The article below is the lead article in the most recent Foreign Control Watchdog. If you are interested in subscribing to Watchdog and receiving your very own copy every four months then email email@example.com for details on how to join.
IT’S A START
But Don’t Stop Now, There’s An Awful Lot More To Be Done
- Murray Horton
It is extremely encouraging that the Government has decisively vetoed the tenaciously sought takeover of Auckland International Airport by the Canadian Pension Plan Investment Board. That whole saga, with its many twists and turns is documented elsewhere in this issue by Quentin Findlay (following on from his cover story in Watchdog 116, December 2007, online at http://www.converge.org.nz/watchdog/16/01.htm). For once we can chalk one up for the good guys and savour the victory. The Government deserves congratulations for finally growing a backbone on this issue and saying “enough is enough”. Equally, John Key is to be commended for pledging not to flog off any State assets in the first term of a National government.
But our congratulations and commendations are strictly limited in scope. Let’s start with National, because all the polls say that it will win the election this year. Honest John has only committed National to no asset sales in its first term. So, unless he’s saying that National will be a single term Government (and there never has been such a beast) then, obviously, all bets are off in any subsequent term. This latest flip flop (there have been so many that we nominate him for the Olympic gymnastic team) is driven by the same motivation as everything else Key has said and done since becoming National’s Leader – the all consuming desire to win the 2008 election, no matter what it takes. It certainly doesn’t represent any change of political or philosophical direction for Key – in the same TVNZ Agenda interview (13/4/08), he committed National to more public private partnerships in education sector infrastructure and to more help for private schools.
In the case of selling State assets, Key is simply trying to stuff the cat back into the bag that his Deputy, Bill English, let it out of in 2007 when English announced that National would partially privatise some of the remaining State assets. This caused a widespread outcry which, combined with public opinion running strongly against the attempted sale of Auckland Airport (first to Dubai, then to the Canadians) convinced Key to drop this particular hot potato. Or, at least, get it off the agenda until he’s safely ensconced in power.
New Regulations Have Positive National Implications
The Government’s new foreign investment Regulations, announced in February 2008, do toughen up the 2005 Overseas Investment Act, at least as far as it affects strategic assets on sensitive land. They were specifically drafted to put the final decision on any sale of Auckland Airport firmly into the hands of Ministers and taken away from the Overseas Investment Office (OIO), the fastest rubber stampers in the land. It is ironic that the two Ministers who vetoed the airport sale did so under the existing provisions of the Act and did not cite its new Regulations. Naturally, the OIO recommended the sale, as it has done every single time a comparable situation has arisen (the OIO has never seen a foreign “investor” it didn’t like, turning down only a small number of would be rural land purchasers in recent years. No corporate takeovers have been refused since the 1980s). To their credit, the Ministers ignored the yes men who, I have no doubt, would happily welcome Robert Mugabe if he turned up looking to buy a nice little retirement place.
Michael Cullen, the Minister of Finance, made clear that these new Regulations have implications for any other proposed sales of strategic assets on sensitive land. No list of such assets has been published and Cullen has said that there won’t be one, so the Government obviously intends to deal with them on a case by case basis. There have been signs that the Christchurch City Council, via Christchurch City Holdings Ltd (which has moved from being a holding company to an active player in the market) has not given up its plan to flog off the Lyttelton Port Company, which was thwarted first time around in 2006 when an attempted sale to a Hong Kong transnational was brought to a graunching halt. The Keep Our Port Public coalition (http://www.keepourportpublic.org/), of which CAFCA is part, and which had been quietly lying on the seabed for the past two years, resurfaced to warn that the City Council has been buying up Port Company shares and has now passed the critical 75% mark. This means that the legal structures are now all in place to enable a sale, usually by way of a merger, without having to reach the 90% shareholding mark needed to effect a full takeover (the use of this alternative and controversial method to sell or take over a company has been used by transnational corporations and their local collaborators in several changes of corporate ownership in recent years).
So, what is going on behind the scenes? Is there another transnational suitor being wooed? Bearing in mind that the attempted 06 sale was sprung on the people of Canterbury out of thin air, we have a well founded suspicion that this is not all just being done for fun. If the boneheaded Council, now headed by “business friendly” Mayor Bob Parker, does have another go at flogging off the publicly owned Port Company, we, and plenty of others, will demand that the Government immediately invoke these new Regulations to stop it.
Dangerous New US Investment Agreement Must be Stopped
Once the Government decisively stepped in to block the Auckland Airport sale, there was outrage, veering into hysteria, from the usual suspects on the Right, in politics, the media and business. One of their main gripes was Labour’s inconsistency on the issue of foreign investment. CAFCA agrees with them, but for diametrically opposite reasons. The Government is sending out contradictory signals – it canned the Canadian takeover in the same week as it signed the groundbreaking and highly controversial Free Trade Agreement with China (and not long after Helen Clark attended the opening of the walking track through Shania Twain’s Otago property, presumably because she’s a “good” Canadian investor). This is the same Government which rammed through that 2005 Overseas Investment Act, a law championed by Michael Cullen, and one which makes the wholesale takeover of the country by transnational corporations even easier than what it already was (see any issue of Watchdog from 2003-05 inclusive for details of the law and CAFCA’s campaign against it). We are delighted that Labour suddenly feels the need to toughen up that Act a bit and, in an ideal world, would hope that this marked a change in direction, a recognition of the bullshit that is the foreign “investment” scam - but we have no doubt that it was done for the same base, election year, power seeking reasons as National’s pledge on asset sales.
After all this is the same Government which has just opened up the existing free trade agreement with Chile, Singapore and Brunei (known as the P4 – P for Pacific) to add an investment agreement to it and, much more ominously, include the US. Now a Free Trade Agreement with the US is the Holy Grail for the colonial mentality of both Labour and National. It hasn’t looked remotely likely, but this could achieve it by the back door. If that happens, then any remaining NZ “restrictions” on foreign investment will be at threat, as the US has made it clear for years that it regards those as “barriers to trade”. That means any “restrictions” on foreign ownership of land, airports, strategic assets, fisheries, the lot. See Bill Rosenberg’s article elsewhere in this issue for details. But it’s a very dangerous move, which is flying under the radar at present and one which will lead to the complete elimination of any remaining protection of NZ as a sovereign economy rather than simply as a South Pacific branch office. The P4 investment agreement proposal needs to be stopped in its tracks, for the sake of consistency, if nothing else.
Privatisation By Stealth
CAFCA is very pleased that political and public attention is focused on privatisation and asset sales. It reminds everyone that although Labour put a moratorium on sales when it came to power in 1999, it hasn’t done anything much about making good the tremendous economic and social damage done by two decades of asset sales and privatisations by its Labour and National predecessors. It renationalised ACC, because that was a campaign promise, but it only renationalised Air New Zealand because the airline went broke. It had the chance to renationalise the railways a few years ago but blinked at the last minute and only bought back the national track network. Now it is in negotiations to buy back the lot from Toll, its Australian owner, which wants to get rid of it but the price is the sticking point. Why is the Government haggling over the price it will pay to buy back stolen property? It bought the track back for $1, we say give Toll $2 (to allow for the inflation that we are currently hearing so much about).
And Labour only acquiesced to the creation of the highly successful Kiwibank (the leadership sneered at it) because that was a promise to Jim Anderton, a vital coalition partner. Indeed Labour has gone rapidly backwards in 2008, announcing a reversal on its previous policy and enthusiastically plunged into public private partnerships in projects for Auckland roading (the biggest roading project in NZ) and affordable housing. It was for exactly that reason, and because of Bill English’s 2007 announcement that a National government would partially privatise State assets, that CAFCA organised the March 2008 Privatisation By Stealth Conference, featuring Bill Rosenberg, Laila Harre, Sue Newberry and myself as speakers (you can read some of the papers online at http://canterbury.cyberplace.co.nz/community/CAFCA/publications/index.html#Privatisation).
We aimed to alert people that privatisation can be brought about by many covert or apparently innocuous means. “Privatisation is like dismantling a bomb — it must be done very carefully, for wrong decisions can have nasty consequences. There are obstacles to be overcome, arguments to be rebutted, proponents to be mobilised, and opponents to be thwarted” (Emanuel Savas, an adviser to Reagan and Thatcher, quoted in his 2000 book “Privatisation And Public-Private Partnerships”).
Reclaim Our Assets
Recognising the overwhelming public opinion on this issue, both major parties have made some small halting steps and reluctant promises. That’s good but it’s only a very small start, there’s an awful lot more to be done. There’s 20 years worth of mess to be cleaned up. Let’s have a systematic, wholesale reclaiming of those assets so that they can once again work for the benefit of the New Zealand people, their rightful owners. To give just one example of what could be achieved, John Minto in his Press column (14/4/08, “Tertiary student debt a $10b boil that must be lanced”) said: “Another practical way to pay for free tertiary education would be to renationalise Telecom. The massive profits from this single company alone would have covered the student fees for everyone these past 20 years had it not been sold by the same politicians who brought us student debt. Somehow, it is more important to the Government for wealthy shareholders to share Telecom’s spoils among themselves rather than return it to the community”. Telecom was the most notorious asset sale and, not coincidentally, it is the only transnational corporation to have been a finalist in every single annual Roger Award since the Award’s creation in 1997, winning it for the second time, in 2007 (for space reasons we have not included the 2007 Roger Judges’ Report in this issue, but it is enclosed as an insert. You can also access it online at http://canterbury.cyberplace.co.nz/community/CAFCA/publications/Roger/Roger2007.pdf).
Make Foreign Control Central Election Issue
Of course asset sales and privatisation are only part of the problem albeit a very high profile one. Both major parties are enthusiastic peddlers of the foreign “investment” scam and it is that whole subject – namely who should own and control New Zealand, and for whose benefit should this country be run – which must be front and centre this election campaign and which should be the subject of a national dialogue at every level of society. This is far too important to be left solely to politicians whose only motivation is to win or hang onto power. If they did get serious about sorting out this problem, that really would be a genuine and substantial philosophical shift. It’s a big job to get through to them but politicians are acutely sensitive to public opinion in election year. We’re talking about the need to make good the grievous mistakes of the past, substantially improve the present and ensure that the future is one in which the New Zealand people are in charge of our own country.