NZ buyers – interesting article.

Everyone misses the good bit, because bad news and shiznit-stirring sells more papers, sheesh….
here it is:

“But the New Zealand government has made it easier for foreigners wanting to invest big bucks in Kiwi companies by doubling the threshold at which transactions have to be scrutinised.”

cheers-
Mini

joy to the world

RE: “But the New Zealand government has made it easier for foreigners wanting to invest big bucks in Kiwi companies by doubling the threshold at which transactions have to be scrutinised.”

Why invest money in a New Zealand company when the primary incentive is the government will not “scrutinise” the transaction unless it is $100MM or more.

From the perspective of a foreign investor, this isn’t going to put more money in my pocket – there is no incentive, it just means less paperwork.

— Michael

Westan – in response to your question..

Foreign investment plays a very important role in sustaining New Zealand’s property market – commerical and residential – and the economy.

If it were not for this foreign investment, it is very unlikely the property market would be where it is today – which has indirectly contributed to increased average wage/salary, lower unemployment, greater wealth in the community, and a higher standard of living.

If the government puts barriers in place which prevent or restrict foreigners from acquiring property in desireable locations, it gives a wider perception that New Zealand is becoming too restrictive – which in turn leads to investors in all market sectors looking elsewhere. Including myself.

Recent government policy and indirection has created a “what’s next” mindset in the investment community. Investment is all about risk management and getting out at the right time. [a sucessful investor is not one who knows when to buy, rather one who knows when to sell]

As a consequence, the property market can suffer as will the economy. This in turn can adversely affect every New Zealander.

This is a scenario which transpires over time. But the Labour government discounting foreign investment and overlooking a business community that is ripe for clear and defined policy, i.e. tax incentives, does not instill much confidence from a foreign investors perspective. Adding further restrictions compounds this nervous energy.

When the Australian market rebounds, the New Zealand economy and property markets need to be prepared – and not so restrictive. The Labour government needs to look beyond Wellington [and New Zealand] and consider the effects such decisions have had on other economies. They need to be less ignorant – or is it arrogant.

I tried to convince Michael Cullen several years ago that New Zealand needed to take a similar stance to Ireland – from a tax policy perspective. The feedback was extremely closed minded, it was as if Cullen had never left the shores of his own country.

I recently met with the new Reserve Bank Governor [Bollard], who I felt was nothing more than a “yes man” to Michael Cullen. I would have more faith in my PA overseeing the Reserve Bank.

They are both of the mentality that when New Zealand starts to prosper, it is time to put the breaks on. Why? because a high percentage of the Labour party’s support derives from those who live on tax dollars, not those who pay taxes.

It will be interesting to see if Don Brash takes the helm at the next election. I personally feel he is the best person for the job. Otherwise, myself and others will maintain a high level of caution in terms of our dealings in New Zealand, and will always have an exit strategy ready to implement.

— Michael