Two Very Different Houses

Economic Literacy in Oz, Ignorance in NZ

New Zealand appears to have a strong streak of xenophobia.  It also can be characterised as excelling in economic and commercial ignorance.  These things tend to come out especially during election campaigns, but they are always there, simmering away just beneath the surface, waiting to break out like a bad case of acne. 

One traditional cause célébré is residential housing and whether New Zealanders can afford it.  Prices are rocketing up in some locations (Auckland, Christchurch) bringing forth pronouncements of doom. 

But attitudes across the ditch appear to be very different.  House prices have ratcheted up in that country as well, particularly in Sydney and Melbourne.  And, more to the point, the  presence of strong Chinese demand is having a significant impact.  In New Zealand, a similar phenomenon has produced xenophobic reactions against Chinese immigration and house-buying.  Not so in Oz–at least not in the Sydney Morning Herald, which is hardly a denizen of right wing, pro-business, free market economics.

House hunters may complain, but the “phenomenal” influx of Chinese money into the local residential property market may be the best thing that happened to the local economy as it struggles to make its difficult transition from an unprecedented mining boom.

The demand from foreign investors for Aussie bricks and mortar is set to intensify for at least three years, driving a boom in apartment construction activity and boosting the bottom lines of listed companies such as Lend Lease, Mirvac and Goodman Group, according to exhaustive new research by broking group CLSA.  And while there have been plenty of warnings about foreign investors pushing property prices beyond the reach of a generation of local prospective homeowners, Chinese investment may be the catalyst for growth in a non-mining corner of the economy – building and construction – that traditionally is a strong generator of employment. . . .

China is already the number one source of source of foreign money in the local real estate market, and anecdotal evidence suggests that that position has only strengthened this year. Sydney and Melbourne have overwhelmingly been the destinations of choice. . . .

Existing regulation, administered via the Foreign Investment Review Board, restricts non-residents to new properties. There is anecdotal evidence that these rules are circumvented to illegally allow foreign capital into established properties, but the extent of that is hard to estimate, says CLSA senior analyst Andrew Johnston.  But Johnston concedes that “there will be some Australian residents that are homebuyers that get displaced from buying a new apartment due to price, such that second-hand apartments become relatively more attractive”.  While the news is mixed for some home buyers, it’s great news for the bottom lines of the country’s biggest listed property developers – and potentially their shareholders.

Around about now, in New Zealand, howls of outrage would be heard condemning monied interests profiting from the discontent of the less advantaged.  And at the same time, out of the other side of the mouth, shrill calls will be made about the need for New Zealanders to save an invest more–in listed companies–to prepare for their older age years. 

 

Go figure.  Australia at this point is far more advanced and discerning.  New Zealand remains locked in an ancient iron mask of socialist egalitarianism.  It’s what happens when the entire statist education system is bent toward reinforcing the idea that everybody and everything “owe me, big time.” 

Beware the Yellow Peril

Baser Instincts

In New Zealand we have had our share of muck racking, venal, xenophobic politicians who pander to the worst instincts of the bitter and twisted.  Immigration seems to hit all the right buttons for these closet racists and the populist politicians who exploit them.

Racism is a strong word–sadly overdone in many quarters.  It is not an epithet to be used lightly.  We struggle to avoid its use here.  It’s hard to come to any other conclusion, but we will try.  David Cunliffe, erstwhile leader of the motley crowd of divisives, temporarily coalesced under the Labour party banner, has come out opposing the sale of a large North Island high country farm to a Chinese company.  This is normally the political territory of the one or two populist politicians who can find electoral traction few other ways.  Anti-Chinese sentiment–which is racist insofar as it appears to apply to no other immigrant ethnic group or nation–is the final bolt hole of a desperate, cynical politician or one who is a genuine racist.  Now it has become the resort of the Labour leader. 

We prefer to believe the evidence points to a cynical, desperate politician, rather than a genuine racist.  Surely Cunliffe cannot be that degenerate.  Its his desperation that is leading him to play the race card, and the xenophobe card, and any other card, for that matter.

It turns out that China, the Chinese, and New Zealand have a long history.
  There is evidence that New Zealand was visited by Chinese explorers in 1421, long before Abel Tasman and James Cook.  Chinese gold miners flocked to Otago during the great gold rush in that province in the 1850’s and 60’s.  Few made it rich; many others settled here and have become valued citizens.  More recently, Chinese investment in New Zealand has been making significant contributions to our well-being and economic development.  For example, Haier bought the iconic Fisher and Paykel appliance company and have helped transform it into a greater commercial power than it was.  F&P, as it is widely known, has expanded some of its business operations  in this country under Chinese stewardship, taking on more staff.

Another recent example has been provided by a Chinese company buying up one of our largest waste disposal companies, Waste Management.  Ironically, Waste Management was a premiere listed New Zealand company bought out firstly by an Australian conglomerate, Trans Pacific Industries.  Recently, the Australian group sought to downsize due to overcommitments.  It sold to a Chinese company, Beijing Capital.  So one of our largest waste management companies is now owned by a Chinese company.    Not a peep of concern or scintilla of objection from one David Cunliffe.

But the Lochinvar Station–a large North Island high country farm–is apparently in a completely different category.  Cunliffe has stupidly come out to say that if elected to govern he would squash the sale by fiat.  We cannot have such iconic New Zealand assets transferring into foreign ownership.  Maybe land is in a different category from highly successful New Zealand businesses, such as Waste Management, or iconic New Zealand companies, such as F&P.  Well, maybe not.

When Canadian film director, James Cameron bought a significant farm in the Wairarapa, David Cunliffe and his raggle taggle Labour Party said nary a word.  When Cameron acted like a rapacious capitalist and bought more farms in the area, Cunliffe’s silence was deafening.  And then there is  the “small matter” of Shania Twain–who, of course, along with James Cameron, just happens to be Caucasian, and, along with Cameron, one of the glitterati–buys up a large South Island high country farm, it’s nothing at all.  Not a peep from the principled Mr Cunliffe, except, no doubt a behind-the-scenes request for a photo-op.

But a Chinese company buying up New Zealand farmland–that’s got to be stopped.  It’s wrong.  It’s unjust.  It’s evil.  It’s going to be declared illegal.  

What on earth are we to make of Cunliffe deploying this populist xenophobic bovine scatology?  Either the man is a racist at heart with an abiding dislike of the “yellow-peril” or he is an unprincipled, desperate, base politician.  We believe the latter to be the case–otherwise Cunliffe would have protested long and hard against F&P and Waste Management being sold to the dreaded Chinese.  No, he is just manipulating the baser instincts of some of our residual xenophobes in a venal attempt to get more votes.

Any wonder why politicians are held in such low regard?  Helen Clark at her worst was never so base.  Cunliffe is a sad poster-boy of the degeneracy the Labour Party now represents and seeks to exploit.