February 9, 2025 • 10 mins
Kerre Woodham speaks to NZ Herald Business Editor at Large, Liam Dann, to explain how the changes to foreign investor visas will grow our economy.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be our economics editor at large, no business editor
at large. But we're really we're talking you.
Speaker 1 (00:16):
Can Yeah, that's right, Hi, carry goodbye.
Speaker 2 (00:20):
This is our first chat for the for the year.
Liam dan Joins is, Yeah, now, this this deal. Probably
everybody else who is listening totally understands the conversation that's
going on. But I want to know how five million
dollars is going to grow the economy, and how it's
(00:41):
directed to grow the economy and why. I mean, I
can totally understand going to get foreign investors for roads,
for infrastructure, for the big ticket items. How are we
not just going to get nail bars and Jim's mowing.
Speaker 1 (00:54):
Well, they're trying to direct it into high risk investing.
So this is if you think about it, it is
the investments that the banks are very shy of, you know,
so that the most obvious stuff is, you know, we
all want it to happen as high tech you know,
research and development, so sort of start a tech startups,
(01:15):
you know, the next Silicon valley. Stuff that's harder to
get capital for, you know.
Speaker 2 (01:21):
Is it even from our banks? And even with the
track record of a lot of our startups.
Speaker 1 (01:24):
Yeah, we we have some good systems in place to
get you know, high net worth individuals investing in that stuff.
So there is private equity in this country. There is
venture capital, but but not vast amounts and you know
by by international standards and so some more capital that
there would be good. I mean, even even things like agriculture.
The banks are pretty shy about things that don't have
(01:47):
a proven track record. So we would like to see
New Zealand diversify its agriculture and horticulture so we're not
reliant on them, you know, all on dairy and meat
for example.
Speaker 2 (01:59):
You know more, they're even shy of investing in your traditional.
Speaker 1 (02:03):
Yeah, community back from.
Speaker 2 (02:05):
Would this be a replacement, because I've been wondering where
the hell the money is going to come from from
rural for the rural station.
Speaker 1 (02:12):
If you were, well, if you're wanting to do something
a bit different in a rural setting and in the
banks weren't interested, then you've got to look to second
tier lenders or to you know, private equity effectively, and
that's where I guess they're saying, there's a limited pool
we could get more, you know, lots and lots of
five millions. We could add it up to some billions,
because the theory is that there are people here, people
(02:32):
around the world with a lot of money looking looking
for things to invest in that you know, and obviously
mining is the other big one. I'm sure Shane Jones
would you know, love to see a digging lithium and
germanium and all these other things out of the out
of hopefully some places that aren't too beautiful. But nevertheless
that that that's something that requires capital. And again if
(02:55):
you're prospecting and things. You know, there's big mining companies,
but then there's also smaller operations and if they were
going to be local operations, they would probably need some
foreign capital. And so if you have the right sort
of interested investor who's really passionate about something, so they
have to be really pretty rich. Because we're talking about
five million dollars for the high risk stuff, they're allowed
(03:17):
ten million if it's ten million minimum. If you're going
to do a bit more of a balanced thing. So
if you wanted some forestry and some commercial property and
some things that are a bit more traditional, you'd have
to invest ten million.
Speaker 2 (03:30):
And have something that's not growing the economy though.
Speaker 1 (03:33):
No, I guess. Look, I guess you can make a
case that just more money coming into the country helps
with overall wealth. But yeah, I mean it still would
be stuff that I guess that would say that the
banks aren't necessarily.
Speaker 2 (03:47):
For well, that makes sense. So it's basically like having
the foreign investors are just like another venture capital company,
and we have them in New Zealand. You're quite right.
I've done some work with them before, but not enough
of them.
Speaker 1 (04:02):
Not enough. But so the trick will be lining all
up and also making sure that we've got enough interesting
stuff to invest. And I've definitely had criticisms before that
you know that there isn't necessarily as big a capital
problem as people think. We've got an nz X here
that doesn't have messes of new listings coming on every year,
but when they do come on, they can raise some
(04:23):
money on the inst x and that's not happening that much.
So you've got you've got to be sure that you've
got I suppose it's chicken an egg and the government's
trying to get this rolling, but you've got to have
the interesting stuff to to track these investors. They've got
to be confident that we're going to make money. We
do have a good track record with a bunch of
tech companies and and you know, and horticulture, wine and
(04:45):
all that sort of stuff. So I can see why
we will be appealing. And I can see, well.
Speaker 2 (04:50):
We were once, I mean and not that long ago.
If we're looking at two point two billion dollars coming
and there was obviously something there that foreign investors found appealing.
Speaker 1 (04:59):
Well, look the other a cynic would say, the other
thing that might be appealing is the visa. You know, sometimes,
for whatever reasons, you get high net worth individuals who
just want to have a place in New Zealand to
escape if the will goes to Hell in a hand
basket or something like that. And it's been raised, of
course that there isn't that they haven't yet relaxed the
(05:19):
foreign buyer rules for housing, so you'd really have to
be a resident, proper resident with this visa. You'd have
to live in the country for six months or more
than six months in a year to be able to
buy your own home, which could be a deterrent to
some of these guys who really just want to have
their investments and come in and stay for a couple
of months over the summer and check out all their
(05:40):
interesting investments, and they're basically like having a back the
new golf course and the vineyard they've invested in, and
then go see the tech stuff in Auckland and then
and they might not want to stick around for six months.
So that's where you're getting a lot of speculation now,
but that the government is probably going to come up
with some way of relaxing those foreign buyer rules too,
for maybe houses above two million.
Speaker 2 (06:02):
Over Winston's dead body, Well, that's what I.
Speaker 1 (06:04):
Would have thought, But then you could make the same
case for this, because this is foreign capital and coming
in and buying New Zealand assets effectively. So possibly he's
softening around the edges there on some of that, and
you know, who knows what the trade offs might be,
but certainly a lot of speculation in the business community
that there could be some softening of those rules because
(06:26):
it would it all starts to fit together a bit
more at that point when.
Speaker 2 (06:30):
You've got the Prime Minister going overseas and getting trade
deals and invest in z and setting up.
Speaker 1 (06:36):
Yeah, that's right, So they're focused on selling these selling
this idea around the world. They've taken the bit of
n z T that was sort of doing it and
say that they're creating a supercharged agency to do that. Look,
it all sounds pretty positive to me, I know, there
is a probably a counter argument from the left would
(06:57):
be that it's a lot of faith in the idea
that the money trickles.
Speaker 2 (07:00):
Down well to the right places too.
Speaker 1 (07:03):
Yeah, and so that that requires is a bit of
work with lining it all up and getting getting that
investment in the right place. And there's only so much,
you know, a government can really do. You start to
get into this is one of the troubles for Christopher
Lux in a national is that they are a sort
of center right government that believes that the government can
(07:24):
steer you know, a lot of business investment type stuff,
and they go too far one way, and Winston's not
keen in New Zealand verse not keen. They go too
far the other way. An act is not keen because
actor is a more sort of proper, proper classical neoliberals
to view that governments just shouldn't get involved in that
governments have to be careful about picking winners. The other
(07:48):
one that would you could see how this would all
line up. We had some hints from the Finance Minister
last week, Nichola Willison anything that they might look at
some sort of changes around corporate tax. I don't think
it's going to be I don't think we can afford
a wholesale you know, corporate tax rate cut to try
and compete with Ireland and Singapore and so on. But
(08:10):
they could be looking at targeted things again to help
make it more attractive in that tech sector or in
potentially mining or areas where someone who's got that spare
five million dollars likes the idea of being involved in
New Zealand because they like where we are, what we
look like.
Speaker 2 (08:30):
The James Cameron, Yeah.
Speaker 1 (08:32):
James Cameron thing, Peter Teel if you want her to
get into the high net worth.
Speaker 2 (08:35):
Bill Foley, is they actually want to be part of
the community, And yeah, absolutely.
Speaker 1 (08:39):
There are people in Julian Robertson who donated all that
out to the gallery. You know, there is a track
record of often very wealthy Americans falling in love with
this place and I guess it's a reasonable strategy for
a very small country to go well, we could encourage
more of those people will they you know, you know,
if they're just going to invest in their big properties
(09:01):
and maybe a bit of tourism, you could end up
sort of with a service economy around it, which seems
a little bit sort of disappointing in terms of value
for money. But if you can, yeah, if we can
direct it towards and say, look, you've got to get
into some really value added stuff for our economy. And
it's the sort of stuff that it's hard for Kiwis
(09:22):
to invest in because it's got to be you know,
your first thing is we go property Kiwi saver, maybe
dip a toe in directly into the sheer market. You know,
when you haven't got masses of money, you've got to
be fairly conservative with your investments. You've got to have
enough money to be able to take a punt on
a whole range of startups and you might have to
invest in, you know, forty startups to get the one
(09:45):
zero or rocket lab or whatever. So it is quite
high risk stuff and there is a limited pool of
Kiwis who can invest in that stuff. So that's why
I think they're into it.
Speaker 2 (09:58):
So coming in the rest of the world, that explains
it beautifully.
Speaker 1 (10:01):
Thank you, Liam, great, thank.
Speaker 2 (10:02):
You always good to talk Our Business Center.
Speaker 1 (10:05):
A largely For more from Kerry Wood and Mornings.
Speaker 2 (10:08):
Listen live to News Talks at B from nine am weekdays,
or follow the podcast on iHeartRadio
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be our economics editor at large, no business editor
at large. But we're really we're talking you.
Speaker 1 (00:16):
Can Yeah, that's right, Hi, carry goodbye.
Speaker 2 (00:20):
This is our first chat for the for the year.
Liam dan Joins is, Yeah, now, this this deal. Probably
everybody else who is listening totally understands the conversation that's
going on. But I want to know how five million
dollars is going to grow the economy, and how it's
(00:41):
directed to grow the economy and why. I mean, I
can totally understand going to get foreign investors for roads,
for infrastructure, for the big ticket items. How are we
not just going to get nail bars and Jim's mowing.
Speaker 1 (00:54):
Well, they're trying to direct it into high risk investing.
So this is if you think about it, it is
the investments that the banks are very shy of, you know,
so that the most obvious stuff is, you know, we
all want it to happen as high tech you know,
research and development, so sort of start a tech startups,
(01:15):
you know, the next Silicon valley. Stuff that's harder to
get capital for, you know.
Speaker 2 (01:21):
Is it even from our banks? And even with the
track record of a lot of our startups.
Speaker 1 (01:24):
Yeah, we we have some good systems in place to
get you know, high net worth individuals investing in that stuff.
So there is private equity in this country. There is
venture capital, but but not vast amounts and you know
by by international standards and so some more capital that
there would be good. I mean, even even things like agriculture.
The banks are pretty shy about things that don't have
(01:47):
a proven track record. So we would like to see
New Zealand diversify its agriculture and horticulture so we're not
reliant on them, you know, all on dairy and meat
for example.
Speaker 2 (01:59):
You know more, they're even shy of investing in your traditional.
Speaker 1 (02:03):
Yeah, community back from.
Speaker 2 (02:05):
Would this be a replacement, because I've been wondering where
the hell the money is going to come from from
rural for the rural station.
Speaker 1 (02:12):
If you were, well, if you're wanting to do something
a bit different in a rural setting and in the
banks weren't interested, then you've got to look to second
tier lenders or to you know, private equity effectively, and
that's where I guess they're saying, there's a limited pool
we could get more, you know, lots and lots of
five millions. We could add it up to some billions,
because the theory is that there are people here, people
(02:32):
around the world with a lot of money looking looking
for things to invest in that you know, and obviously
mining is the other big one. I'm sure Shane Jones
would you know, love to see a digging lithium and
germanium and all these other things out of the out
of hopefully some places that aren't too beautiful. But nevertheless
that that that's something that requires capital. And again if
(02:55):
you're prospecting and things. You know, there's big mining companies,
but then there's also smaller operations and if they were
going to be local operations, they would probably need some
foreign capital. And so if you have the right sort
of interested investor who's really passionate about something, so they
have to be really pretty rich. Because we're talking about
five million dollars for the high risk stuff, they're allowed
(03:17):
ten million if it's ten million minimum. If you're going
to do a bit more of a balanced thing. So
if you wanted some forestry and some commercial property and
some things that are a bit more traditional, you'd have
to invest ten million.
Speaker 2 (03:30):
And have something that's not growing the economy though.
Speaker 1 (03:33):
No, I guess. Look, I guess you can make a
case that just more money coming into the country helps
with overall wealth. But yeah, I mean it still would
be stuff that I guess that would say that the
banks aren't necessarily.
Speaker 2 (03:47):
For well, that makes sense. So it's basically like having
the foreign investors are just like another venture capital company,
and we have them in New Zealand. You're quite right.
I've done some work with them before, but not enough
of them.
Speaker 1 (04:02):
Not enough. But so the trick will be lining all
up and also making sure that we've got enough interesting
stuff to invest. And I've definitely had criticisms before that
you know that there isn't necessarily as big a capital
problem as people think. We've got an nz X here
that doesn't have messes of new listings coming on every year,
but when they do come on, they can raise some
(04:23):
money on the inst x and that's not happening that much.
So you've got you've got to be sure that you've
got I suppose it's chicken an egg and the government's
trying to get this rolling, but you've got to have
the interesting stuff to to track these investors. They've got
to be confident that we're going to make money. We
do have a good track record with a bunch of
tech companies and and you know, and horticulture, wine and
(04:45):
all that sort of stuff. So I can see why
we will be appealing. And I can see, well.
Speaker 2 (04:50):
We were once, I mean and not that long ago.
If we're looking at two point two billion dollars coming
and there was obviously something there that foreign investors found appealing.
Speaker 1 (04:59):
Well, look the other a cynic would say, the other
thing that might be appealing is the visa. You know, sometimes,
for whatever reasons, you get high net worth individuals who
just want to have a place in New Zealand to
escape if the will goes to Hell in a hand
basket or something like that. And it's been raised, of
course that there isn't that they haven't yet relaxed the
(05:19):
foreign buyer rules for housing, so you'd really have to
be a resident, proper resident with this visa. You'd have
to live in the country for six months or more
than six months in a year to be able to
buy your own home, which could be a deterrent to
some of these guys who really just want to have
their investments and come in and stay for a couple
of months over the summer and check out all their
(05:40):
interesting investments, and they're basically like having a back the
new golf course and the vineyard they've invested in, and
then go see the tech stuff in Auckland and then
and they might not want to stick around for six months.
So that's where you're getting a lot of speculation now,
but that the government is probably going to come up
with some way of relaxing those foreign buyer rules too,
for maybe houses above two million.
Speaker 2 (06:02):
Over Winston's dead body, Well, that's what I.
Speaker 1 (06:04):
Would have thought, But then you could make the same
case for this, because this is foreign capital and coming
in and buying New Zealand assets effectively. So possibly he's
softening around the edges there on some of that, and
you know, who knows what the trade offs might be,
but certainly a lot of speculation in the business community
that there could be some softening of those rules because
(06:26):
it would it all starts to fit together a bit
more at that point when.
Speaker 2 (06:30):
You've got the Prime Minister going overseas and getting trade
deals and invest in z and setting up.
Speaker 1 (06:36):
Yeah, that's right, So they're focused on selling these selling
this idea around the world. They've taken the bit of
n z T that was sort of doing it and
say that they're creating a supercharged agency to do that. Look,
it all sounds pretty positive to me, I know, there
is a probably a counter argument from the left would
(06:57):
be that it's a lot of faith in the idea
that the money trickles.
Speaker 2 (07:00):
Down well to the right places too.
Speaker 1 (07:03):
Yeah, and so that that requires is a bit of
work with lining it all up and getting getting that
investment in the right place. And there's only so much,
you know, a government can really do. You start to
get into this is one of the troubles for Christopher
Lux in a national is that they are a sort
of center right government that believes that the government can
(07:24):
steer you know, a lot of business investment type stuff,
and they go too far one way, and Winston's not
keen in New Zealand verse not keen. They go too
far the other way. An act is not keen because
actor is a more sort of proper, proper classical neoliberals
to view that governments just shouldn't get involved in that
governments have to be careful about picking winners. The other
(07:48):
one that would you could see how this would all
line up. We had some hints from the Finance Minister
last week, Nichola Willison anything that they might look at
some sort of changes around corporate tax. I don't think
it's going to be I don't think we can afford
a wholesale you know, corporate tax rate cut to try
and compete with Ireland and Singapore and so on. But
(08:10):
they could be looking at targeted things again to help
make it more attractive in that tech sector or in
potentially mining or areas where someone who's got that spare
five million dollars likes the idea of being involved in
New Zealand because they like where we are, what we
look like.
Speaker 2 (08:30):
The James Cameron, Yeah.
Speaker 1 (08:32):
James Cameron thing, Peter Teel if you want her to
get into the high net worth.
Speaker 2 (08:35):
Bill Foley, is they actually want to be part of
the community, And yeah, absolutely.
Speaker 1 (08:39):
There are people in Julian Robertson who donated all that
out to the gallery. You know, there is a track
record of often very wealthy Americans falling in love with
this place and I guess it's a reasonable strategy for
a very small country to go well, we could encourage
more of those people will they you know, you know,
if they're just going to invest in their big properties
(09:01):
and maybe a bit of tourism, you could end up
sort of with a service economy around it, which seems
a little bit sort of disappointing in terms of value
for money. But if you can, yeah, if we can
direct it towards and say, look, you've got to get
into some really value added stuff for our economy. And
it's the sort of stuff that it's hard for Kiwis
(09:22):
to invest in because it's got to be you know,
your first thing is we go property Kiwi saver, maybe
dip a toe in directly into the sheer market. You know,
when you haven't got masses of money, you've got to
be fairly conservative with your investments. You've got to have
enough money to be able to take a punt on
a whole range of startups and you might have to
invest in, you know, forty startups to get the one
(09:45):
zero or rocket lab or whatever. So it is quite
high risk stuff and there is a limited pool of
Kiwis who can invest in that stuff. So that's why
I think they're into it.
Speaker 2 (09:58):
So coming in the rest of the world, that explains
it beautifully.
Speaker 1 (10:01):
Thank you, Liam, great, thank.
Speaker 2 (10:02):
You always good to talk Our Business Center.
Speaker 1 (10:05):
A largely For more from Kerry Wood and Mornings.
Speaker 2 (10:08):
Listen live to News Talks at B from nine am weekdays,
or follow the podcast on iHeartRadio
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