Crackdown on foreign land sales

By KEVIN TAYLOR, political reporter

The Government has signalled a crackdown on the sale to foreigners of "iconic" land with historic, cultural or environmental significance.

Finance Minister Michael Cullen yesterday announced a review of the 30-year-old Overseas Investment Act.

Details of what controls may be placed on foreigners seeking to buy land in New Zealand are not yet known.

But Dr Cullen indicated the Government was responding to growing public concern about foreigners buying sensitive coastal and high-country property.

"The Government needs to respond to those concerns. Legitimately we are controllers of our own country."

He said the review would simplify processes and give New Zealanders greater confidence they were not losing ownership of their own country.

Other worries about foreigners buying property have included rising land prices putting land out of the reach of many, the environmental impact, and the loss of access to coastlines.

The Treasury-led review will consider:

* Whether the criteria for approvals should be extended to include cultural, historical and heritage issues.

* The future and structure of the Overseas Investment Commission.

* Whether company purchases should be removed from the commission altogether and be brought under the Commerce Act.

The review started last month and the Government aims to produce legislation by next June to come into force in 2005.

The Government's announcement comes soon after the Los Angeles Times ran an article about Californians flocking to New Zealand to buy property.

American investor Alan Trent, whose purchase of 202ha for housing at Ruby Bay near Nelson sparked controversy, said the negative responses came from a small group of people who "don't have that much, don't even own their own homes".

Dr Cullen said public concern around loss of land "had legitimacy".

"Losing ... ownership of some of those areas like in the South Island high country, most New Zealanders do feel strongly about."

He said the current law was a "broad blunderbuss".

"It doesn't target clearly enough those things that most New Zealanders are most concerned about.

"It effectively deals equally with the sale of a major South Island high- country property with an Auckland subdivision, and you have to ask whether that's actually a terribly sensible way of going about the issue of controls."

Between 1998 and 2002 the commission granted approval for foreign applicants to buy 1.03 per cent of New Zealand's total land area, about 278,000ha.

Between 1997 and 2002, the commission approved the sale of 10,678ha of coastal land to foreigners, accounting for an estimated 26.7km of coastline, equivalent to 0.18 per cent of the total.

Sometimes criticised as a rubber stamp, the commission approved 92 applications in the first half of this year to buy nearly 12,000ha of land of all types.

Americans bought the most, followed by Japanese and Saudi Arabians. About 5000ha was bought in the Gisborne-Hawkes Bay region, nearly 4000ha in Canterbury and 701ha in Nelson-Marlborough.

Act rural affairs spokesman Gerry Eckhoff said the clampdown was bizarre and draconian and would make New Zealand the laughing stock of the world.

"Labour and the Greens' archaic attitude towards foreign investment would be the envy of poverty-stricken Albania and North Korea."

But Greens co-leader Rod Donald said the announcement was a "giant con job" that was about chasing a free trade deal with the United States.

He said the Greens supported greater protection for iconic sites but Dr Cullen's statement was a smokescreen for the real aim of lifting restrictions on overseas investors "gobbling up" New Zealand companies by removing them from consideration by the commission.

NZ First leader Winston Peters said the review was meaningless and would do nothing to stop land speculation by foreigners.

The Government had allowed overseas buyers to create a "huge land speculation industry".

"The land speculation means that prices have soared and fewer and fewer New Zealanders will ever be in a position to own or even enjoy their rightful heritage."