Government Happy To Be Door Mat For Transnationals

But Tries To Quarantine Hot Issue Of Land Sales

- by Murray Horton

The sorry spectacle of the Prime Minister falling over himself to appease Warner Brothers to ensure that the giant American transnational corporation would condescend to continue to film “The Hobbit” in New Zealand was a perfect illustration of the global modus operandi of such corporations, aided and abetted by their local collaborators, and facilitated by craven and wilfully naïve politicians. How appropriate that a film about an imaginary feudal society should be made possible by such a textbook example of modern day corporate feudalism in action, complete with forelock tugging grovelling from the powers that be, mass hysteria from the media, and some Oscar-worthy prima donna behaviour by the knights of the shire, Sir Peter Jackson and Sir Richard Taylor. The American studio bosses must have been falling over themselves with laughter when they realised that all they had to do to get their own way was to threaten to take their bat and ball and go elsewhere (a standard threat from transnational corporations, sometimes enacted, but much more often used as a bargaining ploy to extract concessions. It has been a standard tactic for decades from the transnational owners of the Bluff aluminium smelter, to cite the most high profile example). So John Key made himself personally available when the Hollywood moguls flew into Wellington and proceeded to give them even more tens of millions of taxpayers’ dollars (isn’t it interesting how politicians and the media never wax indignant about these subsidies to Big Business or demand that something be done about these beneficiaries of such massive corporate welfare, surely the biggest bludgers in the country?). And just for good measure Key got the labour laws changed so that anyone working in the film industry is now classified as a self-employed contractor, not an employee, which makes things a lot easier for the film industry employer, who now has no responsibility for things such as tax, annual leave, sick leave, ACC levies, etc, etc. All of that becomes the responsibility of the worker. The hysteria and political overkill was in reaction to one Supreme Court case where a film industry worker had been ruled to be an employee, not a contractor. In fact, so sweeping was the scope of the political gutlessness that even kneejerk backers of National and the bosses felt uneasy enough to express doubts about it in editorials and columns.

Divide And Rule

There was something extremely ugly about the anti-union and anti-worker hysteria which was very rapidly whipped up, including heaping personal abuse and threats on Helen Kelly, the head of the Council of Trade Unions (always disparagingly referred to by the media as “union boss”) and high profile Actors’ Equity spokespeople such as TV star Robyn Malcolm. Particular venom was reserved for the Australian representative of the union which was invited by Actors’ Equity to help them with their industrial campaign for better conditions and security of employment – how ironic that foreign-owned media crusading on behalf of a gigantic American film company should attack an Australian union and its staff for practising international workers’ solidarity. It’s easy to see how fascism can get going –“your problems are all the fault of those immigrants/gypsies/Jews/Australian unions”. Sir Peter Jackson, especially, revealed a very unattractive side of his carefully cultivated avuncular personality (watching him on TV reminded me of his old mate Gollum, fixated about “my precious”). Whenever high achievers such as Jackson are criticised, the standard response from their media apologists is that “this is the tall poppy syndrome”. Bullshit. In this case Jackson’s behaviour was reprehensible and he showed clearly whose side he is on in the faceoff between “his” workers and the studio bosses.

Divide and conquer has always been a standard, and well proven, tactic of colonisers and this nasty little exercise in corporate colonisation proved no exception. So there were “we want to work” rallies by film workers stampeded into being frightened about their jobs. All par for the course – local collaborators and their stooges have played a vital, if ignoble, role throughout history. They were in the slave trade; Aotearoa would not have been colonised by the British if not for the help of “loyal Maori”. Once again, how appropriate that a film about an imaginary feudal society should feature the loyal serfs being mobilised to fight the rebellious ones and being misled by their knightly lords and masters (with the help of the Government and media) into seeing those nasty Australian-backed “union bosses” as being their enemy, rather than the huge American film company which demanded that their pay, conditions, job security and union protections be reduced or eradicated before withdrawing its threat to find cheaper and more servile labour elsewhere. Obviously Warner Brothers is now satisfied that the NZ film industry can offer suitably cheap and docile workers. The whole ”Hobbit” fiasco shows very clearly that this is a Government that will go to any lengths to grovel to the transnationals and trample on NZ workers and unions in the process (not to mention blithely giving those transnationals tens of millions of taxpayers’ dollars as unabashed corporate welfare).

Overseas Investment Act Not Further Liberalised

That, of course, is exactly how you would expect a Tory government to behave on the issue of foreign control. But what it has done (or, more precisely, not done) about land sales to foreigners shows just what a political hot potato that particular part of the issue has become. When Bill English, the Minister of Finance, announced yet another review of the Overseas Investment Act, in early 2009, he said that its recommendations would be made public by the middle of that year. In fact it took until the end of September 2010 for that to actually happen, a full 15 months late. When English announced that review National was all set for another gung ho liberalisation of the Act to make New Zealand even more “attractive to foreign investors”. After all that is what Labour did when it was in office and the result was the present 2005 Overseas Investment Act, which represented a considerable liberalisation from its predecessor. NZ now has the dubious distinction of having one of the most laissez faire foreign investment regimes in the world.

But this latest review, contrary to a regular drip feed of information from “inside sources”, recommended precisely no change to the Act. It introduced two new measures to the Act’s accompanying Overseas Investment Regulations and they both apply exclusively to investments in sensitive land: a new “economic interests” factor allowing Ministers to consider whether NZ’s economic interests are adequately safeguarded and promoted; and a new “mitigating” factor enabling Ministers to consider whether an overseas investment provides opportunities for NZ oversight or involvement e.g. by appointing NZ directors or establishing a head office in NZ. Some media commentators have labelled these as giving Ministers “veto powers” over foreign investment in large tracts of farmland (actually, for as long as there has been an Overseas Investment Act - since 1973 - Ministers have always had veto powers over all aspects of foreign investment. What’s been lacking is any political will or courage to actually use them. But let’s not spoil a good story).

What has changed since Bill English announced this review in early 2009? Obviously, the very large and growing larger public opposition to relentless foreign takeovers of prime agricultural land, and specifically the current Chinese bid by Natural Dairy for the North Island dairy farms empire of the hapless Allan Crafar (still awaiting the Overseas Investment Office’s decision at the time of writing; and the new Regulations are not retrospective, so they, quite deliberately, cannot be applied to the Crafar Farms case). There has always been public opposition to foreign takeovers of NZ rural land but what is different now is a qualitative change from rich foreign individuals wanting to buy picturesque hobby farms for themselves (think Shania Twain) to agribusiness transnationals wanting to buy great chunks of the dairy industry, which is the current engine of the NZ economy.

This has led to major unease among people who have been among National’s traditional backers and voters (which has taken organised form with the recent launch of the Save The Farms group) and there has been evidence of a major difference of opinion at the highest levels of the Government itself, with Maurice Williamson on the one side labelling opponents of foreign investment as “racists” and John Key on the other, saying, more than once, that he doesn’t want to see New Zealanders end up as tenants in our own country (he is spot on with that phrase, one which CAFCA has used for years. Perhaps Key is a secret admirer of ours? No leader of the last Labour government ever used language like that). It would seem that the Key faction has prevailed – not only is the Overseas Investment Act not being liberalised, it is not being changed at all, and a couple of essentially cosmetic measures have been tacked onto the Regulations to try and satisfy public opposition to farm sales to foreigners.

Throughout 2009/10 CAFCA had steadily built a campaign to oppose any further liberalisation of the Act. Then we waited and waited. So we were pleasantly surprised by English’s announcement (which was later revealed to have been against his own advice and that of Treasury, no surprises there). National’s reasons for doing so are very different from CAFCA’s (they’re driven by electoral expediency) but we’ll take a win, whatever the circumstances. We campaigned against any further liberalisation of the Overseas Investment Act and that is exactly what was achieved. We won (and have even removed the relevant page from our Website, as it is no longer necessary).

CAFCA has always said that whilst land sales to foreigners are important in themselves, they are only part of a much bigger picture, namely the wholesale economic recolonisation of all sectors of the NZ economy by transnational corporations. National wants to quarantine the land sales issue, because that is a political hot potato, while proceeding with business even more flagrantly than usual in the bigger picture of giving the country away to transnational corporations, in fact paying them to do so (as vividly demonstrated in “The Hobbit” fiasco). We congratulate the Government for not liberalising the Act any more than it already is but we call upon Key to take the bull by the horns and actually substantially tighten it up. There is plenty of scope to do so. Start by exercising the veto powers that Ministers already have (and always have had). But we won’t hold our breath.

Labour Says It Promises To Do Something – Next Time

Just how much foreign control has become an election issue was demonstrated in October 2010 when Phil Goff, the Leader of the Opposition, used his speech to the Labour Party Conference to announce a raft of changes to Labour policies on a number of political and economic issues, including foreign control. Analysts described it as Labour’s renunciation of Rogernomics and as giving voters at the 2011 election a real point of difference with National. CAFCA congratulates Labour for seeing the light and announcing a policy that recognises the glaringly obvious fact that unrestricted foreign “investment” is a disaster and for starting to take some painfully modest steps towards rectifying that. I won’t go into the details of what Labour proposes (although they do look good on paper, as far as they go), because they only become relevant if Labour wins the election and then we will see how much the reality of being back in power accords with election promises. CAFCA would never be so cynical as to suggest that this is a classic ploy by an Opposition party sensing a vote winner and desperately trying to curry favour with public opinion, which is way ahead of the politicians on this issue.

The obvious question is – why didn't Labour do something about foreign investment when it was in power for nine whole years? Oh, I forgot, they did – they made that foreign takeover easier. For example, this was the Government (full of the same people who now lead the Party), that trumpeted Shania Twain's purchases of South Island high country stations as signalling a “smarter” kind of rural land sales to foreigners. Helen Clark made sure that she got into the photo opportunity with the singing superstar when a walking track through her hobby farm was opened. If Labour's actions on land sales to foreigners were feeble, its policies on foreign investment overall were downright criminal. Literally days before the 1999 election which brought it to power the threshold above which official permission was required for foreign takeovers of NZ companies was increased from $10 million to $50 million. As soon as Labour was back in Government CAFCA wrote to every Labour MP urging that the threshold be returned to the previous limit. Not one Minister or Labour MP had the courtesy to reply to us. And in 2005 Labour further liberalised the Overseas Investment Act – one detail was that threshold was increased from $50m to $100m (and Michael Cullen wanted it to be raised to $250m; only public opposition, including from within his own caucus, prevented that).

Both Parties Still Wedded To “Free” Trade

Phil Goff's policy announcement says nothing about Labour's continuing addiction to “free” trade, which goes hand in glove with unrestricted foreign investment. Indeed NZ's Free Trade Agreements usually include an embedded investment agreement. Both Helen Clark and Goff declared the 2008 FTA with China to be the pinnacle of their trade policy. And, guess what, the investment agreement in that with regards to Chinese companies is the reason why Natural Dairy can bid for the Crafar Farms, the very same proposal which is the trigger for the current public upsurge of opposition to foreigners buying NZ land, specifically dairy farms.

Nine years of actions in Government speak louder than a few meek words in Opposition. Is Phil Goff now going to admit that he and Labour were wrong to sign that FTA and its accompanying investment agreement with China? We challenge him to declare Labour's opposition to the Trans-Pacific Partnership (TPP) currently being negotiated with a number of countries, and which he, when Labour was in power, proclaimed to be the means to effect an FTA with the US, which is held up by both National and Labour as being the Holy Grail of trade agreements. Once that is signed US agribusiness transnational corporations will vacuum up NZ dairy farms with impunity. Will Goff then be wringing his hands? Come out and admit you were wrong, Phil, and turn Labour's back on the road to ruin and recolonisation represented by unrestricted foreign investment and “free” trade. You will pick up a whole lot more votes as a result.

“Free” trade is one subject on which National and Labour are in full agreement, they are both committed to the TPP, which has been seized upon by the US as “its” free trade agreement (actually it has muscled in on an existing agreement, namely the P[acific] 4 – NZ, Chile, Singapore, Brunei – the expansion of which will bring the US into the new TPP). America’s reasons for wanting to join have nothing to do with trade, much more to do with breaking open more markets to US transnational corporations (the investment agreements embedded in “trade” agreements such as the TPP are the real dangers) and everything to do with US geopolitical priorities to build a power bloc to counter the growth of China as the regional superpower with global ambitions (it’s called imperialism and is a major cause of wars).

CAFCA is heavily involved with the New Zealand Not For Sale Campaign (Box 2258, Christchurch 8140, can learn about the TPP and the Campaign at definitive book about the TPP is Jane Kelsey’s “No Ordinary Deal”, reviewed in this issue by Jeremy Agar).

National Mood Is Changing

The fact of the matter is that both major parties are inextricably wedded to the neo-liberal mantra of foreign “investment” and “free” trade and have been since the 1980s. Both are preoccupied with trying to separate the issue of land sales to foreigners, which has really got New Zealanders of all political persuasions fired up, from the bigger issue of foreign control and transnational corporate domination of the NZ economy, to which both parties are still committed. Having said that, I am more optimistic than for many years that our side of the argument might actually prevail, at least in some of the battles if not the war itself. The changes that Labour has announced, modest as they are, nonetheless are a step in the right direction. Even the fact that Labour has recognised that aspects of foreign control are seen by the New Zealand people as part of the problem and not part of the solution is a major sea change for that party. As for National, it is well along the path of its tried and true practices of bashing unions, workers and beneficiaries. Capitalism is still very much under the weather of the global financial crisis, with workers and the middle class being made to pay for the crimes of the thieves and banksters who got us into this mess.

That means that National is running out of bright ideas and overseas models to bedazzle us with, and persuade us that if we just do this and that, capitalism will deliver us to the Promised Land (or Australia, which is apparently the next best thing). No more talk is heard of the Irish model, the Celtic Tiger, which was lauded by NZ ideologues and their media mouthpieces just a few years ago. Total surrender to transnational corporations, notional tax rates for big business, and a free hand for banks and the financial wizards has delivered what, exactly, for that country? National bankruptcy, social ruin and political suicide for the politicians who caused it. And the dreadful tragedy at the Pike River coal mine which killed 29 workers in November 2010 should have silenced the gung ho National Ministers who, earlier that year, were trumpeting mining in national parks and the conservation estate as the key to unlocking the treasure chest. Pike River was held up as the “intelligent, environmentally sensitive” example of just how it could be done, by underground mining on conservation land. That fanciful notion has gone up in the explosions and fires which have ravaged that mine. So, people are looking for fresh answers at this election, not the same old snake oil which has so badly failed us for the past several decades and one obvious place to start is with a Government that actually puts the national interest and the public interest first. That really would be a pleasant surprise but we’re living in unusual times, one in which the national mood is changing. CAFCA will do our bit to ensure that it leads to real changes which benefit the common good, as opposed to private profit, corporate feudalism and economic recolonisation.

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2008.


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