All that glitters is not gold

  Murray Horton

An edited version of this was published on the Perspective page of the Press (7/2/12), under the title “Foreign Ownership Of Our Land Gives Overseas Investors Power”.

The Press editorial “Overseas investment a win-win situation for this country and investors” (February 4) makes assertions which cannot go unanswered. It uses phrases such as “a whiff of xenophobia” in relation to opposition to the sale of the Crafar farms to Chinese buyers. This perpetuates the slur that opponents of foreign control are “racists” or “xenophobes”. CAFCA has been campaigning on this issue since the 1970s. We have no argument with the people of any country, only their governments and the transnational corporations that are notionally from those particular countries. I say “notionally” because transnational corporations are simultaneously stateless and a State unto themselves.

Ultimately everybody in this country is a migrant, it is just a question of how long ago our ancestors migrated here, and we are all Pacific Islanders – in my case a blue eyed one with an Australian grandfather and married to an Asian, with a very big family in the Philippines . Neither I nor CAFCA has any argument with “foreigners” – I've had plenty of experience of being a “foreigner” in other people's countries and know that people are the same the world over, with differences only being skin deep.

Since 1997 CAFCA has organised the annual Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand – only once has it been won by an Asian transnational (and that was Japanese). I find the idea of myself being described as “anti-Chinese” deeply ironic – the oldest entry in my Security Intelligence Service Personal File records that I first came to the spies' attention, as a 1960s' schoolboy, for being “sympathetic to Communist China”. And it is plain wrong for the editorial to say that there hasn't been the same degree of opposition to land purchases by European buyers – it's only a few years ago that the burning issue was the sale of a much bigger block of land to Canadian singer Shania Twain. CAFCA was in the thick of that battle too.

So what's wrong with foreign investment? It can be summed up by the difference between owning or renting your house (and I've experienced both). Ownership is power; owners make the decisions; owners reap the rewards. For tenants, it might be a very comfortable tenancy, but that can change at the whim of the owner; there is no long term security of tenure; rent is dead money and there is nothing to show at the end of it. Present foreign investment policies are well on the way of turning New Zealanders into tenants in our own land – something which the Prime Minister has said that he doesn't want to see happen. Well, he's got a funny way of going about it.

The very language of this debate is misleading. The great majority of foreign “investment” is not investment at all, but takeovers, which don't create any new assets. One key myth is that “we need their money”. Actually transnational corporations make massive profits out of NZ ($10.3 billion net left NZ in the year to September 2011), so they need our money more than we need theirs. Their profits are NZ's biggest invisible export and are the main cause of NZ's very high current account deficit (which is not caused by “us” spending more than we save). That deficit only drops in times of economic crisis when the transnationals' NZ profits drop – which the neo-liberal economists and their political allies see as a bad thing. They scramble to reassure the transnationals that normal business will resume as soon as possible, meaning the unrestricted flow of money out of the country – which they see as a good thing.

Apologists say that “they pay tax here”. Don't assume that at all. In 2009 the four big Australian-owned banks settled out of court with IRD for $2.2 billion of taxes they had avoided (that settlement was for less than the sum sought, and avoided penalties which would have been imposed by the court). It was the biggest tax avoidance case in NZ's history. Right now IRD is pursuing a number of big Australian-owned companies through the courts for tax avoidance. I have already mentioned the sole Asian winner of the annual Roger Award. A financial analysis of that company's accounts revealed that it had paid no NZ tax in the previous five years and injected basically no money into the economy here, operating almost entirely on borrowed money. It was a liability not an asset to the NZ economy. And that is just one example that CAFCA studied in detail.

Another key myth is that we need the transnationals for our jobs. No we don't, they are not big employers (they employ less than 20% of the NZ workforce). The vast majority (four out of five) of Kiwi workers work for New Zealand-owned companies, which the transnationals need to enable them to operate their businesses in this country. Once again they need us more than we need them. Not only are they not big employers, in many cases they have actively contributed to mass unemployment and/or a serious downgrading of NZ workers' conditions (Telecom is the only example I need to give). And the other key myth (particularly relevant in light of the resumption of privatising public assets) is that selling things to foreign owners helps NZ's foreign debt problem. No, it doesn't – despite a quarter of a century of systematic public asset sales NZ's foreign debt has continued to balloon. Roger Douglas himself said (in an early 1990s' book on the sale of State forests): “I am not sure we were right to use the argument that we should privatise to quit debt. We knew it was a poor argument but we probably felt it was the easiest to use politically”. Nothing has changed since his commendable honesty.

Transnational corporations aren't shy when demanding that they be accorded preferential treatment, whether it is the decades old secret sweetheart power price for the Bluff smelter; the changed employment law and handout tens of millions of taxpayer's dollars to Warner Brothers so they would condescend to continue to film ”The Hobbit” in NZ; or the current demand by Sky City for a law change to allow more pokies in its Auckland casino in return for an offer to pay for a new convention centre. This corporate welfare means that the transnationals are the biggest bludgers in the country (not the much maligned solo mothers, who aren't in the same league).

Of course the foreign takeovers which attract the highest public attention and opposition are those involving rural land. The specifics change from decade to decade but the issue remains the same. The Crafar farms are just the latest focal point. Actually, of much more importance is the takeover, by other Chinese transnationals, of PGG Wrightson, a major NZ agribusiness. The prize is not the company per se but the fact that it has commercial rights to 90% of the technology on which NZ's grass seed manufacturing is based. To quote a seed company director speaking to a farmers' paper: “Having this technology controlled overseas was ‘like selling 5,000 farms to overseas buyers. Everyone was up in arms when it looked like 20 Crafar farms would be sold to the Chinese, but this is much bigger'”.

Every time there is controversy about some particular foreign land purchase, the apologists say “Well, they can't take the land with them”. Quite – and why would they want to, when they can own it here and milk it for all its worth (the company which now owns the Crafar farms is even called Milk New Zealand ). What a lazy argument. Ask Maori what happened when Britain colonised NZ – the British didn't take the land with them, did they, but that didn't seem to help Maori one bit. It's rather like saying Telecom can't take all the phones with it. Once again, why would they want to? They're happy to leave the phones here and take the money with them.

If we don't watch out, NZ's agriculture will go the way of the wine industry, which did all the hard work to establish itself as a keystone part of the economy and a player on the world scene, only to be progressively bought out by transnational corporations and to now have been reduced to being a bulk grape grower for foreign booze giants. They don't care if there is overproduction here and a consequent slump in the industry, because they can just concentrate on their more profitable operations in other countries. That is the essence of being a transnational corporation.

Land sales to foreigners are only part of a much bigger picture. Who owns and profits from our banks, supermarkets, media companies, telecommunications companies, airlines, transport companies, insurance companies, etc, etc, etc, is a matter of national significance which affects everyone in the country, one which is rapidly becoming a branch office economy dominated by transnational corporations.

Murray Horton
Secretary/Organiser