Friday, July 31, 2009

'Red carpet' out for foreign investors

Mike Moreu's cartoon of July 25, from the Manawatu Standard, shows New Zealand Finance Minister Bill English enticing foreign investors to our fair shores.

The following article on New Zealand's new foreign investment policy is a press release from the Labour Party, dated July 24:

THE Finance Minister’s argument that New Zealand needs more foreign investment because Kiwis don’t save enough is laughable given National’s gutting of Kiwisaver, Labour’s Associate Finance spokesperson David Parker said today.

“If Bill English believes poor savings is a major contributing factor for needing more foreign investment, can he please explain his decision to cut Kiwisaver in half?” David Parker said.

“Kiwisaver was designed to encourage savings and tackle New Zealand’s current account deficit. Cutting it in half as National did when it took power further entrenched our poor savings track record.

“The reality is National this week has shown its hand. Bill English has made his move towards privatisation and loosened foreign investment ownership legislation.

“National is preparing the ground to enable the privatisation of NZ infrastructure by weakening legislative controls.

“Bill English says he doesn’t know what strategic assets are, and so is dumping restrictions on their sale to overseas buyers. Well, in Labour we know, and are surprised that he doesn't.

"Labour favours foreign investment in manufacturing industries, but there is no need to loosen existing rules to achieve this because those sorts of applications are not turned down now. What Labour opposes is the sale of important infrastructure assets, and that is what this rule change is designed to enable.

“Selling those sorts of assets – like airports and electricity generators - makes NZ poorer. It does not create extra jobs. New Zealanders lose the future profits (including the monopoly profits that infrastructure companies extract by virtue of their monopoly advantages).

“The foreign investors reap those profits, bank them offshore, and spend them outside of New Zealand. New Zealand gets poorer, not richer, over time by selling our infrastructure. New Zealand needs quality foreign investment, but allowing airports and electricity companies to be flogged off is not in New Zealand’s best interests.

“This is part of National's privatisation agenda. Who purchased the cornerstone shareholdings of Telecom, Contact and Air New Zealand when they were privatised?

“Overseas shareholders. History shows they benefited more than New Zealand.

“Using New Zealand’s poor savings record as a smokescreen for the sale of infrastructure and increased foreign ownership of New Zealand land is disingenuous.

“So is Bill English's folksy statement that the man in Gore doesn't care if he is employed by a NZ owned company or an overseas owned one, what he needs is a job. This implies there will be more jobs if we sell our infrastructure, which is just not true.

“National is laying the groundwork for increased privatisation. They should just admit it,” David Parker said.

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