The New Zealand government is looking at introducing a new bill into Parliament which would prevent foreign companies from buying up rural land, and is due to controversy over Chinese companies trying to purchase lucrative dairy farms on the North Island.
The Chinese company, Shanghai Pengxin had put in a bid to purchase 16 dairy farms in Crafar on the North Island, and this bid had already received approval from the government before being overturned in the High Court. The bid was overturned as the High Court felt any potential benefits must be measured against an alternative buyer.
Labour leader David Shearer wants the law to be changed so governments reject any foreign bids to purchase New Zealand farms unless the bid would result in more exports, and more new jobs being formed than from a New Zealand bid.
Such a law would mean most bids to buy New Zealand land would be turned down, and only those implementing new technologies or introducing new products would be allowed. Although the government already has the power to turn down sales of farms to overseas buyers the Labour leader doesn't think it is being properly implemented, and that most sales result in profits flowing out of the country.
Selling farms to overseas buyers is also likely to raise the price out of reach of native farmers which would be very detrimental to the country.
At the moment any decision by the Overseas Investment Office to sell property to foreigners has to be approved by two government ministers who are able to decide which factors are relevant to the sale. If the new bill is made law it will be much stricter.
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