KEY POINTS:
Australia owns most of our banks. Americans took control of Telecom, made a killing and sold out. Fay Richwhite and their American partners ground down the state railways, made a killing and got out. Today, Australians own the trains and although the Government bought back the tracks recently, a huge investment was needed to fix them up.
The French run bits of Auckland's consumer rail system, TVNZ is still state-owned but much of our broadcasting is owned offshore. So, too, the print media, including the Herald. Even supermarkets are ruled from over the ditch.
The fact is, a lot of New Zealand's assets and businesses are already owned by foreigners. When an Arab country announced last week it wanted to buy a controlling stake in Auckland's international airport a long-standing opponent of foreign ownership, New Zealand First leader Winston Peters, was quick to protest.
"On what basis could the Government consider a deal which allows a foreign takeover of arguably our most important strategic asset," he said to the Herald.
Some say he and like-minded critics of foreign-ownership are xenophobic, but concerns have long been held that New Zealand no longer owns New Zealand - from so-called strategic assets to businesses and an increasing amount of land.
This time last year David Skilling, of the New Zealand Institute, went as far as to say foreign ownership is so high we are in danger of becoming a nation of employees.
Yet the Dubai bid for the airport is not so out of the ordinary. Heathrow Airport in London is owned not by the British but by a Spanish company. And New Zealand company Infratil owns not only Wellington Airport but airports in Glasgow, Kent and Germany.
Viewpoints on whether it matters who owns what vary widely. Bryan Gaynor, an investment analyst, says a huge amount of New Zealand's strategic assets are owned offshore. What puzzles him is that New Zealanders are so blase about it.
Australia, for example, has "very strong" regulations regarding domestic ownership. Airports have to be 51 per cent Australian-owned, as do banks and media companies.
"I think we're going to wake up some day and realise," he says. "I think our generation, in particular, will be severely criticised by future generations for selling things off."
Gaynor finds it ironic New Zealanders believe so strongly in individual home ownership yet let national assets slip away.
He also finds ironic that they do this at a time when the indigenous population is doing everything it can to retrieve assets lost to them 150 years ago. Maori understand the importance of ownership, he says, but Pakeha society just does not care.
Care they should, he thinks. When Gaynor, who is Irish, arrived in New Zealand more than 20 years ago, the main banks were still mostly owned in New Zealand. They have since been sold and the difference is they are run to suit Australian owners. Flow-ons, for example, are lending practices. Gaynor says banks have taken a low-risk approach and instead of lending to business, prefer to lend to people borrowing against housing.
The biggest impact of all, though, is the $2 billion of dividends flowing out from New Zealand every year to Australia. This loss of funds has a big impact on our balance of payments.
"And that's just four overseas companies, that's just four banks, that's not counting all the other companies that are overseas owned."
Gaynor is not opposed to foreign ownership. He just does not like the way New Zealand goes about it.
The best foreign ownership is when companies come in and build new operations - as happened in Ireland - creating jobs and exports.
"You know, when you go into your Microsoft Outlook today it probably was manufactured in Cork in the southern part of Ireland," says Gaynor. "If you have a Dell computer at home it was probably made in Ireland. They were all things that started from scratch."
New Zealand, though, tends to facilitate the sale of existing companies.
"Obviously, if an overseas investor has a choice of buying something that's already up and operating and can buy cheaply, compared to actually starting something off from scratch with all the rules and regulations and no assistance, they'll pick the approach taken in New Zealand."
Practically the opposite view is held by Brent Layton, the director of the New Zealand Institute of Economic Research, an independent think-tank.
He says "chill out" to Winston Peters and the Greens and anyone else feeling nervous about the Dubai bid.
In the muddy world of investments and markets, what the data doesn't usually show is how much of offshore assets are owned, at least in part, by New Zealanders.
The banks, for example, are not Australian-owned, he says, "because New Zealanders own bits of them. Oh, it more than muddies the water."
Although not easy to track down exactly how much is owned by whom, neither does it matter, he says.
Capital is globally mobile and New Zealanders, through superannuation funds and investments via insurance policies, and through direct investments, own things all over the world.
Take the taxpayer-funded Cullen Fund, the Government's superannuation fund, which has interests in myriad offshore investments.
The real issue, says Layton, is how foreign owners behave in the marketplace.
"Do they follow the law? Do they pay their taxes? Do they act as good corporate citizens? You'd have to say there's no systematic bias that you can identify for offshore owners."
The way to deal with corporate behaviour is not through ownership but through good corporate governance laws, such as the Commerce Act, the Companies Act, the Inland Revenue Act, the Environment Act, the Resource Management Act and more.
The checks and balances are already in place, Layton says.
He also questions the notion of what are strategic assets. Does that mean, he says, investing in an asset when it is uneconomic?
"I've got a saying about strategic assets. People describe an asset as strategic when they can't think of a good business reason to invest in them but they still want to do it for political reasons."
And neither has he any issues with profits going offshore because cash initially comes onshore and can pay for things upfront or be reinvested.
Economist Brian Easton argues, too, that the regulatory environment matters more than ownership.
Take Telecom. When privatised, the Government did not worry about its regulatory framework and Telecom was left as a virtual monopoly.
We have spent 15 years trying to untangle the monopoly and have been left with one of the worst telecommunications situations in the OECD, Easton says.
"I think in a sense that was true for both railways and for the airways. You see, there was never a serious competitor against Air New Zealand. You may remember, in fact, they even leased the planes to Ansett and wasn't it to give the impression there was some competition going on?"
Groups such as the Campaign Against Foreign Control of Aotearoa care a lot about foreign ownership. Researcher Bill Rosenberg, from Christchurch, says dividends going offshore are the main drivers of our continual current account deficit.
To Layton's "chill out" Rosenberg counters that just because New Zealanders might hold shares in offshore companies, there are other big issues.
Shareholding might reflect where the dividends flow, but that does not mean the shareholders control a company. The real issue is who the main beneficiary is and who has the main control.
The Overseas Investment Act defines overseas ownership as a stake of 25 per cent or more but Rosenberg says that is a conservative figure. The International Monetary Fund defines ownership as 10 per cent or more - and that is because a relatively small, concentrated shareholding can exercise control.
"If you look at someone like Ron Brierley, I wouldn't have thought his shareholding in Guinness Peat [an investment holding company] is all that high, but it's certainly high enough for him to have significant control, simply because he's got the history of it and he's got a concentrated block where others don't."
Whereas New Zealand has the Cullen Fund, and the Canadian Pension Plan made an earlier bid for Auckland's international airport, these types of Government funds are tiddlers compared to an increasing number of massive state funds, known as sovereign wealth funds, which are raising big concerns in Europe.
Countries with enormous wads of spare cash from oil and other natural resources - the idea being that when the oil runs out the cash will still roll in from foreign investments - are buying up stakes in Western assets and firms.
These state funds are powerful, collectively estimated at being not in the billions of dollars but in the trillions. The European Union is so worried it is contemplating introducing controls on them.
Ask David Skilling, who last year said New Zealand was becoming a nation of employees, how serious foreign ownership is and he says we already have one of the highest levels of foreign ownership there is.
Foreign investment in the New Zealand economy is a little over 50 per cent of GDP and half of that is Australian ownership. There is reason to be concerned, he says.
It means the potential airport transaction is not unusual, simply representing the fact that New Zealand does not have a lot of domestic capital but a lot of foreign capital.
The thought of more of the economy going into foreign ownership is disappointing, but that does not necessarily mean we should declare the airport strategic and block Dubai.
In fact, we have to be very careful about blocking foreign takeovers because at fault are not the foreign investors - but New Zealanders.
"The issue of why there is so much foreign ownership is more to do with ourselves in terms of our collective attitudes towards savings as opposed to consumption."
Putting up East German-style barriers to foreign ownership may sometimes make sense, but only with very solid grounds.
"If we start blocking foreign capital coming into New Zealand, we're going to be incredibly short of capital."
When America recently blocked Dubai interest in New York ports, where foreign companies have long dominated, the concern wasn't really security issues, just politics.
Infratil chief executive Lloyd Morrison won't specifically comment on the Auckland Airport bid. But, despite his company owning foreign airports, Morrison cautions we should be very clear about what is the advantage of the foreign investment.
New Zealand needs successful corporates and foreign investment can bring capital not otherwise available, and expertise. The issue is not so much whether too many of our assets have gone but that they have gone too cheaply, he says.
"There are numerous examples of directors who see their job to create auctions for assets rather than create a strategy which delivers long-term value for New Zealand and I think that shareholders are guilty in New Zealand of that as well."
He doesn't see similarities with his airports and Dubai's bid for Auckland.
"The airports we own offshore are very much secondary airports and we also bought them from very poor operating positions and our aim is to improve that, so we're bringing to those airports a huge management resource, skills and capital that wouldn't otherwise be there."
Auckland, on the other hand, has a good management team, strong market position and good capital.
For Gaynor, the issue with Auckland's airport is that it is another big strategic asset in danger of slipping away. Yes, Heathrow might be owned by the Spanish, he says, but Heathrow is just one of a number of airports flying people around Europe.
In New Zealand, Auckland is the gateway and the only one. Around 95 per cent of international traffic goes through Auckland.
The airport is unique, Gaynor says, and impossible to put a value on - "and it's not replaceable."
