Diatribe | Issue 10

Diatribe | Issue 10

I donít think everyone who opposes Crafar Farms is a racist. I do think they are wrong. I will be making a case for why we should allow sales of land to foreign owners and why that benefits us as a country.

Turning first to an important principle, the right to own land itself. In NZ we think it is a great thing for our citizens to own land. It is productive, helps our economy and it has intuitive personal benefits to the owner. Attached to the right to own land should be the right to profit from land you own. You should have exclusive possession and rights of transferability on it, that is the nature of ownership. Through blocking people from selling to the highest bidder we infringe upon the rights of ownership. It is undeniable that in at least a few cases the highest bidder will be from overseas, that is where the money is after all.

What is the reason that people believe we should restrict this right? I am going to dismiss the idea that the reason comes from the thought that this is an invasion of our sovereignty, which is stupid, the land remains under NZ jurisdiction. The fundamental point I have heard over and over is that the problem people have is that profits will leave NZ. There are three flaws to this idea:

Firstly, this idea raises an inherent tension with the right to own property, we wouldnít care if someone in NZ simply owned land and didnít use it profitably, but we do care if that person wants to make an individual profit and sell it to someone who does want to make use of the land.

Secondly, it is simply not true that NZ does not benefit. Again I would assert that most of the time the people who want to pay the most for the land also have the best ability to make it productive. In the case of farmland a foreign buyer will be treating it as an investment. They want it to make money, how does it make money, you need to up production of goods from it. How do you do that, employ people to work the land. Because the foreign buyer will want to make money off this land they are incentivised to hire local hands to work it for them. Employing NZ workers with foreign money does help our economy.

Finally, I want to talk about the benefit of the large individual cash injection. Through the selling of their land the previous owner has made a large profit. Given that they are presumably NZers that money goes into the economy, either through spending or local investments. It also raises the probability that savvy investors will invest offshore with this large chunk of cash. If we are to believe the rhetoric from Labour, this will mean that when a NZ buyer invests overseas, we will receive their profits.

†Sounds good to me.
This article first appeared in Issue 10, 2012.
Posted 12:51am Monday 7th May 2012 by John Brinsley-Pirie.