Question of compensation for blocked asset sales
BusinessNZ says compensation needed if restrictions are put on the sale of assets to overseas interests.
BusinessNZ says compensation needed if restrictions are put on the sale of assets to overseas interests.
BusinessNZ is suggesting taxpayers need to consider what sort of compensation they are prepared to pay to disaffected property owners, if restrictions are put on the sale of assets to overseas interests.
"While New Zealand has a relatively open policy in respect to foreign direct investment, there has been much debate recently over the possible sale of large tracts of dairy farms to overseas interests," Business NZ said in its planning forecast for the September quarter.
"If New Zealanders wish to restrict land sales or the ability of foreign owners to invest in New Zealand then they clearly need to be aware of the consequences of doing so.
"They need to know of the potential implications for economic growth and ultimately for the standard of living to which most aspire."
Key contributions from foreign investment included the transfer of capital, employment growth, technology transfer and innovation, enhanced competition and consumer choice, and more innovative management practices, the forecast said.
Studies suggested around a third of the New Zealand workforce was likely to be in jobs created as a direct result of foreign direct investment.
"In other words, the New Zealand economy has been built on the back of foreign investment," the forecast said.
"Restricting foreign ownership might be a feel good factor for some New Zealanders but would come at considerable cost."
Among "crucial" issues that needed to be taken into account in any restrictions on the sale of assets were whether they would be of net benefit to this country, and the implication for future investment in New Zealand.
Other crucial issues were the impact on property rights and the message sent to businesses generally, and what compensation regime taxpayers were prepared to pay to disaffected property owners, the forecast said.
The forecast also questioned the performance of the student loan scheme, saying the scheme was estimated to cost around $800 million a year.
That meant that for every dollar the government -- taxpayers -- put into student loans, it could expect to get back around 52c.
"Not a particularly healthy return," the forecast said.
"While no doubt such expenditures may also have significant benefits, these need to be weighed against the extent to which there is genuine market failure (and if so, what is the most appropriate response) or whether such money would be better left in taxpayers' hands to spend and invest as they see fit. Or in further reducing debt levels."
The forecast also includes the BusinessNZ economic conditions index -- a measure of major economic indicators -- which is at 10, up 4 from the previous quarter and up 1 on a year ago.