Ministers have always had veto powers - What’s been lacking is the political will to use them!
But this latest review has, contrary to a regular drip feed of information from “inside sources”, recommended precisely no change to the Act. It has introduced two new measures to the Act’s accompanying Overseas Investment Regulations and they both apply exclusively to investments in sensitive land: a new “economic interests” factor allowing Ministers to consider whether NZ’s economic interests are adequately safeguarded and promoted; and a new “mitigating” factor enabling Ministers to consider whether an overseas investment provides opportunities for NZ oversight or involvement e.g. by appointing NZ directors or establishing a head office in NZ.
Some media commentators have labeled these as giving Ministers “veto powers” over foreign investment in large tracts of farmland (actually, for as long as there has been an Overseas Investment Act - since 1973 - Ministers have always had veto powers over all aspects of foreign investment. What’s been lacking is any political will or courage to actually use them. But let’s not spoil a good story).
What has changed since Bill English announced this review 18 months ago? Obviously, the very large and growing larger public opposition to relentless foreign takeovers of prime agricultural land, and specifically the Chinese bid for the North Island dairy farms empire of the hapless Allan Crafar. There has always been public opposition to foreign takeover of NZ rural land but what is different now is a qualitative change from rich foreign individuals wanting to buy picturesque hobby farms for themselves (think Shania Twain) to agribusiness transnationals wanting to buy great chunks of the dairy industry, which is the current engine of the NZ economy.
This has led to major unease among people who have been among National’s traditional backers and voters (which has taken organised form with the recent launch of the Save The Farms group) and there has been evidence of a major difference of opinion at the highest levels of the Government itself, with Maurice Williamson on the one side labeling opponents of foreign investment as “racists” and John Key on the other, saying, more than once, that he doesn’t want to see New Zealanders end up as tenants in our own country.
It would seem that the Key faction has prevailed – not only is the Overseas Investment Act not being liberalised, it is not being changed at all, and a couple of essentially cosmetic measures have been tacked onto the Regulations to try and satisfy public opposition to farm sales to foreigners.
We congratulate the Government for not liberalising the Act any more than it already is but we call upon Key to take the bull by the horns and actually substantially tighten it up. There is plenty of scope to do so. Start by exercising the veto powers that Ministers already have (and always have had). Recognise that New Zealanders do not want to become inhabitants of a branch office of a bunch of transnationals, and exercise some political will in the national interest. It will be a novel feeling but you’ll get used to it. And if you do so your employers, the people of New Zealand, will thank you for actually doing your job.