NZ farms eyed as 'boltholes' for world's super rich
New Zealand farms are being snapped up by the world's super-rich as boltholes to escape anger over financial inequality, one of the world's leading fund managers claims.
"I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway," former hedge fund director Robert Johnson has told the Davos World Economic Forum.
Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros Fund Management, told a standing-room-only session at the economic summit in Switzerland that the farms, homes and land were being purchased so the rich could flee here should people rise up.
He has won headlines internationally with The Guardian saying the comments came against growing inequality and with the civil unrest from Ferguson and the Occupy protests in the United States fresh in people's minds.
It quoted Johnson saying societies could tolerate income inequality if the income floor was high enough.
But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality was increasing.
"People need to know there are possibilities for their children – that they will have the same opportunity as anyone else," he said.
"There is a wicked feedback loop. Politicians who get more money tend to use it to get more even money."
The Guardian quoted former New Zealand prime minister and now UN development head Helen Clark claiming, rather than being a game-changer, recent examples suggest the Ferguson movement might may soon be forgotten.
"We saw Occupy flare up and then fade like many others like it," Clark told the Guardian.
"The problem movements like these have is stickability. The challenge is for them to build structures that are ongoing; to sustain these new voices."
Britain's Daily Mirror said the "secret boltholes" are being set up in places like New Zealand as many financial leaders feared they could become targets for public fury.
Johnson, said the economic situation could soon become intolerable because even in the richest countries inequality was increasing.
The Mirror said Stewart Wallis, executive director of the New Economics Foundation, backed the claims.
"Getaway cars, the airstrips in New Zealand and all that sort of thing - so basically a way to get off," Wallis told CNBC Africa.
"If they can get off, onto another planet, some of them would.
"I think the rich are worried and they should be worried. I mean inequality, why does it matter?
SECRET BOLTHOLES IN NEW ZEALAND
If billionaires are trying to hide out in New Zealand, they're not going unnoticed. These are some of them:
- Russian steel billionaire Alexander Abramov is building a lavish $50 million retreat at Helena Bay in Northland, on the road to Russell. It comes with boat ramps and helicopter pads.
- US film director James Cameron says he is fleeing Hollywood and has bought a decent chunk of Wairarapa ahead of taking out New Zealand citizenship.
- Canadian singer Shania Twain put her heart and soul into $21.5 million Motatapu Station near Queenstown – but it turned out her husband Mutt Lange was having an affair with her secretary and Twain sold the bolthole.
- Another Russian billionaire, Mikhail Khimich, lives here and owns Waiwera Water, north of Auckland. His ambitious expansion plans have yet to materialise into anything extravagant other than his big yacht Thalia.
- Canadian billionaire Lawrence Stroll is spending five months here in a very large campervan. The man behind the fashion labels Tommy Hilfiger and Michael Kors can just drive away if he needs to.
- Seattle-based editing software pioneer Paul Brainerd is planning to develop the Glenorchy Holiday Park as a model for environmental sustainability and has opened a general store at the "top of the lake".
- If the term bolthole ever applied in New Zealand, it was in the 1990s when Tommy Suharto, son of Indonesia's then-president, owned Lilybank in the South Island's Mackenzie Basin. He used to fly rich friends in for hunting. After the president lost power, the farm was sold.
- Sultan Haji Hassanal Bolkiah, better known as the Sultan of Brunei, owned at least 11 properties in Auckland, including a number in Herne Bay, but as he never visited here they may not qualify as boltholes. He still owns the BNZ centre at 125 Queen St.
- And then there is the new mystery billionaire, vodka king Yuri Shefler. His huge frigate-sized superyacht Serene sailed out of Auckland this morning, heading for the Milford Sound – that would make a great bolthole.