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The National party have decided to block the sale of an ironsands business.
This is worse than when Labour blocked the airport sale, for two reasons.
1) We're now in a recession. The last thing we want to do is stop foreigners from investing in New Zealand. If you were a wealthy Asian businessman (say), why on earth would you consider investing in a country that may arbitrarily block your transaction? That's a whole lot of wasted time and effort. New Zealand is not an island. Economically speaking. We need this sort of capital investment if we are to have any hope of growth in the future. At least when we were still in the black we could have sucked it up a little bit.
2) It's an ironsands business! It's not even an airport, or a powerlines, or something that is a particularly 'strategic asset'. The idea of the Government tying up billions of dollars so we own all the cool stuff in the country is one that makes no sense to me. Perhaps this can be attributed to my personal inadequacies, however.
But to paraphrase Lincoln, if a business that sells sand is not a case for privately controlled ownership, nothing is.
Thursday, December 18, 2008
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"Others suggested the move may have been influenced by Maori."
ReplyDeleteFor some reason that bit of the article stands out. Think it's the tone.
re: your concerns about New Zealand being a "country that may arbitrarily block your transaction", I would like to know how you think this makes New Zealand unique. Are you aware of Australia's Foreign Investment Review Board?
ReplyDeleteSure. I hardly think the rest of the world is a cosmopolitan utopia.
ReplyDeleteBut firstly, Australia do it far better than we do. As you say, they have board, with a set of guidelines (which was an act of Parliament) in order to make consistent decisions. So even if they are interfering with investment, they do so in a broadly predictable way, reducing uncertainty among investors. In New Zealand this does not happen. We allow foreign nationals to buy the Wellington powerlines, but not sand companies. So investors faced with this uncertainty will be less likely to bother at all.
That is not the only problem. Blocking just about any foreign investment is misguided. If Iran or North Korea wanted to buy up Australia's uranium, you could perhaps make a case for blocking that. But otherwise there is no reason to, whether or not others engage in the practice.