Overseas Investment
New Zealanders hold a wide range of views on the sale of farmland to overseas interests.That it is an emotive issue is understandable but the challenge is to find a way to address public concern while ensuring that farmers and the wider economy are able to continue benefiting from overseas investment.
New Zealand's economy is built on foreign investment which has been built up over many years. As at June 2011,the stock of foreign direct investment was $95 billion and total foreign investment, including direct investment, equities and debt, was $303 billion.
Overseas investment is both necessary and beneficial, providing needed capital for generating jobs and increasing income, as well as helping embed and disperse the benefits provided by innovation. It also improves productivity, competition and consumer choice. Profits generated by foreign investors accrue to the New Zealand government through taxes.
With regard to farmland, Federated Farmers supports the purchase of land by immigrants who wish to farm the land and so benefit both their local communities and the economy in general. There are also benefits from high wealth individuals purchasing farmland of high
scenic value.
There are concerns around some recent developments regarding the mass aggregation of farmland and the possible effects of this on farming and the economy. However, there are costs to making it harder for foreigners to buy land, such as reducing access to capital and the possibility of sharp falls in rural land prices. These need to be carefully considered to ensure that any changes to the rules and their implementation benefit farming and the economy generally and do not have unintended consequences.
Federated Farmers is also concerned about the potential for decisions by political whim and we consider it very important for investors and landowners to have certainty over the policy environment for overseas investment. Governments must ensure that any directives made to the Overseas Investment Office provide a clear and objective steer on what would and would not be acceptable.
We generally supported the 2010 policy changes requirements as they generally strike the right balance between encouraging investment and addressing the concerns about certain types of investment that might not be in New Zealand's best interests. The test though will be on how the changes are administered and enforced.
Federated Farmers wants
- An environment that encourages investment in the economy be it from overseas or from within New Zealand
- Rules on overseas investment in farmland that strike an appropriate balance between encouraging investment and addressing concerns about some types of investment
- Rules on overseas investment in farmland that provide both landowners and potential investors with certainty
- Objective, transparent, and consistent administration and enforcement of the rules on overseas investment in farmland.
Spokesperson
Federated Farmers Overseas Investment spokesperson is National President Bruce Wills, you can contact him at bwills@fedfarm.org.nz.
