales. I think this debate does raise some critical issues about economic policy for New Zealand. One of the critical issues is what to do about land. It is certainly true that the previous Labour Government approved the sale of a large amount of land into overseas ownership—the figure of 660,000 hectares. It is certainly true that this current Government has approved the sale of about 230,000 hectares since it has come into office. Since then, I am pleased to say, Labour has had a change of heart about this issue. I think there is nothing wrong with that. It is very strange that the Minister for Land Information should suggest that a party could change its mind and that that is a bad thing; actually, it is a good thing.
What has fundamentally changed in the global environment around land is that food security is becoming a critical issue globally. If you do not understand that fundamental reality of green economics, then you will not understand this debate. The fundamental reality is that all around the world there is enormous pressure on food security, and there is enormous pressure on food prices. We have seen big spikes in food prices. That has led many countries, Governments, and corporations to focus on buying up land, so globally we have seen the big land-grab, as it is called. We think—and the numbers are a little bit hard to get—that probably in the last decade we have seen that about 2 million square kilometres of land has been grabbed. That land has been grabbed by Governments, like the South Korean Government, and it has been grabbed by corporations. A lot of the Gulf States are very focused on food security, so they have been buying up very large amounts of land. All of those Governments and corporations are very focused on buying land in order to maintain food security. It is a global phenomenon. You can read about it in
New Scientist, although I cannot imagine that Maurice Williamson would ever read a science magazine. You can read about it. You can read about it there. Fred Pearce wrote an article about it. You can read about the global land-grab that is under way at the moment.
That is happening because of resource constraints. Resource constraint is one of the fundamental ideas within green economics; it is one of the key drivers of what is happening to land prices and food globally. The other one, of course, is climate change.
As the effect of climate change starts to happen, what we are seeing is pressure on food-producing systems and access to water. Of course, as global populations grow and get more wealthy, land that can produce food is becoming more and more valuable. This is a global phenomenon. New Zealand land tends to be more expensive than land in other countries, so our land has not been at the top of the list for the land-grabbing, but there has been a significant amount of land that has been purchased in New Zealand, and, of course, the Crafar farms deal is just a part of that.
We need to actually take into account that global reality when we are setting our policy around foreign investment in land. Do we think that it is the right strategy to allow our land to fall into overseas investment? I would argue that it is a very poor strategy. Effectively, this land is the goose that lays the golden egg. Our economic strategy—I think a smart Green economic strategy—is to sell the golden eggs rather than sell the goose. However, the Government, for short-term economic reasons, wants to sell the goose. It is asking how it will fund the current account deficit. There are only two ways to fund a current account deficit: either you borrow more or you sell assets to overseas owners. What the National Government wants to do is sell more assets to overseas owners in order to fund the current account deficit, and it wants to borrow more. We have seen that Government borrowing has gone through the roof. This Government has borrowed a huge amount. It is one of the biggest-borrowing Governments we have had in generations, actually. So in order to fund the current account deficit, what the Government proposes to do is sell off the remaining assets. We have sold off large amounts of capital assets, when you think of the foreign dominance of the New Zealand Exchange. One of the last great assets that we can sell in order to pay for the current account deficit is the land. So what this Government is doing is saying: “Yes, open door—you can buy the land. That is how we are going to fund the current account deficit.”
I would argue that that is a very, very short-term strategy. It is a much more sensible strategy to hold on to the land and use that as the base for our economy—that is, sell the produce from the land. Sell the golden eggs, rather than the goose. But this Government is intent, it would appear, on going down the track of selling more and more land into overseas ownership.
That is part of a global trend, so it is not surprising. All around the world Governments are grappling with exactly this problem. There are Governments like ours, which have large amounts of land in Africa and elsewhere, and large foreign corporations—in this case, it is a Chinese Government - backed corporation, Shanghai Pengxin—that want to buy food-producing land in order to send food back to their domestic market. That has produced enormous tension in legislatures like this one all around the planet.
That is why the Greens have introduced a bill in my name to actually restrict the purchase of land into overseas ownership. We would amend the Overseas Investment Act so that in respect of sensitive land, which is defined within the Act as 5 hectares or more of rural land, you cannot allow that land to go into overseas ownership. It is a simple amendment to the Overseas Investment Act, and the purpose is very simple—that is, to keep the land in New Zealand ownership, because that is a fundamental aspect.
During this debate, of course, the Government has used personal attacks to attack anyone who disagrees with it. We have just had Maurice Williamson, the Minister, attacking people on the basis that they are migrants to New Zealand. The Minister attacked me because I am a migrant to New Zealand, and he said that somehow that means I am not allowed to speak in this debate and that I do not have a valid position. Well, I would say to the Minister that I am proud to be a migrant in New Zealand, and I
would say to all other migrants that they should be proud. Do not listen to the National Party—
David Bennett: Ah, you’re rubbish.
Dr RUSSEL NORMAN: —when the National Party attacks people for being migrants in New Zealand, and when David Bennett attacks people for being migrants in New Zealand. Do not listen to them. You are welcome here. We welcome migrants to New Zealand. We are very pleased to have a society where migrants are welcome. And we believe that land should be kept affordable so that every person who lives here—a permanent resident or a citizen—can afford to buy land here.
What will happen if we have an open-door approach to foreign ownership of our land is that the price of land will get to a point where most New Zealanders cannot afford to buy it. The family farmer will become a figment of history, an aspect of history, because family farmers will not be able to afford land. If you look at the most recent case, which we are debating today—the Shanghai Pengxin case, around the Crafar farms—Shanghai Pengxin had such deep pockets that it could outbid Michael Fay. Michael Fay is an extremely wealthy New Zealander, and he was outbid by this Chinese Government - backed corporation.
The reason is that the Chinese Government has more than US$2 trillion, which it is trying to turn into assets, because sitting on US dollars when the US Government has the ability to print unlimited amounts of dollars is a very poor strategy. So the Chinese Government and other Governments, very wisely, are trying to turn those cash assets into real assets, and buying up land is a critical part of that strategy. That is why they are able to outbid people like Michael Fay, and they will certainly be able to outbid family farmers. So if there are family farmers who have aspirations to buy their own farm, they will be outbid by foreign corporations, because as land becomes more and more valuable, those corporations will focus on buying up food-producing land, particularly food-producing land with access to water. That is the fundamental reality, and that is because we live within a resource-constrained world where food-producing land will only become more and more and more valuable. Large corporations and foreign Governments will target food-producing land because they are concerned about the price of food and food security.
That is why we think it is essential that we protect that land. It is a fundamental economic strategy, but it is also a fundamental social justice strategy. People should be able to afford to buy the land in the country they live in. If the price of land is driven so high that even Michael Fay, one of the wealthiest New Zealanders, cannot afford to purchase the land and is outbid by Shanghai Pengxin, an overseas corporation backed by a foreign Government, it means that ordinary family farmers will not be able to afford to purchase land. That is what National is proposing. What National is proposing with its strategy of an open door is that ordinary family farmers will not be able to buy land in New Zealand.
Our view is that ordinary family farmers should be allowed to buy land in this country. We can achieve that only if we restrict overseas ownership of land, because the overseas ownership of land will drive the price out of the reach of ordinary New Zealanders, and it will be only the large conglomerates, large international corporations, or large Government-backed organisations—and the Gulf States are very active in this space—that will be going around the planet purchasing land. I have no idea whether National is aware of this or not, but this is a global phenomenon being driven by resource constraints.
The smart Green economic strategy is to hang on to these assets, to hang on to the land, because food-producing land over time will only become more valuable. It is intimately connected to New Zealand’s economic advantage overseas, which is clean,
green, and safe. Clean, green, and safe is fundamental to the New Zealand brand; it is why we are selling large amounts of dairy into China at the moment. So maintaining land—maintaining it in New Zealand ownership—is fundamental to New Zealand’s long-term economic future. That is why I have my bill before the House, and that is why I urge all members to vote for it.
DENIS O’ROURKE (NZ First)
: New Zealand First has consistently always opposed the sale of farmland to foreigners. We are very glad to see that the Labour Party now also adopts that policy. I want to give a number of reasons for this. Firstly, it causes an inexorable rise in farm prices in New Zealand. Foreigners, of course, are not—
Dr Russel Norman: I raise a point of order, Mr Speaker. We have constant interjections down this end from David Bennett, over here. The interjections include such things as accusing my colleague of being a liar and various other things. Interjections should not be constant yelling and pointless yelling across the Chamber.
Mr DEPUTY SPEAKER: Well—
David Bennett: Mr Speaker, that’s simply not true.
Mr DEPUTY SPEAKER: I do not need any assistance. This has been quite a spirited debate, and I know that when the Hon Maurice Williamson was speaking that created quite a bit of interjection and comment as well. It has been a spirited debate. I wish that all members would show some courtesy in this House, and I would caution members that it is an opportunity for debate and for listening to each other, and interjections should be rare and reasonable.
DENIS O’ROURKE: I actually did not hear any interjections, anyway. But I will repeat what I said at the beginning. First of all, New Zealand First has consistently always opposed the sale of farmland to foreigners, and we are glad to see that Labour has now followed that policy as well. I was beginning to say that there are a number of very good reasons for this. Firstly, farm prices cause an inexorable rise of prices for farms, especially for the best farmland in New Zealand. Foreigners, of course, are not financially constrained in the way that many New Zealanders are. So that, of course, leads to a significant disadvantage to people in New Zealand who want to embark upon a farming career. This is driven by a shortage of quality farmland overseas, and we do not want to impose and import that problem into this country. Foreign buyers are, for those reasons, hungry for fertile, well-watered land in the temperate zone, such as particularly in this country.
New Zealand First would impose strict restrictions on foreign ownership of farmland, and we would impose the same sort of restrictions on foreigners that Kiwis face if they want to buy farmland in other countries. In relation to this, as I have already indicated, is the asset that this country has in abundance: fresh water. Water claims and water resources, of course, are closely related to the value of farming, and are closely related to why so many overseas buyers want to buy farms in New Zealand. New Zealand First strongly opposes the sale of all strategic assets, especially farmland and especially related water resources. We are opposed to any particular group gaining exclusive rights to what is essentially a public resource. Issues affecting the country’s fresh water, as well as farmland, should be considered from a national perspective.
Another reason for opposing the sale of farmland overseas is that it does mean that New Zealand farmers are deprived of the opportunity to buy farmland at reasonable prices. It effectively does do that, because it drives farm prices up and inflates farm prices. We must not see a bidding war for farms in this country driven by overseas purchasers. Included is an opportunity to develop further the New Zealand farming culture—a farming culture of great success, and a farming culture of innovation. There
is every possibility that that will be damaged by overseas farmers who are not part of that culture, and do not have the best interests of New Zealand farming at heart.
Furthermore, another reason is a loss of New Zealand’s economic sovereignty. The sales of farms—the sales of such a strategic asset—do, if they go unchecked over time, mean that we become tenants in our own land, and we lose sovereignty over our destiny in the long term. Economically, it is very difficult to see what the benefit is of allowing the sale of farmland overseas. Overseas investors in New Zealand can still invest in other ways. They can finance New Zealanders into farms with loans and with other economic instruments.
Another reason is that the economic reasons given by the Government for allowing this are utterly and completely inadequate. I note, for example, that the Prime Minister, when justifying the sale of farmlands overseas, said on one occasion: “Overall we’ve believed … that yes, the bid by the Chinese company can add value and allow us to have good distribution into China.” That, of course, is an utterly inadequate reason why we should allow the sale of New Zealand farmland overseas, because access to the Chinese market is simply not dependent upon Chinese farm ownership in this country.
The competence of overseas owners is another issue. We do not know, if this goes on unchecked into the future, what sort of competence overseas owners of farms in this country will have. It is all very well for the Court of Appeal and others to say that, as at today, this overseas purchaser looks like a competent farmer, but when they sell to other overseas people, or when they go ahead and farm these properties over time, how can we be sure that they will be as competent as we know New Zealand farmers are? It is not necessarily a situation that will endure.
The last reason I want to give as to why we should be so opposed to the sale of New Zealand farmland overseas is simply this: there is no guarantee that large overseas corporations will not, through successive purchases of farmlands, aggregate farmland, one farm after the other, and become so dominant that they effectively control a significant part of New Zealand’s economic resources.
In conclusion I say that the loss of these particular properties is a black day for New Zealand. These farms will be gone for ever. What assurances have been received?
Hon Dr Jonathan Coleman: Where are they taking them?
DENIS O’ROURKE: You can hear some of the caterwauling from the other side of the House, which, like those assurances, are empty words with absolutely no real value in them whatsoever. I might say that the vast majority of New Zealanders do not see any value in those assurances. They know in their hearts, and from what they have heard, that the sale of these assets of New Zealand farmland overseas cannot ever be in the interests of this country. And I say further that after all the controversy, this Government still refuses to act to protect the national interest—with a small “n”, of course. It may be a National interest, with a large “N”—I am not sure of that—but it is certainly not a national interest with a small “n”.
New Zealanders have a special connection to their land, and that land is being alienated. Who will defend that land in the future? It is certainly not this Government. This Government is leading this country down the road, ultimately, to impoverishment, by selling farms to overseas farmers whose performance in the long term we cannot be sure of, and whose agenda we ought to have the greatest possible suspicion of.
The New Zealand Overseas Investment Office is itself a joke. In fact, it is worse than a joke; it is a fraud. It simply rubber-stamps the transfer of assets into foreign hands. I have had personal experience of this in my work in the past as a lawyer. I have acted for purchasers of farmland, and have acted for them in terms of applications to the Overseas Investment Office. I can tell you that its process is utterly inadequate, and it is, in fact, virtually a rubber stamp. You cannot put important assets of this kind into the hands of
an organisation like that. The New Zealand First position is clear: stop the sale of strategic assets, especially farms, and stop compromising New Zealand’s economic sovereignty in this way.
Hon DAVID CUNLIFFE (Labour—New Lynn)
: It is good to be back. I have just got back in—[Interruption] It is good to be back. I have just got back in this weekend from a few weeks overseas. There is nothing like seeing New Zealand from 10,000 miles away to understand, with a bit more perspective, the problems that we have.
Why are we debating the issue of the Crafar farms? Because it is an emblem of a much deeper problem. It is a problem that ordinary New Zealanders out there understand. What they think is wrong is that a New Zealand Government - owned entity called Landcorp, instead of running New Zealand farms, is going to become a tenant for a subsidiary of the Chinese Government, which is going to own a whopping great chunk of New Zealand prime farmland, and that this National Government is selling New Zealand pound by pound, hectare by hectare, and there will be nothing left.
Underneath this there is a real choice. From a long distance it is really obvious. New Zealand either has to pay its way in the world by increasing the value of what we sell, or we follow the kind of road that members opposite are advocating, which is just to ship a greater volume of raw materials, and when that does not work, actually sell the land it came from. What a terrible admission of failure.
Everybody knows, when you go overseas, that New Zealand is a great farm. It is great at making protein, fibre, and some of the best food products in the world. We can be really proud of that, just like we are of our soldiers who fought to retain this land, and just like we are of our Olympians, who have done us proud. But if we are so great at the things that farms produce, why would we not want to add value to that production and retain that farmland, rather than, as Dr Russel Norman said, sell the goose that lays the golden eggs, and sell out the underlying land itself?
I see that that Minister, Mr Williamson, has been carping away. Let us just get a few things straight. His first contention was that Labour is anti-Chinese. That is absolute rubbish. Labour’s policy is blind to country of origin. It applies across the board evenly to any investor from any overseas jurisdiction, and in no way is it anti-Chinese. Indeed, it was Labour who signed the historic free-trade agreement with the People’s Republic of China, and we are pleased to see investment and trade increasing under that framework, but not at the expense of selling out our birthright.
The Minister has said that Labour is anti foreign direct investment. That is absolute rubbish. I agree with the Minister that New Zealand is not paying its way in the world. The question is how we get there. The answer is that we want the investment that allows us to do better, and we do not want the investment that simply takes away our future potential by selling the land that it comes from.
The Minister’s next argument was that Labour members cannot talk about this, because some land was sold under them in previous years.
Hon Maurice Williamson: Some land?
Hon DAVID CUNLIFFE: There is the Minister, like a little jack-in-the-box, popping up again. Here are some numbers that the public out there can get their heads around. In 2008, the year that the Minister came to office, and a black year for New Zealand, admittedly, there were 828 hectares of farmland sold overseas—828. The Crafar farms deal alone is 7,892 hectares. That one deal—7,892 hectares—is roughly 10 times everything that was sold in the year that that Minister came to office.
Labour wants New Zealand to prosper. We want New Zealanders to get good jobs. While I have been away, the unemployment rate has gone up again. So, National, something is not working. Whatever you think is your plan, it is time to think again, because just milking more cows, digging up more of Southland, and selling off the land
and selling out the whenua is clearly not getting people back to work. What happens if you sell your house to pay a mortgage, and then end up renting for more than you were paying? You get poorer, right? You get poorer. That is what we are doing. We are selling the farm and renting it back, and over time we will be poorer because we will have paid more. In the jargon, the current account deficit will go up. That is why our foreign debt is going up, and that is why we are getting poorer year by year.
The Crafar farms decision was a poor one. Labour has a member’s bill in David Shearer’s name aimed at a better framework for foreign investment.
Mr DEPUTY SPEAKER: By agreement of the parties, the next two 5-minute calls have been merged to a 10-minute call.
Hon Dr JONATHAN COLEMAN (Minister of Defence)
: It is great to be able to take a call in this debate. What a revelation this has been this afternoon. It has been really quite fascinating to hear the views across the Parliament on foreign ownership of farmland in New Zealand. I mean, we have had the unreconstructed Marxists from the Green Party telling us about the ways that we are going to turn round New Zealand. They say it is sell assets or borrow more, but they never actually talk about selling more overseas. The focus is very myopic from the Green Party. I just had this vision there of Russel Norman standing there with a pitchfork in medieval garb, taking us back in a very Luddite fashion to the days of peasant farming.
Then, of course, we had New Zealand First. Boy, did we have some crackers from Mr O’Rourke—a few “O’Rourke-isms”. He told us that farm prices cause an inexorable rise in farm prices. He then went on to say that we are in danger of losing sovereignty over our destiny. He told us that the land is being alienated, and he finished up—we wanted just one more “O’Rourke-ism”—by saying that you can put the hands of assets into the hands of foreigners. I do not know what that means, but what I can say is that Mr O’Rourke does not seem to be in favour of a big vision for growing New Zealand, for looking outwards, for engaging in the world, and for actually earning our income by raising export levels. That is what this Government is about. It is looking out to the rest of the world. It is saying that, hey, our future is out there. Our future is selling things to Asia. It is about partnerships. It is actually about producing more. It is about looking strategically. It is not about having that myopic “little New Zealander” vision that we have heard expressed by the Greens and by New Zealand First.
I can tell you that the real doozy, and it is great to have him back, is having David Cunliffe here. I think it is just fantastic that he is here to add to this melting pot of Parliament once again. He is clean-shaven, ready for the leadership challenge. He has just delivered that leadership-challenging speech, and you can tell by the look on the faces of his colleagues over there that they are very unhappy to see that man back. What it means is trouble. It means trouble for David Shearer. It means trouble for their caucus. It means more self-hatred, and more tearing each other apart. It means more distraction, and more talking about issues that mean nothing to New Zealanders. It means bad news for the Labour Party. But, of course, that is great news for the Government. So, Mr Cunliffe, welcome back. But what was really interesting about his speech was that he has been a convert to that “little New Zealander” view expressed by the Greens and New Zealand First. I do not know what has happened in the last few years, but David Cunliffe has completely turned his view round. He was part of a Cabinet that over 9 years approved 665,000—
Scott Simpson: How much?
Hon Dr JONATHAN COLEMAN: I cannot believe it—665,000 hectares of land to be sold into foreign hands. Now he is saying that is a bad idea. It is a bad idea, according to David Cunliffe. Well, there is a word for that. We know that word. I do not know how he can get up and say that with a straight face, because we know David
Cunliffe does not believe that stuff. [Interruption] Yes. His heart is not in it. But what he does believe in is causing trouble in the Labour Party caucus. We know already that he has got no mates there. In the Labour Party, you can choose your friends but you cannot choose your colleagues, and they are stuck with David Cunliffe.
But what was even more interesting was having to listen to David Parker. He was the Minister for Land Information for most of those 9 terrible years of the Labour Government—yes, David Cunliffe has given me the wink. He knows that we are right on the button. He is happy because his name is up in lights. But back to David Parker, who was the Minister who approved the sale of hundreds of thousands of hectares of land to foreign interests.
Hon Maurice Williamson: Did he?
Hon Dr JONATHAN COLEMAN: Well, Maurice Williamson said “Look, it’s only 1.5 percent of all arable land in New Zealand.” David Parker today came out so strongly, I just could not believe it. When I looked at his record—
Mark Mitchell: What did he say?
Hon Dr JONATHAN COLEMAN: Well, he was saying that it is a very bad idea, you know, and that we are never going to get ahead by selling foreign land. And he was very critical about the 7,000 hectares—7,000 hectares—of land that Maurice Williamson and I approved the sale of. So I thought I had better go and have a look at his record. It was absolutely incredible, because David Parker had been talking about how the forestry industry was being gutted by sales of land to foreigners. I thought that this was pretty interesting. I looked at this and, would you believe it, David Parker was the Minister who approved the sale of 240,000 hectares of freehold forestry land to Hancock Natural Resource Group.
Scott Simpson: How much?
Hon Dr JONATHAN COLEMAN: It was 240,000 hectares. I think that must be 240,000 hectares in one transaction. The purchase price was more than $1.5 billion. Now, Andrew—the guy from Taranaki—is having a smile there, because, of course, he is not a big fan of David Parker. So they will be able to get back and do some more backbiting and bitching in the caucus room about this. That was amazing, but that was just one transaction. That was on 18 October 2006. That was not all. We then go on to the second one—and this is, frankly, only five transactions we are going through, out of dozens and dozens that David Parker approved. Ernslaw One Ltd, a Malaysian company, on 31 March 2008 purchased 13,955 hectares of land for $117 million. It is incredible. David Parker signed that one off as well. But it gets worse. [Interruption] No, look, it just keeps on getting worse. He then went and approved the sale of 78,000 hectares of freehold forestry land. As he told us—
Scott Simpson: How much?
Hon Dr JONATHAN COLEMAN: —78,000—he is very, very opposed to the gutting of the forestry industry through the sale of land to foreign interests, yet that was sold for $130 million on 29 June 2006 to AMP in Australia. Anyway, he did not stop there—he did not stop there—because he was just warming up. Ōtamatapaio Station, which was a 5,568 hectares freehold sheep and beef station—well, that is actually a small transaction by David Parker standards, but he flogged that off. It was actually purchased for a price of just $1. For $1—would you believe it—it was purchased from the Crown, and signed off by David Parker. So when Labour is talking about getting value for money, well, I think he had better come down and maybe take that final Labour call.
Then there is another one here. Well, this is not so bad, but, you know, it is just in keeping with the rest. Dairy Farms Partnership was sold to Americans, with 589 hectares of freehold sheep and beef farm, for $5.3 million. Really, when you look at it, I
would say that Labour’s approach on this stuff is about as coherent as a David Shearer statement. If you want to know what I mean—
Hon Clayton Cosgrove: Oh, that’s deep!
Hon Dr JONATHAN COLEMAN: Well, yes, it is, actually, because this is what David Shearer said today after caucus. David Shearer was asked today whether he is connecting with the electorate. He said: “I do not believe I am not not connecting.” That is a “Shearerism”. He said: “I do not believe I am not not connecting.” That is what David Shearer had to say today. If you look at it, these guys have got big problems, because when it comes to this issue, Labour members have no credibility. Clayton Cosgrove knows this. He is absolutely appalled, because basically someone like Clayton Cosgrove—a good centre-right, sensible person who joined the wrong party—knows that his people are on the wrong track with this. All they can do now is laugh, because they know that fundamentally they have lost the debate.
We were absolutely astonished that these people would want to seek an urgent debate on the Crafar Farms here today, because when you look at their record they clearly did one thing while in Government, and then, when they were in Opposition, when they could not get anything to grasp hold of, they tried to grasp the greasy, slippery pole of farmland sales and overseas investment. They miscalculated. They thought they could get some traction with this. Well, I can tell you that this is yesterday’s issue. But that is what goes with these Opposition members. They are so far behind the play that it is quite clear David Shearer—look, if he was in charge of that caucus, he would have sat down today and said: “Look, we’re not doing this debate. No one cares about this. You know, let us do something the public are fired up on.” The public has forgotten this. We have won the debate. Those guys opposite used to be on the winning side of the debate. They lost the election and now they have consciously chosen the losing side of the debate, and in the end New Zealand is going to say: “Why would you want to be run by a bunch of losers who always get on the wrong side of every argument?”. Labour will be teamed up with the Green Luddites who will have us back with pitchforks, old straw hats, and an oxen plough, taking us back to medieval times. Quite frankly, I reckon it would be great if we could move an extension of time and have this debate every Tuesday afternoon. Kia ora.
Hon CLAYTON COSGROVE (Labour)
: That was an outstanding contribution from Mr Coleman. Who is Minister Coleman?
Hon Dr Jonathan Coleman: Dr Coleman, buddy, to you.
Hon CLAYTON COSGROVE: Oh, Dr Coleman, sorry. A witch doctor, perhaps; we are not sure. He was part of that great duo—you know, sort of Laurel and Hardy—Maurice Williamson and Dr Coleman, who were such geniuses in their National Government that they could not make a basic process decision that was not reviewable by a court. It took a court in this land to come down on them like a ton of the proverbial and require them to readdress this decision and to use a proper process. But if you look at Dr Coleman’s contribution round here and his political track record, they do not call him “The Maestro” for nothing—both inside and outside this place. I say to the prospective next Speaker of the House, the next knight of the realm, Sir Maurice Williamson, that he could have picked a better partner in crime, I think, as it were, to deal with this decision.
But let me say this: one of the things Dr Coleman said as he concluded his speech was “this is yesterday’s issue.” That is what he said. He also said: “No one cares about this.” Well, I say this to Dr Coleman. I do not know what planet he is on, I do not know what stratosphere he is orbiting, and I do not know whether he reads the newspaper every day, but when it comes to assets being sold, whether they be land-based or whether they be State-owned assets, I have to tell him something. I am sure Maurice
Williamson, who I think is still Minister of Statistics—he will correct me if I am wrong—and who can count using all his fingers and toes, will tell Dr Coleman that if he reads a poll, for 80 percent of New Zealanders these issues of asset sales are paramount in their minds and paramount to their lives. Eighty percent, for instance, are opposed to the Government’s fire sale of State-owned assets. That proves how out of touch “The Maestro” is. According to the great “Maestro”, no one cares about these issues—no one cares about them—and they are yesterday’s issues.
Scott Simpson: What are the polls telling you?
Hon CLAYTON COSGROVE: What do the polls say? Well, I just said to the member that 80 percent of New Zealanders, consistently—I say to that member, whose name I cannot recall, but somebody will help me out. Mr McClay will—
Andrew Little: Simpson.
Hon CLAYTON COSGROVE: Mr Simpson. Eighty percent of New Zealanders, consistently, across the board—[Interruption] You see, if you are going to ask the question, Mr Simpson—you are a new member—you have got to have the facts up the old sleeve. Eighty percent of New Zealanders, consistently, in the polls, Mr Simpson, have said they are opposed to the sale of State-owned assets, which they already own. When you ask New Zealanders about whether they wish to sell out land holus-bolus, then I suspect a similar number would line up in a similar queue.
The National members have made a case and they have read out all sorts of figures about what we did. It is the usual sort of time trap that Governments get into, nearly 4 years in, when they do not want to address their own mistakes, their own myopic behaviour, and their own stuff-ups. It is “What did the other side do?”, because they do not want to talk about their own conduct. But let us say this: yes—and Maurice Williamson, I think, addressed it in his speech—there is something called policy evolution, called learning. Governments do things—of all shades—with the best of intention, normally. Sometimes they get it right; sometimes they believe it is right until they actually look back in history and say that perhaps there was a different or a better way. And, yes, the Government of which I was a part did sell land, but I say to this Government that we have learnt. There is a member’s bill in David Shearer’s name, which does not prevent—
Louise Upston: How much did you sell?
Hon CLAYTON COSGROVE: You see, there they go again.
Louise Upston: How much did you sell?
Hon CLAYTON COSGROVE: There they go again. A party that does not evolve, does not listen to the communities, and does not learn from history is doomed. It is doomed, and these people are doomed. The bill that is in David Shearer’s name—
David Bennett: Shearer can’t be evolution—you’ve gone backwards.
Hon CLAYTON COSGROVE: —as they sort of squawk; “Cue Ball” down in the corner there—is actually enlightened. At its very essence what it says is it does not prevent foreign investment. It is not anti foreign investment. It is not anti the purchase of, in a limited way, certain land stocks. But what it says is if you are going to do a Crafar farms deal and you are a foreign investor, then you have to come to the table with something called value-add.
Andrew Little: Do it for the good of New Zealand.
Hon CLAYTON COSGROVE: You have to have something that you offer New Zealand—my colleague is right; it is for the good of New Zealand—not just have a grandiose auction and flog it off just for the sake of it. At its very core, the National Party has a fundamental belief and a fundamental God-given right, it believes, to flog everything off, normally to foreign investors, as we saw with Contact Energy. That is National’s absolute, fundamental, bedrock belief. That is what it thinks—sell it off.
What we are finding now, as we unpack the so-called Mighty River Power sale, for instance, is that this, I believe, will go down in history as one of the biggest wealth transfers. Those who cannot scrape up the $1,000 or $2,000 to get in on the deal will pay for all those who can, of course. And they will pay in the bonus shares—the loyalty bonus—that the National Government said we would not need, because New Zealand would own these shares into the future, infinitum. But we now know that is rubbish—that is bunkum—because it wants to have a loyalty share scheme. So this is about wealth transfer, and this is about the National Party not evolving, the National Party not learning from its own history—
Andrew Little: The salamanders.
Hon CLAYTON COSGROVE: The salamanders, as my colleague says. He has some degree of expertise—looking across to the other side—on reptiles. Mr Little has given me a brief. They are a pack of salamanders, these people. I say this: they would do well to have a look at that member’s bill, because what it basically requires is foreign investment to deliver benefits that would be over and above what a New Zealand investor could produce. So you look at your Kiwis and you say that if it is going to go, then the foreign investor has to come in and say they can provide something that our domestic arrangements and domestic investors cannot provide. That may be, for instance, international and overseas trade linkages; that may be expertise that we do not have. It may be, for instance, that they will offer to transfer technology or expertise into the New Zealand market place. What it means, at its very essence, is that this has got to be about something bigger and better for our country. It could be, for instance, real job creation, not just picking off a few people around the edges to make it look like you have created a few jobs. It could be doing something innovative that perhaps is not possible in New Zealand. But all those things are about adding value, and substantial value, like increasing exports, job creation, and other important factors. It is about adding value to this country.
But the National Party’s view is to flog if off at whatever cost. The evidence of that, if you go back to State-owned enterprises, is you have Mighty River Power, with a Waitangi Tribunal inquiry hanging over the sale, with likely and potential court action possibly delaying the sale, and the National Government simply, in the worst economic conditions of our time to sell an asset, hell-bent on just going for it—putting pressure on the Waitangi Tribunal and saying it just wants to flog this thing off. This, for National, is about a flag in the ground on its political philosophy. It is not about New Zealand; it is about the Prime Minister’s pride now. The Prime Minister and National have wrapped their arms around and have pop-riveted themselves and welded themselves to this policy, in the face of massive opposition up and down the country, and in the face of economists and experts criticising the legislation the Government put through. So now it is simply about John Key’s old-fashioned pride that he wants to get this through, because he refuses to see sense and back down.
It is also about National’s ideology—you know, flogging revenue-generating assets that create millions and millions and millions of dollars for our communities, millions of dollars over and above the debt-servicing costs of National’s $300 million-a-week borrowings for a reckless tax cut. Who in their right mind, looking at that proposition, where we know you are going to lose $100 million in dividends a year—a loss for the taxpayer—would agree to that? This is about the old-fashioned pride—and prejudice, to some extent—of John Key and the National Government. The Lord above could come down and say: “This is not a good deal. I can see into the future. We are going to lose. The taxpayers are going to lose.” And John Key and National would say: “No, we don’t care. We are going to do it.” And they will, if they are not stopped in their tracks.
How do we know that this sort of behaviour does not work? It is because those geniuses tried it last time, in the Bolger Government, and are we any better off? No. And this is part of it. If you are going to sell something and flog it off overseas, the deal is that there has to be a value-add for New Zealand. It is not about fixing John Key’s political predicament and his pride.
TODD McCLAY (National—Rotorua)
: The court found that the Minister for Land Information acted within the powers of the law. The Labour Opposition may wish that he acted against the law, it may wish that he broke the law, but the fact of the matter is that he did not. This is nothing more than muck-racking by the Labour Opposition and scaremongering by that Labour Opposition, and we have had a lot of that over the last 4 years.
Here is the challenge that we had, because the Labour Party position is political hypocrisy of the worst type. First, it tells us it is against selling land to foreigners, but what happened in its 9 years of Government? It sold 666,000 hectares to foreign interests—666,000 hectares sold to foreign interests. Its No. 1 cheerleader, its spokesman who got up on this issue, David Parker, when he was Minister for a short period of time on this issue, sold 240,000 hectares of land to foreigners all by himself. Now, under this Government, in a 3-year period, one-sixth of what Labour did has been allowed to be sold to foreigners. That is just over 100,000 hectares. David Parker sold 240,000 hectares all by himself. I know what he will do when he leaves this place, and it will be to do with real estate sales in the rural sector.
Labour has since changed its position. It is no longer against foreign investment and the sale of land to foreigners—just some foreigners. You see, it says no to the Chinese, but yes to other nationalities. We have heard those members say in this debate that that is not the case at all, but the Chinese know that for some Canadian film-maker who wants to buy some land, some dairy farm in the Wairarapa, that is OK. When David Shearer was asked about this, he said Chinese: no, but he did not have very much to say when a Canadian film-maker from the Wairarapa wanted to buy a couple of farms. This man, James Cameron, made a wonderful film that almost everyone in this House would have seen. Do you know what the Labour Party has in common with that film
Titanic? It is in disarray and it is sinking without trace. That was the message that came from that film.
Ten thousand hectares of land were sold under the stewardship of David Parker, when he was Minister, to John Shrimpton, a UK businessman, a moneyman with high-country farm stations in Canterbury. Who was it who sold that? Who signed off on it? It was David Parker, again. So here we are—Chinese, no; some Wairarapa film-maker from Canada, yes. Chinese, no; a businessman from the UK, down in Canterbury, yes. And even worse than that, do you know what happened in that farm deal of the tens of thousands of hectares of land in Canterbury? The rights of everyday New Zealanders, who used to go to that highland in the summer to camp and recreate, were taken away when that Minister at the time, David Parker, signed that agreement into law. The rights of New Zealanders were taken away, and that concerns me greatly.
David Parker also mentioned forestry. He admitted in the House that he allowed forest to be sold to foreign enterprises. Now, he bleats that Labour has learnt its lesson. It is too little, too late. It is a Labour Party sideshow. Labour has no interest in growing the economy. It has no interest in foreign investment. It has no interest in mining. What do we find? The only interest it has is in restricting nationals of some countries: the Chinese—not the Canadians, not from the US, and certainly not from the UK. This was a private sale of private interests. This was private land in New Zealand and it was a private sale. What the Labour Opposition is telling New Zealanders is that it wants to start telling them who they can sell their houses and their farms to, who they cannot sell
them to, and for what price. The Government has no right to be involved in New Zealanders’ business and their interests in that respect.
Mr Parker said that he wants to live in a country where sharemilkers can buy their own farms, and I say hear, hear to that. But in the 9 years of the Labour Government it did not do a single thing to back farmers in this country. It screwed them with the emissions trading scheme. It screwed them with compliance. It tried to turn New Zealanders against farmers. Michael Cullen—remember him saying that the reason interest rates were so high and exchange rates were so high is those greedy farmers were making far too much money overseas? Remember the last election? Just before the last election, Labour said to farmers and rural New Zealanders that farmers do not pay any tax, that they are not bearing their weight, and that they are not doing enough for the country. What happened at that election? It held one seat in rural areas in provincial New Zealand—one seat, down on the West Coast of the South Island, when they are actually still probably against mining on the other side of the House.
Then we see that Mr Shearer and co. have been doing a farmland tour of provincial New Zealand, getting out and acquainting themselves with these parts of New Zealand where they have no representation. Can I tell you, their tour over the last week or two around provincial New Zealand has nothing to do with provincial New Zealand. It is the development of a tourism policy, because they have not been there enough, they do not know much about it, and they were having a good look around when they were there. That is what that was about.
What I finally want to say on this issue is do you remember David Shearer, a few days after he became leader of the Labour Party and Leader of the Opposition, standing by himself in front of a farm on the edge of the Taupō electorate—a Crafar farm—and saying he would bring a bill to this Parliament that would fix this issue? Well, can I say that the only thing more invisible than “The Invisible Man” is any benefits from the invisible bill that he wants to be here, because when he was questioned at the time about what it would do, where would the boundaries be, and what would the scope of it be, he said “We haven’t worked out the detail yet.” So that is what we know about the Leader of the Opposition—“The Invisible Man”, with invisible detail, with an invisible bill that will deliver absolutely nothing for this country. May Wang was the lady who wanted to buy some farms that the Minister legally turned down. Go and do a poll in New Zealand and I bet you her name recognition is higher than “The Invisible Man”—the Leader of the Opposition, David Shearer. I absolutely guarantee it.
We have Russel Norman, who said that he is against the sale of these farms. Actually, to be fair to Mr Norman, he is against most things that most reasonable people say they want to do. But I think the real reason that Mr Norman is against it is that he is under some misconception that a few years ago the Chinese tried to steal his flag. You remember that? He was waving it around, saying “Give my flag back, give my flag back.” This is about investment in New Zealand—something that that party is against. This is about backing New Zealanders to help us get on and grow the economy—something that that party is against.
I want to say to this House that this was a legal act. The Minister acted within the bounds of the law. Those farms are still here and they will still be here. The Opposition may not like that; it may not want it. It may not want the Chinese to be buying farms in this country, but it is OK for other nationalities. But the Minister has acted within the best interests of this country and within the law, because this is a lawful Government. Thank you.
DAVID BENNETT (National—Hamilton East)
: I want to take just a little bit of a different tack from what we have heard in this debate so far and just go through some basics of what farming actually involves. Farming is a capital business. You know,
people spend their whole life building up enough equity so that they can buy their own farm. They work hard in sharemilking. They do the long hours. They put that hard work in. And it is one of the most competitive businesses in New Zealand, if not the most. It is probably the most competitive farming business in the world. New Zealand farmers pride themselves on their ability to farm efficiently, and without Government subsidy, to the highest levels in the world—the highest standards of the product produced, and the highest levels of economic efficiency. They are the best, and they are the best because they compete on an open market. They do not have a market that is dictated by the Government. The prices received for agricultural products are the prices in the world market. The prices that they pay for the inputs for the products that they produce are world market prices. You cannot distort that market in any way or you will lose the efficiency of the New Zealand agricultural system.
This Parliament, this country, or the world cannot go out there and distort market prices. Nobody has that power. And yet the Opposition asks us to distort the market prices of land, assuming for one moment that its theory of land acquisition would have any effect on market prices. That is not the case. You do not see the Chinese coming and offering extortionate amounts of money for that land. If it was a land grab and they have got $2 trillion, like the Green Party says, they would be offering a lot more money. That is not the case. If you make those limitations, this Parliament will effectively hamstring New Zealand’s biggest industry, because it will create a different economic advantage or disadvantage for them because the industry will not be operating in the manner that it is accustomed to and that has made it so strong.
The other thing I want to talk about today is that when we look at the agricultural industry, and especially the dairy industry, we need to look at it in the context of the supply chain, and it is not just about land. There is also the manufacturing side, which is the level above land. I guess the great fear—and, I think, the only thing the Green Party could ever say that would have any relevance—is that if New Zealand product actually went into those Asian markets and had the New Zealand name on it, the New Zealand brand, but was not actually New Zealand milk, or if it was a hybrid of New Zealand milk and other countries’ milk put together, then you would be worried because our brand is so important. The possibility of losing that brand control through selling our manufacturing sites is probably the bigger risk for New Zealand than the sale of the land.
That land will produce milk. That milk will be manufactured into products in New Zealand. The Chinese are not talking about piping that milk to a boat at Tauranga Harbour and sending that over to China to process. They want to process it here, just like any New Zealand farmer would do. The real danger for New Zealand farmers and the New Zealand brand is if we do not control that link from when we get a produced product in New Zealand to when it is sold on the shelves of Shanghai. That is the real danger, and that is something that this Parliament should properly address in the future.
That is contrary, though, to what the Labour Party has said. The Labour Party has said: “It’s OK to sell that part, but we just do not want to sell the land part.” We have to properly address how we have that brand recognition and maintain control of that brand. We have heard from many speakers about how Labour has sold a lot of land in its time, and that is true. Those members say that they have learnt from that, but I think we need to be very careful about the real issues here. The real issue is that we have the best agricultural industry in the world and we should not distort that by making rules in this House that will not be effective in the first instance and, secondly, will distort that market. The second thing we need to be very careful about is making sure that we actually look at the real issues. The real issue is not who owns that piece of land; the real issue is the product and the branding of that which represents New Zealand when it
goes into market, because that is a real risk. So I think we need to take into account some real issues, not some rhetoric.
- The debate having concluded, the motion lapsed.