Damien O’Connor - List MP, Labour
The coalition government is in the process of setting up a new agency called INVEST NZ, which will be tasked with the job of attracting foreign capital to our country.
We have a history of dependence on capital from overseas investors to grow our industries and economy. From meat and dairy processing companies to insurance and vehicle assembly. These investments helped grow jobs and exports while we slowly built our infrastructure and communities. In more recent history we have seen the sale of some of those assets into foreign hands at the same time we have built our capital and investment base.
New Zealanders now invest about $373Billion offshore to earn dividends at the same time around $575Billion of foreign capital is invested in New Zealand across a whole range of sectors. Banks, insurance companies, wine exporters, forestry companies, tech companies, real estate and rural properties all owned and controlled by foreigners. Many of these investors and their money have provided new and exciting opportunities for Kiwis to work and prosper. Others have taken over companies and squeezed profits and jobs from our economy.
But we continue to hear the mantra that our future depends upon increasing foreign investment. Hence the latest move by the coalition government to set up this new agency INVEST NZ to sell New Zealand investment opportunities to the world.
It is time to ask the question if we need to take a new approach to capital in our economy. And I’m not talking tax - that’s another discussion needed. Without constraint on foreign capital, it can drive up the value of residential and farm assets so that young Kiwis can’t afford to grow their future in our country.
Indeed, we see 191 people leaving our country every day for Australia where they see better opportunities, even before this new influx of capital hits our shores. Maybe this new capital can help, maybe not. The absence of any clear criteria or constraints on INVEST NZ could lead to fewer opportunities for Kiwis not more as the sales pitch states.
How about investing more in ourselves and taking some of that $373Billion that fund managers send offshore and investing it in New Zealand. Investors and communities alike would then have a vested interest in progressing our country to provide a better future. The reasonable objective for foreign investors is to maximise their return on capital and continue to take the $26Billion plus out of our economy and communities through dividends flowing offshore every year.
The question for us all in assessing the value of foreign investment should always be ‘does ownership matter?’ And if so, how do we ensure we sustain opportunities for Kiwis into the future in these challenging times. Much to think about and we ignore it at our peril.
