Herald on Foreign Investment

The Herald editorial:

According to the Finance Minister, overseas investment regulations to be introduced in December will “provide extra clarity and certainty for potential investors”. More likely it will produce doubt and confusion.

The only thing more certain, is that Ministers are more likely to interfere if the political heat gets too much.

The regulations are an invitation for pressure groups to create as much fuss as possible to get the ministerial thumbs-down for what may well be desirable bids in terms of efficiency and economic benefit. Some opposition may be driven by xenophobia; others may not wish land sold to any overseas interests, whether they are Canadian or Chinese. Clearly, there will now be added uncertainty. Overseas investment policy, rather than being based on a clear set of principles that are applied without fear or favour and that recognise the limits on foreign control, will be hostage to the ministerial pen. …

Overseas investment, like immigration, has always been a key driver of the New Zealand economy. It also is far too important to be hostage to ad hoc politicking.

What people always forget, is that when you ban land owners from selling to the highest bidder, you are reducing their net wealth – and reducing the amount of money they may have to invest in other ventures.