Govt thinking on foreign investment at odds with Maori leaders
30 Nov, 2017 5:30am
5 minutes to read
By: Fran O’Sullivan
Head of Business, NZME
A pitch by leading Maori for Chinese investment to help develop the Maori asset base underlines why the Government needs to think through its attitudes to foreign investment.
The Maori Leaders’ pitch came at the Oceania Silk Road network-hosted Next Summit on Monday.
The network had its genesis at Xi Jinping’s Belt and Road summit last May where former Yashili (NZ) chief executive William Zhao, National Party president Peter Goodfellow, NZ China Trade Association chair Martin Thomson and National MP Jian Yang decided to help develop a new platform for increased business and scientific collaboration between New Zealand and China.
Zhao is still very much in the driving seat and is now supported by think-tank initiatives out of China aimed to leverage Belt and Road.
On Monday, former Tainui Holdings Group director Tukoroirangi “Tuku” Morgan, Sir Mark Solomon (the former Iwi Leaders Group co-chair and former chair of Ngai Tahu), and Tuariki John Delamere (representing the Maori King Tuheitia Paki) carried a single message — they value the potential for long-term Chinese investment to grow their asset base.
The pitch builds on momentum achieved after a Taniwha Dragon Economic Summit in Napier where $138 million of deals were said to have been done over two days.
The Next Summit was less geared towards doing deals. But it did provide a vehicle for Maori leaders to invite foreign investment — including from China, where they believe there is a good match between their own desire to grow inter-generational wealth and China’s aim to secure long-term supplies. It’s something the Government will need to keep in mind as it moves to set up a national interest test in its tougher foreign investment regime.
Yesterday Economic Development Minister David Parker and Lands Information Minister Eugenie Sage announced foreign buyers of rural land will face tougher requirements before they are given permission to acquire NZ assets.
It’s the precursor to law changes to give effect to the Government’s plan to ban foreigners from buying existing residential housing and further changes planned for later next year which will include a rewrite of the Overseas Investment Act and the restructuring of the operations of the Overseas Investment Office.
It seems there has been strong debate within the Government on how far the farmland ban should go.
Its announcement stops short of the outright ban on foreign investors in farmland that exceeds 5ha which Parker previously tipped. It also has a carveout for investments in forestry-related land where foreign capital will be needed to support wood processing and manufacturing.
Prospective buyers of farmland will have to provide benefits to the economy additional to those marked out in a 2010 ministerial directive to the OIO by former National Finance Minister Bill English.
As Chapman Tripp summarised the OIO will place higher relative importance on economic factors, and ensuring oversight and participation by New Zealanders, when assessing applications involving rural land.
“The new approach reflects a desire to achieve a balance between the need for highly beneficial overseas investment and the need for New Zealand to maintain ownership and control of sensitive New Zealand assets,” Chapman Tripp said.
“The Government believes that the merits of overseas investment in the primary sector can be less compelling given that we are already world leaders in this area. [It is] concerned to ensure that overseas investments in rural land are genuinely substantial and identifiable.”
The problem is that what the Government believes and what existing farmland owners believe may be quite different.
When it comes to Maoridom, the leaders say they rely on foreign cash to develop their assets — which have a strong primary-sector base.
The Maori economy is valued at $50 billion. Maori enterprises are predicted to invest up to $2b a year and, says Morgan, they want partners with complementary capacity to support them and boost their growth.
They have an ambition to have an asset base worth $100b by 2030.
Already 50 per cent of the sustainable fishing quota is owned by Maori, nearly 50 per cent of the forestry and 1.4 million hectares of land with significant opportunities for development.
In the next 20 years the Maori leaders say they are looking for partners to optimise the existing asset base and looking for investment in food processing, tourism facilities, new products, partnerships to take products and services to the global market, infrastructure, water and technology and innovation.
Parker has a more self-determinant approach, believing NZ can essentially grow its wealth when it comes to farming where he asserts we are among the world’s best.
Maori leaders just want to move faster and seize the opportunity (together with Chinese investment) to build together.
The Oceania Silk Road Network is one of several groups which have developed to leverage Belt and Road, including a Belt and Road Council chaired by Sir Bob Harvey.
A prospective Belt and Road think tank, which was being developed by Wellington PR specialist Jo Coughlan and Labour MP Raymond Huo, is quiescent.
The NZ China Council is also developing its own initiatives which were outlined recently at an event co-hosted with the Confucius Institute.
● Disclosure: Fran O’Sullivan chaired a session at the inaugural Next Summit at which both Tuku Morgan and Sir Mark Solomon spoke.