17 April 2019

Chief Reporter

Overseas Investment Act Review Aimed At Making Things Easier For Foreign Business: CAFCA

The Campaign Against Foreign Control of Aotearoa (CAFCA) welcomes the announcement by Associate Finance Minister David Parker that a review of the Overseas Investment Act "might" give Ministers "'full discretion' to decide whether the purchase of assets worth more than $100 million by foreign investors should be allowed, with an expectation they would decline any deals that they did not think were in the national interest" (Stuff, 16/4/19).

But CAFCA fears that's where the good news ends as far as this review is concerned. It begs credulity that Parker should have said: "I don't think it will change it (the Act) hugely. I think the big changes came when we banned foreign buyers of existing New Zealand homes" (Stuff, ibid.).

Really? Talk about looking through the wrong end of the telescope. CAFCA has never got terribly exercised about the whole subject of "foreign buyers of existing New Zealand homes", precisely because it is such a small part of a much bigger picture. It has actually got more to do with immigration - which is not our issue - than foreign control, which definitely is. Such a ban was more about securing votes for Labour than anything else. And it's a pretty threadbare sort of a ban, as it is, riddled with loopholes and exemptions. For a start, NZ's hands are tied by so-called "free trade" agreements, meaning that the entire populations of Singapore and Australia are exempt from the foreign house buyer "ban". The fact that Australia is the country of origin of the single biggest number of foreign investors into NZ shows just how threadbare the "ban" is.

Forget about the rats and mice stuff, like foreign house buyers. This Government's changes to the foreign land buyer regime are more significant but still riddled with exemptions (all of forestry, for a start). The real guts of foreign control of the New Zealand economy is that which involves transnational corporations (TNCs) and their relentless takeover of businesses, assets and land in all sectors, aided and abetted by both National and Labour governments. In 2018 the Overseas Investment Office (OIO) approved foreign investment totalling $12.5 billion. The average for the decade 2009-2018 was $8.2 billion. So, a substantial increase in the first full year of the Labour-led Government.

And Parker went on to say that the review "will consider streamlining some 'pernickety' checks on foreign investors to cut red tape, for example by reducing the 'hoops' faced by existing 'long-term reputable investors' who were already paying tax here" (Stuff, ibid). Conclusion: business as usual, despite this Government saying it would take steps to deal with what it claims to recognise as the problem of foreign control. Actions speak louder than words. Let's see some action. Everything points to this review being intended to make foreign "investment" easier, not harder, and that this Government sees the TNCs as its priority, not the New Zealand people.

Any changes to the Act will only apply to new applicants, not to those already well ensconced in NZ. For example, what does the Government plan to do about the cosy cartel of Australian-owned banks, who suck billions out of the NZ economy every year? In 2009, when it was in Opposition, Labour was happy to take part in an inquiry into the banks. But, now that it is the Government, it refuses to countenance an NZ equivalent of the very recent Australian Royal Commission of Inquiry which uncovered systemic criminal and unethical behaviour by those very same banks in their home country.

Here's another specific example, although much bigger, older and much more entrenched. What is the Government going to do about the country's biggest bludger, the transnational owners of the Bluff smelter? They have twisted NZ governments, both National and Labour, around their little finger for 50 years. If Jacinda Ardern is serious that climate change is her Government's nuclear free issue, then she will have to confront and face down the smelter's owners. And do better than the Clark Labour government which folded when the smelter owners threatened to leave the country if Labour brought in an emissions trading scheme. Memo to Jacinda - if they threaten to go, hold the door open for them and help them load their suitcases into the airport shuttle. And make sure that they (those recipients of corporate welfare par excellence), and not the NZ taxpayer, foot the bill for cleaning up their mess. That would involve Labour facing up to the 2003 and 04 indemnities signed by Michael Cullen, Labour's Minister of Finance at the time, accepting that the taxpayer, and not the smelter owners, would be responsible for the cost of cleaning up toxic waste produced by the smelting process.

Tackling the domination of the NZ economy by already entrenched TNCs would involve Labour in putting the real national interest ahead of its dread of upsetting "business confidence". Business in this country is, more and more, foreign business. What is needed is a Government prepared to tackle this transnational corporate colonisation, not one that tinkers around the edges to mollify public opinion while simultaneously making things even easier for the colonisers.

To see what a real review of the Overseas Investment Act looks like, check out CAFCA's submission from when it was last amended (2005, also under Labour)

Murray Horton


Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258