Insight
OCTOBER 2014 //
FROM THE GROUP CEO
Foreign land owners part of the landscape. Up until about early August it seemed New Zealand was sleepwalking towards the September 20 election day. The usual bear baiting and snapping had seemed relatively subdued, and things were, well…boring. That was until Conservative Party leader Colin Craig let it slip that Lochinver Station in central North Island was to be sold to Chinese company Shanghai Pengxin, subject to Overseas Investment Office (OIO) approval. The massive 13,800ha station near Taupo can justifiably be called iconic, in league with higher profile South Island runs, and it has enjoyed ownership under Auckland based Stevenson Family Group for over 50 years. So the announcement that Shanghai Pengxin wanted to buy the station looked like it may be the fuel needed to fire the pre-election debate beyond the usual petty one-upmanship that seemed so prevalent and banal until that point. Alas, it does not seem to have been the fuel some in parliament may have wished for. Any debate around Lochinver’s sale has admittedly been eclipsed by the blogger hacking scandal that quickly dominated after Nicky Hager’s book launch. However there also seems a greater level of acceptance among New Zealanders that
if we want to participate in a global market, sale of land to foreign interests is an almost inevitable part of that. The lack of outcry about the proposed sale was mirrored in a NZ Herald Digipoll survey confirming the majority of those surveyed approved the sales of land to foreigners when it bought significant advantage over a NZ based purchase, including creating extra jobs. Only a third believed farm sales to overseas investors should be banned altogether. This immediately put Labour’s 100% “fortress NZ” ban on foreign land sales off kilter with the majority of the electorate’s views. Opposition parties also seemed immune to the claim made by Lochinver’s present owners that the sale would release capital that could in turn be used to reinvest by the company to create new jobs. What appears to have been forgotten by many in Wellington trying to turn the deal into a pre-election issue is that much of the past issues over foreign land sales have been dealt with over two years ago. That was in part thanks to the inept attempt by businesswoman May Wang to buy Crafar farms in 2010. It was then reinforced with efforts by Sir Michael Fay to acquire the farms with local iwi resulting in purchase rules being significantly tightened. Wang caught the country off guard with her quixotic efforts to slide under the OIO radar in her efforts to pick up Crafar farms.
Peter and Toni May, Peter May Ltd RURALCO NZ LTD
PO Box 433 Ashburton 7740
For his part Sir Michael Fay in his own true style pushed efforts by Shanghai Pengxin all the way to the High Court. While he may have lost in his efforts to overturn the sale, they were not in vain. The already tighter rules were tightened further by the court requiring the benefits to be “above and beyond what NZ buyers would bring” to a land purchase. For a while it looked like the Lochinver sale might see a re-hashing of these requirements. However poll results suggest most New Zealanders “get” the new rules, and simply expect them to be enforced thoroughly and transparently when assessing sales. Exact numbers are hard to get, but best estimates are about 10% of land is foreign owned. That means 90% is not, and remains part of our robust farming family culture. A glance through the many rural publications highlights how many young, keen and educated Kiwis there still are who do, or intend, to own their own piece of this country. It remains possible, and foreign owners look set to become simply another plank in our strong rural economy, subject to some sound and focused assessments.
The OIO is now far more familiar to New Zealanders, and expectations of it to perform and monitor sales are significantly
Considered planning ensures marketing success
IN THIS ISSUE
greater. Meantime the government modified foreign sale rules, requiring “substantial and identifiable benefits” to accrue to NZ as a result of foreign land sales.
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ruralco@ruralco.co.nz www.ruralco.co.nz
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