Editorial: Sensible move
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
Vice-president Andrew Hoggard says the new government policy broadly aligns with that of the Feds.
From December 15 not only will the owners of very large farms proposed for sale to overseas buyers require permission from the Overseas Investment Office (OIO), but any land larger than 5ha will now come under this office’s jurisdiction.
The new directive will not apply to forestry land.
Associate Finance Minister David Parker says the existing directive is too loose. Parker says too often investors buy a NZ farm then use existing systems, technology and management practices which don’t substantially add anything new or create additional value in our economy.
“We want to make it clear that it is a privilege to own or control NZ’s sensitive assets, and this privilege must be earned,” he says.
Hoggard says while the notion of ‘benefits to New Zealand’ in the old policy seemed to be right, in practice it didn’t turn out that way in the decisions of the OIO.
“You’d look at a decision and say ‘really? they view that as a benefit? Somehow a NZ purchaser wouldn’t have done that anyway.”
Hoggard says the new directive will give the OIO a clear message to step up a notch or two in how it assesses the net benefit to NZ.
He says Feds’ concerns, and those of the public, centre on the big trusts which just come to NZ and buy farms but do not contribute to local communities or NZ agriculture in any way.
A big concern is when these people start buying processing facilities, he says. “People are nervous about that.”
But Hoggard hopes the new rules will not prevent people who genuinely come here to farm and to invest in local communities. He gives as examples two prominent members of Federated Farmers -- Anders Crofoot and Willy Leferink -- who he says contributed much; and James Cameron and Julian Robinson – both wealthy individuals – invested in their local communities and brought new benefits to NZ.
“These people have been great for NZ and I would hate to see some blanket guideline that would cut people like that out of the equation.”
Hoggard says farmers and others will watch with interest to see if the new directive is applied fairly.
