Norman Russel: Urgent Debates — Overseas Investment Rules—Sale of Crafar Farms 
Text is incorporated into the Bound Volume 
Norman Russel: Urgent Debates — Overseas Investment Rules—Sale of Crafar Farms 
[Sitting date: 14 August 2012. Volume:682;Page:4320. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak in this urgent debate around the Crafar land sales. I think this debate does raise some critical issues about economic policy for New Zealand. One of the critical issues is what to do about land. It is certainly true that the previous Labour Government approved the sale of a large amount of land into overseas ownership—the figure of 660000 hectares. It is certainly true that this current Government has approved the sale of about 230000 hectares since it has come into office. Since then I am pleased to say Labour has had a change of heart about this issue. I think there is nothing wrong with that. It is very strange that the Minister for Land Information should suggest that a party could change its mind and that that is a bad thing; actually it is a good thing. 
What has fundamentally changed in the global environment around land is that food security is becoming a critical issue globally. If you do not understand that fundamental reality of green economics then you will not understand this debate. The fundamental reality is that all around the world there is enormous pressure on food security and there is enormous pressure on food prices. We have seen big spikes in food prices. That has led many countries Governments and corporations to focus on buying up land so globally we have seen the big land-grab as it is called. We think—and the numbers are a little bit hard to get—that probably in the last decade we have seen that about 2 million square kilometres of land has been grabbed. That land has been grabbed by Governments like the South Korean Government and it has been grabbed by corporations. A lot of the Gulf States are very focused on food security so they have been buying up very large amounts of land. All of those Governments and corporations are very focused on buying land in order to maintain food security. It is a global phenomenon. You can read about it in  
New Scientist 
 although I cannot imagine that Maurice Williamson would ever read a science magazine. You can read about it. You can read about it there. Fred Pearce wrote an article about it. You can read about the global land-grab that is under way at the moment. 
That is happening because of resource constraints. Resource constraint is one of the fundamental ideas within green economics; it is one of the key drivers of what is happening to land prices and food globally. The other one of course is climate change. As the effect of climate change starts to happen what we are seeing is pressure on food-producing systems and access to water. Of course as global populations grow and get more wealthy land that can produce food is becoming more and more valuable. This is a global phenomenon. New Zealand land tends to be more expensive than land in other countries so our land has not been at the top of the list for the land-grabbing but there has been a significant amount of land that has been purchased in New Zealand and of course the Crafar farms deal is just a part of that. 
We need to actually take into account that global reality when we are setting our policy around foreign investment in land. Do we think that it is the right strategy to allow our land to fall into overseas investment? I would argue that it is a very poor strategy. Effectively this land is the goose that lays the golden egg. Our economic strategy—I think a smart Green economic strategy—is to sell the golden eggs rather than sell the goose. However the Government for short-term economic reasons wants to sell the goose. It is asking how it will fund the current account deficit. There are only two ways to fund a current account deficit: either you borrow more or you sell assets to overseas owners. What the National Government wants to do is sell more assets to overseas owners in order to fund the current account deficit and it wants to borrow more. We have seen that Government borrowing has gone through the roof. This Government has borrowed a huge amount. It is one of the biggest-borrowing Governments we have had in generations actually. So in order to fund the current account deficit what the Government proposes to do is sell off the remaining assets. We have sold off large amounts of capital assets when you think of the foreign dominance of the New Zealand Exchange. One of the last great assets that we can sell in order to pay for the current account deficit is the land. So what this Government is doing is saying: “Yes open door—you can buy the land. That is how we are going to fund the current account deficit.” 
I would argue that that is a very very short-term strategy. It is a much more sensible strategy to hold on to the land and use that as the base for our economy—that is sell the produce from the land. Sell the golden eggs rather than the goose. But this Government is intent it would appear on going down the track of selling more and more land into overseas ownership. 
That is part of a global trend so it is not surprising. All around the world Governments are grappling with exactly this problem. There are Governments like ours which have large amounts of land in Africa and elsewhere and large foreign corporations—in this case it is a Chinese Government - backed corporation Shanghai Pengxin—that want to buy food-producing land in order to send food back to their domestic market. That has produced enormous tension in legislatures like this one all around the planet. 
That is why the Greens have introduced a bill in my name to actually restrict the purchase of land into overseas ownership. We would amend the Overseas Investment Act so that in respect of sensitive land which is defined within the Act as 5 hectares or more of rural land you cannot allow that land to go into overseas ownership. It is a simple amendment to the Overseas Investment Act and the purpose is very simple—that is to keep the land in New Zealand ownership because that is a fundamental aspect. 
During this debate of course the Government has used personal attacks to attack anyone who disagrees with it. We have just had Maurice Williamson the Minister attacking people on the basis that they are migrants to New Zealand. The Minister attacked me because I am a migrant to New Zealand and he said that somehow that means I am not allowed to speak in this debate and that I do not have a valid position. Well I would say to the Minister that I am proud to be a migrant in New Zealand and I would say to all other migrants that they should be proud. Do not listen to the National Party— 
David Bennett 
: Ah you’re rubbish. 
Dr RUSSEL NORMAN 
: —when the National Party attacks people for being migrants in New Zealand and when David Bennett attacks people for being migrants in New Zealand. Do not listen to them. You are welcome here. We welcome migrants to New Zealand. We are very pleased to have a society where migrants are welcome. And we believe that land should be kept affordable so that every person who lives here—a permanent resident or a citizen—can afford to buy land here. 
What will happen if we have an open-door approach to foreign ownership of our land is that the price of land will get to a point where most New Zealanders cannot afford to buy it. The family farmer will become a figment of history an aspect of history because family farmers will not be able to afford land. If you look at the most recent case which we are debating today—the Shanghai Pengxin case around the Crafar farms—Shanghai Pengxin had such deep pockets that it could outbid Michael Fay. Michael Fay is an extremely wealthy New Zealander and he was outbid by this Chinese Government - backed corporation. 
The reason is that the Chinese Government has more than US$2 trillion which it is trying to turn into assets because sitting on US dollars when the US Government has the ability to print unlimited amounts of dollars is a very poor strategy. So the Chinese Government and other Governments very wisely are trying to turn those cash assets into real assets and buying up land is a critical part of that strategy. That is why they are able to outbid people like Michael Fay and they will certainly be able to outbid family farmers. So if there are family farmers who have aspirations to buy their own farm they will be outbid by foreign corporations because as land becomes more and more valuable those corporations will focus on buying up food-producing land particularly food-producing land with access to water. That is the fundamental reality and that is because we live within a resource-constrained world where food-producing land will only become more and more and more valuable. Large corporations and foreign Governments will target food-producing land because they are concerned about the price of food and food security. 
That is why we think it is essential that we protect that land. It is a fundamental economic strategy but it is also a fundamental social justice strategy. People should be able to afford to buy the land in the country they live in. If the price of land is driven so high that even Michael Fay one of the wealthiest New Zealanders cannot afford to purchase the land and is outbid by Shanghai Pengxin an overseas corporation backed by a foreign Government it means that ordinary family farmers will not be able to afford to purchase land. That is what National is proposing. What National is proposing with its strategy of an open door is that ordinary family farmers will not be able to buy land in New Zealand. 
Our view is that ordinary family farmers should be allowed to buy land in this country. We can achieve that only if we restrict overseas ownership of land because the overseas ownership of land will drive the price out of the reach of ordinary New Zealanders and it will be only the large conglomerates large international corporations or large Government-backed organisations—and the Gulf States are very active in this space—that will be going around the planet purchasing land. I have no idea whether National is aware of this or not but this is a global phenomenon being driven by resource constraints. 
The smart Green economic strategy is to hang on to these assets to hang on to the land because food-producing land over time will only become more valuable. It is intimately connected to New Zealand’s economic advantage overseas which is clean green and safe. Clean green and safe is fundamental to the New Zealand brand; it is why we are selling large amounts of dairy into China at the moment. So maintaining land—maintaining it in New Zealand ownership—is fundamental to New Zealand’s long-term economic future. That is why I have my bill before the House and that is why I urge all members to vote for it.