Woolerton R Doug: Questions for Oral Answer — Questions to Ministers Questions to Members 
Woolerton R Doug: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:646;Page:15255] 
2.  
R DOUG WOOLERTON (NZ First) 
 to the  
Minister of Finance 
: What was the total value of foreign investment inflows into New Zealand in the year ended 31 March 2008 and what was the total value of income derived from foreign investment in New Zealand in the same period? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 In the year to 31 December 2007 which is the last period for which we have the numbers total foreign investment flows into New Zealand totalled $26 billion. This comprised $3.9 billion of direct investment $16.1 billion of portfolio investment and $6 billion of other investment. In the year to 31 December 2007 income flows derived from foreign investment in New Zealand amounted to $16.2 billion. 
R Doug Woolerton 
: Can the Minister confirm that the total value of income derived from foreign investment in New Zealand in the last 5 years equates to more than the total core Crown revenue in the last financial year and is he concerned that foreign investors are extracting the equivalent income from New Zealand investments each year of more than a fifth of the Government’s total annual revenue? 
Hon Dr MICHAEL CULLEN 
: I do not have the numbers to confirm the first part of that question but from a rough estimate in my head I am sure that that would be correct. I can confirm that those income flows are very substantial indeed. Of course one of the issues is that that reflects the high level of dependence by New Zealand on offshore borrowing for its investment purposes and the only answer to that at the end of the day is to increase New Zealand’s own internal savings rate. It is therefore worth repeating again that the National Party has voted 40 times against the KiwiSaver scheme. 
R Doug Woolerton 
: Is he happy with the current situation that sees around 10 percent of New Zealand’s GDP each year ending up lining the pockets of overseas investors and would he agree that such figures show that the idea of boatloads of cash departing New Zealand for foreign shores is not too far from the mark? 
Hon Dr MICHAEL CULLEN 
: It is of course worth reminding ourselves that not all of that income flow is repatriated offshore; a good part of that is reinvested back within New Zealand. Indeed our figures on foreign investment flows and on the current account assume that any income earned by an offshore-owned entity is in fact booked against if one likes New Zealand in that regard. Am I happy with that situation? I am not happy with a situation where our own savings rate is so low that we are excessively dependent upon foreign investment flows. I think it is true to say that New Zealand will be needing at any time for the foreseeable future significant inflows of foreign investment in order to enable this economy to grow and develop. 
R Doug Woolerton 
: Would the Minister agree that an ever-increasing flow of foreign investment into New Zealand and the massive extraction of profits from that investment means that increasingly more Kiwis find themselves working for foreign masters while receiving fewer of the benefits of their labour? 
Hon Dr MICHAEL CULLEN 
: I am not really sure that that is entirely true. A good part of those capital flows coming into New Zealand is in fact borrowings by the banks in New Zealand from offshore to on-lend into New Zealand because of the cheaper availability of capital until recently particularly offshore. It is by no means true that necessarily what that leads to is more New Zealanders being employed by offshore companies. Much of that money is invested back into New Zealand - owned businesses and into New Zealand housing stock owned by New Zealanders. 
R Doug Woolerton 
: I seek leave to table figures from Statistics New Zealand showing the increasing flow of foreign investment into New Zealand. 
Document by leave laid on the Table of the House. 
R Doug Woolerton 
: I seek leave to table figures from Statistics New Zealand showing the increasing income derived from foreign investment in New Zealand. 
Document by leave laid on the Table of the House.