Crafar bombshell rocks Key Government

Wed, 15 Feb 2012 3:51p.m.

The Crafar farms could yet stay in new Zealand hands

Opinion by Patrick Gower

Justice Forrie Miller has just dropped a bomb with fallout bigger than 7892 hectares of the Crafar farms.

It has really rocked the Beehive and sent serious shockwaves all the way to China.

It’s hard not to see this as anything but a slap in the face for the OIO and by extension the Key Government.

It is a continuation of a rocky start to the year.

Selling the Crafar farms to the Chinese was one of the most sensitive decisions the John Key Government has made and Justice Miller has simply said: "you got it wrong".

He has swept aside the Overseas Investment Office's nine months of consideration, and the sign off of Ministers Jonathan Coleman and Maurice Williamson.

When nobody ever thought Sir Michael Fay's legal challenge had a chance, Justice Miller has let off a beauty.

John Key has just said the Overseas Investment Office will have to go back to the drawing board, reconsider the decision - and under the new interpretation of the law could come back with a totally new decision against - yes against - the Chinese corporation Shanghai Pengxin.

Key and company bit the bullet and thought the deal had gone through.

Now it’s back to square one - but the heat around this has been turned up and the new decision will now be made amid a political firestorm about foreign land sales.

The Crafar farms could yet stay in New Zealand hands.

Indeed Key has gone even further and said other farm sales could be overturned if challenged.

Justice Miller's ruling says the OIO got it totally wrong - in his words, "the error was not a mere technicality".

In a nutshell, he says the economic benefits of the Chinese bid were overstated - and any solvent purchaser could have improved the Crafar farms.

Justice Miller effectively sets a new rule here to my mind.

If there is a foreign buyer and a rival New Zealand buyer bidding less, then as long as the Kiwi buyer can bring the same economic benefits - they win.

Now that could shut out a whole lot of foreign investment.

We've all heard John Key say ad nauseum that his Ministers acted within the law - well, Justice Miller says they and the department got the law wrong.

We've all heard ad nauseum the Government saying the economic benefits of the Pengxin bid were one of the main reasons for the deal - well, Justice Miller says that was cooked up.

But why is Key indicating there will be no appeal?

If they were so sure of the OIO and the Ministers why not back themselves against Justice Miller?

If there haven't been already, there will be top-level talks between the New Zealand and Chinese government, with the Chinese end of the phone line saying "please explain?"

The political questions will now concentrate on whether the Government had a one-track mind on selling to the Chinese and why Coleman and Williamson were just "rubber-stamping".

But one last mischievous thought - if the Crafar deal is as unpopular as everyone says it is, then has Justice Miller given John Key an escape route?

If the new OIO decision goes the other way, and the Crafar farms stay in New Zealand hands Key avoids the unpopular sale.

And Key will have done nothing but followed the law as he has done all along

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Comments

29/02/2012 4:58:21 a.m.

walter wrote:

High time a law was passed which protects our land and our people. There should be NO foreign ownership of land, full stop. How many other countries allow this? China has its own builtin problem, they are not all that trustworthy e.g.melamine in the milk powder. Prime Ministwer, all that glitters is not gold.

26/02/2012 12:05:04 p.m.

vicki wrote:

Great article Patrick! If I went to another country such as China with my millions or billions of dollars, would I be able to buy a big farm there if I wanted? No!

24/02/2012 11:46:11 p.m.

Deane wrote:

I think the row over the sale of the farms is hypocriticle. Richwright and co sold of our assets to overseas buyers. They are venture capitalist and are pissed off because the Chinese got what he wanted.

The reality is Farmers support National, they would vote National even if a mokey stood for PM.

Farmers are happy, and have been happy with the rest of us having to put up with shyte from National like selling of our power companies etc.
But when the same policies affect the good old kiwi farmer, that they support bits them on the bum, it becomes a big deal.

I say, if its good anough for us, than its good anough for them. If the chinese want our farms, and can pay them. Than what the heck, sell them. Its called capitalism.

21/02/2012 12:11:25 a.m.

Stace wrote:

As a maori/pakeha and National follower myself, i believe Mr Key Should never sell our land but should only lease the land and at a very high price for a decent amount of years! New Zealand is worth more than any investors price. I'm walking through Wellington City and see all these Maori named shops, just to see a foreigner behind the counter!! Thats rat shiit, I'd want to see a Maori or pakeha person so I can ask them more of our culture and history of nz and would even pay to make something. It was even worse when me and my partner were in Auckland and most of the outlets, even Souvineer shops we walked past had foreigners behind the counters! Wtf? They already run most of the jobs, their products they sell to be honest are shiit quality, and the products do look like they've been rushed, or the person making it was stressed out? No wonder why they're killing themselves. They probably just want our good meat, milk, leather and fur from the animals to make their crappy stuff better but why stress them even more when we have people here who could do the same and this time the new zealanders get the credit. I think I've seen enough of them, why not concentrate on those here that really need a job? The more jobs you give to new zealanders, the more tax you would receive? I get taxed $700 month, so i expext to see more done with it and I'm only 23. what if we, as tax payers get to choose a suitable cause for where part of our taxes go, and you let us as the public know what your building and we contribute. Cut out the counsels or join them with government, they are costing us but have never done much for us. We need fresh ideas to bring in money.. Build huge attractions! Start on one of those farm! Build a water world, a movie world or a paua farm etc!! Get foreigners coming to us, not us going to them!!

20/02/2012 2:06:10 p.m.

clare wrote:

There are Isreali and Swiss nationals in both a private and possibly a corporate capacity who own land in NZ and like China there is no reciprocation. As 10% of our arable land is in foriegn ownership already, a good deal of it American, which does allow foriegn ownership,then we could say this horse has already bolted. It is the prospect of selling to China,who presently owns relatively little here,that has drawn our attention to the fact that the horse is leaving the stable and it is timely to define the playing field on which future sales,if any,will take place.This is of course to do with being able to feed ourselves now and in future.How to do that as a nation with a responsible democracy, commited to being a responsible member of a global economy that uses financial and market models that have been historically proven largely inadequate at delivering these objectives globally.

18/02/2012 10:18:46 p.m.

bOb wrote:

Whats the situation in regard to China? can we buy up their farms and own them 100% or is this a one way street of they can do it but we can't do it to the same degree?. Purely interested to see if the playing field is fair for all. As much as "we are being overly protective" id like to see how protective China is when this kind of thing happens on their own soil.

16/02/2012 12:28:09 a.m.

Matty wrote:

Come on people wake up... As much as I would love to see the farms in NZ hands, Sir Michael Faye is not NZ hands. Hes has screwed this country over multiple times for his own personal gain. Do you honestly believe he wouldn't do it again? If the Chinese offered him a sum he couldn't ignore down the line, he would sell it for sure. He is an international business man first...

15/02/2012 8:02:59 p.m.

Waata wrote:

Given that I can do a job for a $1 and not for $10 for the same results, the boss is happy. Given that I bid $10 to do a $1 job, the government is happy. Justice Miller has got it right, after all he's a judge and knows the law...Boooo to selling New Zealand assets. Come on New Zealand speak up or do something to stop the sale of our assets.

15/02/2012 7:07:47 p.m.

brian wrote:

Let's put this as simply as possible. NZ is for NZ'ers. If any foreign national wants to emigrate - and they meet our criteria - so be it. If - and only when - that FN obtains NZ citizenship, THEN AND ONLY THEN they can buy into our real estate. Any NZ'er try buying in Asia, Thailand no way, impossible. China difficult if not impossible, most - if not all others - most difficult or impossible. We should apply the same rules. End of story.

15/02/2012 5:50:40 p.m.

Mike wrote:

What we have here is a law was made in Parliment years ago, back when Labour was in power. Along comes Justice Forrie Miller and defines new law totaly at odds with the law enacted in parliment.

The problem with this is just because Forrie made an oppinion, doesn't stop their decesion being appealed, nor does it stop the law being more clearly written to stop justice crusades.

This seams to me to be a case of Forrie making their own oppinion into law - till its appealed or new law is put through parliment.

So according to Forrie, if an overseas buyer offeres say $200,000,000 and a NZ'r offers $1 then the $1 bid will win? This guy is insane and shouldn't be in Justice deciding our laws fate. Economic benefit is flexible so this will mean any sale in NZ where a kiwi offers $1, will now be enough to block the sale. Its not workable so it will be appealed or new law enacted to flush this legal oppinion of Justice Forrie Miller.

No doubt there will be people wanting to dance in the streets to celebrate such insanity. It wont change a thing. Also the other side of the coin is that if the chinese deal doesn't go through now, the NZ govt may be held up to pay the Chinese compensation - which Forrie Miller wont have considered in his economic benefit plan.