Labour will fence in land sales to foreigners

21:38, Aug 05 2014

Foreign purchase of more than five hectares of New Zealand farmland will be restricted under a Labour government, leader David Cunliffe says.

There would be no land sold to foreigners unless there was an "overriding economic reason" to do so, Cunliffe said on TV3's Firstline today.

"It will be a high bar, there will be only, I think, rare exceptions to the general rule that there will be no land sales to foreigners who are not resident in New Zealand, under a Labour-led government," he said.

The nearly 1 million hectares approved for foreign sale under the National government was a "scandal", and had to stop, Cunliffe said.

Labour's Finance spokesman David Parker said yesterday that Overseas Investment Office (OIO) rules allowed vast tracts of land to be sold with little public scrutiny.

Parker said the OIO's definition of a "large farm" had been "stretched beyond belief" by the Government which in 2010 said a farm had to be 10 times the size of an average farm to be considered large.

Not a single sale of rural farmland to foreign owners had been stopped since the definition was imposed, he said.

"That was weasel wording," he said.

"Those are massive farms and any New Zealander would agree."

The comments came as debate raged around the recent sale of large blocks of land to foreigners, reignited by news of the pending sale of two large farms to overseas buyers.

NZ First leader Winston Peters yesterday claimed the sale of a 1037ha station near Gisborne to foreign investors was underway.

His claim came less than a week after Conservative Party leader Colin Craig revealed Lochinver Station, in the central North Island, was awaiting OIO approval to be purchased by Shanghai Pengxin - the company that bought the Crafar farms in 2011.

Parker yesterday pointed to a 2010 ministerial directive from Finance Minister Bill English that set the bar for what constituted "large" sales - and therefore subject to OIO scrutiny - at 10 times the size of the average New Zealand farm for the relevant farm type.

The Government said at the time the changes were made to increase ministerial flexibility to allow a wider range of issues to be considered when assessing overseas investments in sensitive land and to provide clarity for potential investors and the OIO.

According to documentation from Land Information New Zealand, in 2010 the average sheep farm was 443ha, the average cattle farm 172ha, and the average dairy farm 105ha.

"This directive was issued at the same time National pretended it was tightening up the criteria for overseas sale of farmland," Parker said.

Not a single sale had been stopped under the new directive because the criteria was "so loose as to be meaningless", he said.

"Around the same time as [Prime Minister] John Key was reassuring New Zealanders that he didn't want to see 'very large tracts of land' sold off, his government was implicitly giving the green right to sales of large farms," Parker said.

"He never told Kiwis the definitions of 'large' was being stretched beyond belief."

Peters revealed yesterday he had learned an application was pending for the overseas sale of Wheturau Station at Whatatutu, 65 kilometres north of Gisborne.

Peters said the 1037ha farm was being sold for $5.5 million to unknown foreign buyers.

"How do we know it's being sold to overseas interests?" Peters asked.

"Because we called up the agents, Bayleys, expressing interest in buying, and were told it's already been sold offshore."

Bayley's Gisborne real estate agent James MacPherson confirmed there was "an agreement", over the sale of the farm and an application to the OIO was "likely to go ahead".

Key said had not heard the claims, but hoped Peters had his facts straight.

Earlier this year, Peters wrongly claimed Taupo's iconic Huka Lodge had been sold off to Chinese interests.

But Key also said he thought some parties had been disingenuous when it came to opposing foreign investment.

"I think what New Zealanders will see is that there's lots of things opposition parties say in the campaign trail, which isn't necessarily what they've done when they've been in government," he said.

"At least giving a little bit of credit to Winston Peters, over 30-odd years of his political career, he's been pretty consistent that he doesn't want New Zealanders trading with foreigners, welcoming foreigners, having foreign investment."