New restrictions on foreign buyers of New Zealand farm land will help prevent a backlash like Trump and Brexit, Associate Minister of Finance David Parker said on Wednesday.
The Government has raised the bar for overseas investments in rural land.
Overseas buyers of land over 5 hectares will have to "provide genuine benefits" to New Zealand.
Dr Parker said the new directive issued to the Overseas Investment Office will help prevent the kind of backlash to the "excesses of globalised capital" that resulted in people voting for insular trade - as symbolised by President Donald Trump.
"We want to avoid the backlash that has occurred with the election of President Trump, Brexit and some of the fringe parties in Europe," Dr Parker said.
"In order to maintain that outward-looking view, we think that there are some assets in New Zealand that shouldn't be traded on an international market but should be priced according to the means of New Zealanders who live here and pay taxes."
As to whether the price of farms is likely to drop, Dr Parker said he doesn't expect a significant change as most farms are purchased by New Zealanders.
"I think that the middle-class in New Zealand is uncomfortable that their prospects in life are being to a certain extent hampered by the one-percenters from overseas who can outbid them for assets that they would overwise be the buyer of," Dr Parker said.
There will be one carve-out in the new order: forestry.
The Government says that's because overseas investment in forestry will "support regional communities."
Minister of Forestry Shane Jones says, "Forestry, and the processing of forest products, are significant sources of employment in our regions, and we want to build on that to get more people into a sustainable workforce."
The new directive will come into force from December 2017.
Newshub.
