INDEPENDENT NEWS

Q+A: Mark Mitchell interviewed by Jessica Mutch

Published: Sun 19 Mar 2017 12:11 PM
Q+A: Mark Mitchell interviewed by Jessica Mutch
LINZ Minister: We are closely monitoring foreign land sales
Minister for Land Information NZ, Mark Mitchell, says the process of foreign owners buying New Zealand land is robust and investors have to show how they can benefit our country.
“I don’t accept that there’s a big buy-up of New Zealand land at all,” the Minister said on Q+A this morning.
He said there had been instances where authorities had taken action against a foreign land owner who had failed to meet their obligations under a sale agreement.
“I can’t give you a ballpark figure. All I can say is that there have been breaches and we have acted on them,” Mr Mitchell said.
“I think that the percentage of land that goes into foreign ownership and attracts foreign investment is actually very small, in terms of you know the productive land that we have in New Zealand.”
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Q + A
Episode 172
MARK MITCHELL
Interviewed by JESSICA MUTCH
MARKWell the purpose of the OIO office is to make sure that every application is always in New Zealand’s best interests. And I think that – so in relation to Hunter Valley, just a little bit of context around that, Jessica, was that the same family has been faithfully farming Hunter Valley for decades. They’re older now; they want to retire. They’ve had the station on our local market now for five years looking for a local or Kiwi buyer. They haven’t had much luck. And, of course, they’ve had very strong interest from an offshore buyer that’s obviously got a real passion for the area. In terms of the public access, actually, the public access wasn’t that great. It is an operational farm, and of course, when it’s an operational farm, you’ve got to be careful around who’s moving across, especially with open access. But under the OIO application, actually we have increased public access.
JESSICABut in this specific case, though, they weren’t already negotiating with the council to try and get access through to that DOC conservation area and through to the lake of this very iconic property. They now don’t, and those locals there feel as though they’re missing out because of this American buyer.
MARKThose are two separate issues is that people can actually apply to the council to get access – or even through the Commissioner for Crown Lands. But what the OIO has done is they’ve made sure, through their process, which is quite separate, that actually public access is preserved and is actually being strengthened.
JESSICAThat’s part of the act, of course, as you know – that you have to think about that. But in this case, was due consideration given? Because a lot of the locals feel as though this has been done by stealth, and they’re missing out on going for a walk in somewhere that they’ve walked in for decades.
MARKNo, I can assure you that they’re not going to miss out on going for a walk. In fact, the public access has been increased as part of that OIO process. And, of course, the OIO office is always focused -- their primary focus is making sure that there are tangible benefits above and beyond what would have otherwise been a local sale.
JESSICABut just not walking access, in this case.
MARKNo, walking access has been increased too.
JESSICABut it’s a goat track, though; you have to be a very experienced tramper or climber. We’ve been told that if you’re just a regular walker like you or I, you would struggle to get across there.
MARKI’ve been told that I could get across there.
JESSICAMaybe just me, then.
MARKSo no, the access is very good. They’ve got access to the camp there. They’ve got access to an additional hut that’s on the station. There’s definitely been an increase in terms of public access. And some of these walking groups actually have got other options open to them to continue to look at increasing that access, as well.
JESSICABigger picture, though – are you concerned that this is happening more frequently? We’re having a big buy-up of New Zealand land, and a lot of New Zealanders are really concerned about it. Can you see their point?
MARKNo, I don’t accept that there’s a big buy-up of New Zealand land at all. I think—
JESSICAThere were 466 hectares – we’ve got those numbers from the OIO – and that was five times more than 2015, so 466 hectares in 2015—in 2016, rather.
MARKThe way that that’s captured is technical, but what I can assure you of is that in terms of the net sales, they’re pretty consistent over the last decade. And we’re very conscious of that. We look very, very closely at that. And the OIO process is extremely robust in terms of--
JESSICAThese are figures, though, minister, in fairness, from the OIO and show that it’s nearly five times more in 2016 than it was in 2015.
MARKI think, Jessica, it’s the way that number’s been interpreted. Some of those OIO applications that go through that involve land also involve Kiwis.
JESSICABut it’s foreigners having a finger in all these different pies.
MARKThe actual — so the net land that’s actually gone into foreign ownership is the same, and it’s been consistent over the last decade.
JESSICANew Zealand First wants a register. Why won’t the government do that?
MARKI’m not going to talk about New Zealand First policy. I’ll just say--
JESSICAWhy won’t the government do a register, then?
MARKSo the government, in terms of—certainly from my office in the OIO, we are watching very, very carefully, and we have got a very robust process that is focused solely on making sure that any foreign investment—Actually, some foreign investment into the country is really important because, as Kiwis, we like to engage and invest in other parts of the world as well, and we’re an open economy, we’re recognised as being a very strong open economy, so good investment is good.
JESSICAIs it robust, though, minister? Because we can’t quantify how much of New Zealand land is actually foreign-owned. The OIO looks at iconic and special land, but a piece of land that’s owned by a Chinese buyer or a Russian buyer that might be quite beautiful but doesn’t meet that iconic status, that’s not captured in those figures.
MARKI think that Statistics New Zealand actually is developing processes that allows us to capture a lot more of that information.
JESSICABut it’s not robust now, is it?
MARKIt’s getting better and better. And in terms of the OIO, we are able to monitor and watch very carefully, in terms of the applications that are coming through the office.
JESSICABut can New Zealanders find out exactly how much New Zealand land is owned by a foreign buyer?
MARKWell I know certainly, through the OIO, you’ve just quoted some figures and numbers there, so we can clearly demonstrate and show what applications we’re dealing with.
JESSICASo yes, you can tell us exactly how much land?
MARKCertainly from the OIO’s perspective, and that’s the portfolio that I’m responsible for, so the answer is yes. But I think that it’s really important to note that when we’re talking about offshore investment and overseas capital, which is actually really important, fundamentally, to our economy, is that we have got a very extremely robust process that they have to go through before that actually gets signed off. And before it’s signed off, there’s got to be clearly identifiable benefits that go in as part of the conditions before that investment happens and goes forward.
JESSICALet’s talk about that process, then, because another concern that came up with people that we spoke to is they feel like they don’t have a say in the process; they don’t know when a transaction is imminent, when a foreign buyer is coming in, and feel like they don’t have a chance to say, ‘Hey, this is how it’s going to affect us.’ What do you say to that?
MARKI think, in terms of—If we take Hunter Valley Station, for example, that was on the open market for five years, so people were aware that the owners were trying to sell it. It’s actually a leasehold station, so they’re trying to sell the leasehold. And actually under the OIO, there is a requirement before any transaction goes through in terms of foreign ownership that it is actually gone out and advertised in the open market so people are aware of it.
JESSICABut people like Fish & Game say they’re just not being consulted.
MARKWell they, people are able to engage with the OIO if they have got a view or they’ve got information that they want to share around the transaction.
JESSICAIn terms of the deal, for example, that people might promise that they will clean up a conservation area or build a walkway, and that’s part of the sale agreement, do you check up on whether they actually do it? And how far do you take it? Do you actually say to them, ‘Look, if you haven’t met this requirement by this time…’? How does that work?
MARKSo part of the OIO process, there are a set of conditions that have to be met, and the OIO will continue to monitor those.
JESSICADo you follow up, though? And what happens? Could you reverse the sale?
MARKYes. Absolutely it could reverse. There could be a disposal of the asset. That would be the final step. Before that, there’s a whole range of options, starting with a written warning through to fines and then, possibly, the disposal of the asset.
JESSICADo you require the public to notify you about that, or do members of the OIO go out and monitor and check?
MARKNo, it’s a combination. The public certainly can notify us, the actual investor themselves is required to notify us if they feel like they can’t meet one of the conditions attached to the OIO approval, and, of course, we also go out and enforce ourselves.
JESSICAHow many breaches have there been, minister?
MARKThere have been several breaches that we have taken action on.
JESSICACan you give us a ballpark figure?
MARKI can’t give you a ballpark figure. All I can say is that there have been breaches and we have acted on them.
JESSICAIn terms of this whole situation, the locals and some New Zealanders in these situations do feel nervous. They do feel like this is happening without them knowing about it. Is it time for the government to sit back, take a breath, perhaps have a register, have something where the public feel as though it’s more transparent? Do you feel like the government should be doing that?
MARKI think that we should be listening all the time in terms of if there’s a way to improve a process. And actually, me as minister, welcome that sort of input, and I’ve had meetings like that since I’ve taken over the portfolio. Now we’re Kiwis, and we love owning property, and we have a keen interest in property, so it’s only natural that we have a real interest in how we’re actually managing—
JESSICADo we risk, though, becoming tenants in our own country if we continue to let this happen?
MARKNo, I don’t think we do. I think that the percentage of land that goes into foreign ownership and attracts foreign investment is actually very small, in terms of you know the productive land that we have in New Zealand, so I don’t feel like there’s any risk of that at all. And the fact that we’re monitoring it and watching it very, very closely also reinforces that.
JESSICADoes it matter to you who owns the land?
MARKUm, it matters to me in the sense that if we’re going to have some foreign investment, we should welcome that. We are an open economy. I’ve just been up to India with a business delegation where we’ve got Kiwis that are doing very good investments up there—
JESSICABut does it matter to you who owns our land?
MARKIt matters to me that whoever is going to come and want to own a piece of New Zealand is that they’re passionate about New Zealand, is that they have a genuine interest in us and want to invest in us, and that they are actually going to deliver real benefits to us. And that’s what matters.

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