John Key pours cold water on sales to foreigners

Prime Minister John Key during his post-cabinet press conference in the Beehive Theatre. Photo / Mark Mitchell

Prime Minister John Key has downplayed concerns about the sale of large tracts of productive land to foreign buyers, saying the trend was not "alarming".

KPMG's Foreign Investment in New Zealand report, released today, showed increasing foreign investment in land, forests and other productive assets in the last two years.

The survey, which was based on Overseas Investment Office (OIO) reports, showed Canadians were the biggest foreign investors in New Zealand since 2013.

Speaking to reporters at his weekly press conference this afternoon, Mr Key said the OIO data did not provide a complete picture because it only included investment above a specified threshold.

The OIO only required notification of investments worth more than $100 million unless they involved fisheries or culturally sensitive land.

Mr Key said the data also did not take into account land sold back to New Zealanders by foreign owners.

He said the report would "shatter some of the thoughts" that China had a monopoly on foreign investment in this country.

However, the survey showed a significant rise in Chinese investment, from 5.3 per cent of all investment in the last survey to 14 per cent in most recent survey.

Mr Key said the type of investments that Asian countries were making in New Zealand agribusiness was important. Many of the investments were in processing and sectors which added value to commodities.

The Prime Minister was also asked about the finding that 5 per cent of New Zealand's productive land had been sold offshore in the last five years.

"I don't think it's alarming," Mr Key said. "I think what you're seeing is some purchases go offshore but not an uncontrollable amount."

Opposition parties disagreed. Green Party co-leader James Shaw said 40 per cent of gross overseas investment was concentrated in agribusiness, energy and large scale real estate -- which he said meant New Zealand was "losing ownership of the building blocks of our economy".

Mr Shaw said the sales of forests and farms made it more difficult for New Zealanders to control the value chain, and allowed overseas companies to build huge profits from the country's natural resources.

Labour's land information spokesman Stuart Nash said the report showed the glaring omissions in government's data, because it did not reveal the value of the foreign investments to New Zealanders and the economy.

He said it was not enough for the Government to report on the quantity of the land that is being sold offshore, and the Overseas Investment Office was failing to report whether promises by foreign companies to add value were being kept.

"Since 2005, 716 investors were given the right to purchase sensitive land ... and had to quantify what the additional value is that they would offer. But we have no idea whether these promises are being kept or whether the international investment is adding real value to our economy."

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