17 Aug 2015

Foreign investors add value - Key

10:42 pm on 17 August 2015

Prime Minister John Key has responded to a report showing 5 percent of the country's land is in owned offshore, saying he is confident foreign investors are adding value to the economy.

John Key

Photo: RNZ / Alexander Robertson

The report by the advisory firm KPMG, shows that nearly 600,000 hectares (5 percent) of New Zealand's agricultural and forestry land has been sold to foreign investors over the past five years.

Opposition parties say New Zealanders are steadily losing ownership of their land, forests and productive assets.

But Mr Key said overseas buyers had to prove they were adding value to get approval from the Overseas Investment Office.

"For the most part I think they honour their conditions. If they don't then there are issues - I mean there's a five-year period, I think - it varies a little bit.

"From memory there is about a five-year period where checks are done and where they've got to report, actually, on whether they've undertaken the improvements they said they would."

He was not surprised Canada was a big investor.

"I think it will shatter some of the thoughts that somehow it's China that's investing and nobody else is interested. It's simply not true."

The KPMG survey was not a "complete picture" of raw data, he said.

"It measures what goes through, over and above, a certain threshold so it doesn't measure absolutely everything. There's a lot of land that is sold domestically.

"It doesn't measure when a foreign owner owns land and then sells it back to a New Zealander," he said.

He was not overly concerned by the survey's results, he said.

"I don't think it's alarming. I think what you are seeing at the moment is some purchases going offshore but not an uncontrollable amount."