By Mark Patterson, New Zealand First MP
New Zealand First welcomes the recently announced review of the Overseas Investment Act by Associate Finance Minister David Parker.
This is the second phase of the Government’s overseas investment reforms, with limits on foreign investment in the residential housing market and a tightening of the scrutiny placed on buyers of farmland in excess of 5 hectares taking effect in late 2018. The results of these changes can already be seen with a steadying of house and farm prices.
Giving kiwis a fairer go at home and farm ownership
Make no mistake, New Zealand needs high quality foreign investment in our productive sector. That investment often not only means access to capital, but also access to foreign markets, supply chains, intellectual property and international expertise, which all contributes to improved profitability and growth.
However, there can always be too much of a good thing. If we allow too much foreign ownership of our productive sector, we risks losing control of the goose that lays New Zealand’s golden egg.
New Zealand still derives nearly 70% of its export earnings from our farming, forestry, fishery and horticultural sectors. While foreign ownership of land is the more emotive issue, the retention of New Zealand’s ownership of industries which process, add value to, and bring to market our primary produce is of equal importance. This ownership of industries also includes the retention of our key strategic assets and infrastructure in New Zealand hands.
This infrastructure is the future of a productivity driven economy.
Westland Milk Products is but the latest significant New Zealand cooperative capturing these value-added product opportunities to be under offer from a foreign multinational, following the sale of the controlling stake of shares of other significant companies like Silver Fern Farms under the previous Government.
The reason the ownership of these cooperatives remains so strategically important for the New Zealand economy is that they have been able capture the value of our primary produce for our farmers and growers, before that value disappears overseas. Instead of being a nation of suppliers of raw material at the end of a supply change controlled by a foreign multinational, these cooperatives operate across the value chain to fully realise our primary products’ value and provide the highest return for their New Zealand owners.
If we are to push towards creating more value from our primary sector it is companies like Fonterra, Zespri and Alliance Group who must lead the way.
For that vision to be fully realised we must own those companies
Which is why the nationally strategic asset provisions in the proposed Act are vital. Minister Parker will find a solid ally in New Zealand First in bringing this legislation forward.
Mark Patterson is MP for New Zealand First.