Matt McCarten: Foreign owners muscle in as New Zealand sells off all its assets

I had a chat with Murray Horton from the Campaign Against Foreign Control of Aotearoa this week. New Zealanders should be thankful that someone like Horton dedicates his time and energy to monitor and expose the creeping attack on our national sovereignty.

I know we've got to be careful not to become xenophobic about national identity, but we are really being swamped by foreign money.

Recent statistics of foreign control of our country are alarming. Direct ownership of companies in New Zealand by foreign owners has increased from $9.7 billion in 1989 to $83 billion now - a more than 700 per cent increase. Foreign owners now control 41 per cent of our sharemarket compared to 19 per cent in 1989.

In the past, the Overseas Investment Commission kept an eye on foreign investors. But, in August 2005, the government abolished this commission and replaced it with a scaled-down overseas investment office. This new entity was exiled into one of the government's weakest departments - Land Information New Zealand. They limited its role to only dealing with foreign investment of more than $100 million.

Even with a much reduced role, the overseas investment office approved $14.3 billion in sales in 2005 - double the yearly average in the previous decade. They also sanctioned the sale of 150,000 ha of farmland to foreigners. One hundred thousand hectares of that land was sold from one foreign landowner to another, so no money actually comes into New Zealand for it. Foreign-owned land now covers a million hectares or about 7 per cent of our commercially-productive land area.

Last March, Statistics New Zealand listed the biggest foreign owners of New Zealand companies as coming from Australia, the United States, the United Kingdom, Singapore and Japan. The corporations from these countries are making massive profits out of New Zealand. They are New Zealand's truly biggest invisible export. In the past decade, foreign investors have made $50.3 billion profit, of which 68 per cent was sent overseas. In some years, more was sent overseas than was actually earned. This means, for every man, woman and child in New Zealand more than $12,500 has been creamed off and sent overseas in the past 10 years.

If that's not bad enough, Horton claims that the great majority of foreign "investment" is spent on takeovers, not creating any actual assets. If our new foreign owners were creating high-paid jobs, I wouldn't feel so miffed. But they're hopeless when it comes to investing in real jobs. These companies only employ 19 per cent of the workforce.

Horton tells me that most of the time, when foreign investors buy up New Zealand companies, they cut staff and push down wages. The right-wingers who raised the mantra of foreign investment as a saintly endeavour surely must now see that it's out of control.

In 1984, the Labour Party ran a strong and successful campaign against Muldoon over his irresponsible management of the economy, which had created $16 billion in private and public foreign debt. It is a huge amount and it terrified New Zealanders who were persuaded by Roger Douglas, the then Finance Minister, to open the floodgates to foreign investment so we could pay off our debt. Since then, New Zealand has carried out the agenda of opening up the borders for foreign money, no matter which party was in power. The World Bank praises New Zealand as the most business-friendly country on earth.

But despite all the asset sales and takeovers, our debt, as of September last year, is more than 11 times larger than in 1984. Our present debt is now $182 billion. That's $45,000 for each person, or $100,000 a household.

Any honest economist will tell you that our debt is out of control and now stands at well over 100 per cent of our Gross Domestic Product (GDP). We're in debt up to our eyeballs and successive Governments have sold off most of our assets to foreign investors.

You won't have our politicians admit it, but this means that more political power in this country has moved to our new owners.

If you don't believe me, when was the last time you heard Winston Peters attack foreign investment? He formed New Zealand First on the basis of New Zealand independence from foreign control and we are many, many times worse off now.

Although most of us think that Labour and National are under more enlightened economic management, it's not true.

All the fundamentals put in place by Douglas and Ruth Richardson are accepted and indeed encouraged by the leaders of all of our political parties, with the exception of the Green Party and the Maori Party.

Every time I see another multi-millionaire or a corporation buying a mansion or pristine real estate, I despair. The nauseating spectacle of media gushing over these acquisitions is sickening. Our country is being gobbled up by non-New Zealanders who either treat us as a holiday destination or a place to cream off the cash at our expense.

And yes, I know we're supposed to embrace globalisation and get into the real world. But I'm afraid I just can't bring myself to play that game.

I just think that instead of being colonised by a country by force, we are becoming voluntarily colonised by private multinational companies.

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