To express concern about an increasing degree of foreign ownership and control in New Zealand is often to invite accusations of xenophobia, economic illiteracy and hostility to the outside world. It is worthwhile, therefore, to rehearse the grounds for that concern, and to explore the various reasons why to allow an increasingly loud overseas voice in our affairs may not be in our best interests.

The most obvious manifestation of foreign influence is when New Zealand assets pass into foreign hands. The downsides of that change of ownership are easily identified and are largely to do with the loss of economic benefit. If a significant part of the New Zealand economy is bought by overseas interests, the most obvious consequence is that the economic benefits - the income stream, the capital appreciation, the technological know-how, and so on - flow offshore rather than remain in New Zealand.

There is no shortage of obvious examples. The purchase by overseas interests of forests or dairy farms or kiwifruit orchards means that the economic gains to be garnered from such assets accrue to the foreign owners rather than to New Zealand. The consequence of such developments and of the repatriation of profits to foreign owners across the exchanges is that we are a smaller and less wealthy economy than we would otherwise be, and are more likely to have difficulty in balancing our overseas payments - a factor that acts as an inhibitor, in turn, to future growth.

We might include, in this catalogue of disadvantage, assets which have a value other than a purely monetary value. Foreign companies that bottle our water for export to profitable markets overseas, for example, are using an asset to which we do not attach a market price, but we should not kid ourselves that we are losing nothing of value; in a world when clean water is increasingly scarce, to allow its consumption by overseas profit-seekers is short-sighted in the extreme.

Australian-Owned Banks

We might include in this analysis the fact that our major commercial banks are owned by Australian interests and that the multi-billion profits they derive from their New Zealand operations are repatriated each year across the Tasman. This example represents a further loss of national wealth and a further burden on our balance of payments, and shows, in addition, that the economic consequences of foreign ownership can go wider and further than losses of national wealth in purely dollar terms.

The price we pay for the Australian ownership of our banks includes, given the important role played by banks in our overall economic development, the fact that essential elements in the economic management of our own economy are in some senses beyond our control, since the significant decisions taken by our banks will reflect Australian interests rather our own. So, our own Government - however determined it may be to see that decisions taken by the banks on interest rates, mortgage policies, and monetary policy more generally, reflect New Zealand priorities - has to deal with important agencies whose primary loyalty is to their Australian owners.

The example provided by the Australian banks also illustrates a further point. It is not simply the foreign acquisition by purchase of New Zealand assets that can cause concern. While some of our Australian-owned banks obtained their foothold in the New Zealand market by virtue of purchasing New Zealand banks, others simply set themselves up in New Zealand from an Australian base and acquired a position of influence by virtue of the position and role they occupy in our economy.

Who can doubt that the recent tribulations suffered by the ANZ bank reflect its subservience to its Australian owners, to the extent that even the fact that the Chair of their New Zealand-based board is a former New Zealand Prime Minister did not protect them from malpractice; John Key's duty was owed to his Australian owners rather than to the New Zealand public interest.

There are other examples of foreign entities, by virtue of their significant involvement in our economy, being able to influence domestic policy to suit their own interests rather than ours. We need only recall the demand made by Warner Brothers some years back that the influence of trade unions in the film industry should be reduced, and the shameful readiness of the then National government to accede to that demand by changing our labour laws so that workers in the film industry became self-employed contractors rather than employees, to understand how vulnerable we can be to powerful overseas interests (see Mary Ellen O'Connor's update on the Hobbit Law, elsewhere in this issue. Ed.).

We enter even more problematic terrain when we consider the extent to which powerful trading partners can exert considerable influence over our domestic policies. The controversy over a potential role for the Chinese telecoms company, Huawei, in the roll-out of our 5G network is a prime example; we are subjected to pressure in differing directions from two sources - the USA and China - both of whom are quite prepared to lean on us, with implied threats of damage to our relations with them, if we do not comply.

We can amplify this analysis by looking at a further instance of potential loss if we allow foreign interests to become too powerful. No one doubts that one of the most dangerous challenges we face is the threat of environmental damage, in the myriad forms of climate change, the loss of scarce species, plastics in the ocean, declining water quality, and many others.

Corporate Profits Before Environment

Nor can we doubt that one of the most formidable obstacles to effective protection of our vulnerable environment is the primacy we accord to profit-seeking enterprises and commercial interests more generally. Time and again we are told that we must take, and live with, the risk of environmental damage, if the cost of negating the risk is that business, profits and jobs will suffer.

How much more significant does this consideration become if the commercial interests involved are foreign, rather than New Zealand-owned? How much more likely is it that environmental downsides will be discounted if the oil company seeking permits to drill in our coastal waters is answerable only to foreign shareholders rather than to the New Zealand public?

And how can we be confident that foreign enterprises will have the cultural sensitivity and awareness that will be required and appropriate in today's Aotearoa/New Zealand? Will they understand the value we place on the bicultural and multicultural dimensions of life in our country or on the social and workplace advances we have made, often ahead of the rest of the world?

The lesson that it is not just dollar values that we lose if we allow essential interests to pass into foreign hands is once again confirmed. Our ability to make our own decisions, to make the rules that matter if our interests are to be protected, is greatly weakened if those proposing courses of action that threaten those interests have little or no commitment to, and are not answerable to, the wider New Zealand public.

A country that is truly sovereign and that enjoys an effective and functioning democracy will inevitably want to keep a cautious eye on those who are based overseas but who nevertheless seek to play a significant role in our national life - a role that might have deleterious consequences not just for our economy as measured in dollar terms but also for our national identity, our social cohesion and our environment. The issue of foreign control is not, in other words, as straightforward as it might initially seem, but potentially reaches wider and further and with more complexity than is immediately apparent. Continuing vigilance is, and must be, the watchword.