News Ticker

Compensation and the national interest

It is really hard for me to see the compelling national interest that would require the government to step in and block the sale of a farm to a foreign company. It is even harder for me to see why Cabinet would overrule the Overseas Investment Office on it, other than populist politics.

And so I have a proposal. Whenever Cabinet decides that the OIO got it wrong and moves to block a sale to a foreign company, Cabinet should have to compensate the seller for the loss.

The NBR reports that the offer price was $88 million and that the farm has a CV of $70 million. If there were a domestic offer at CV, the government should have to pay the station’s owners the $18 million difference.

I’m happier to believe Cabinet assertions of a compelling national interest when they’re willing to incur an on-budget expense rather than impose losses on somebody else.

This kind of nationalist populism trumping the OIO is unbecoming of a National government.

About Eric Crampton (88 Articles)
I'm Head of Research with the New Zealand Initiative.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: