Friday, April 11, 2008

We're keeping our airport

So, the government has declined the Canadian Pension Plan's offer to buy Auckland Airport. It's not exactly surprising. The government telegraphed its hostility to the deal last month when it amended the Overseas Investment Regulations, and again when it introduced amendments to the Commerce Act subjecting airports to tighter control to prevent monopoly abuses. Reading the decision [PDF] though, the government's new criteria of assisting New Zealand to maintain control of strategically important infrastructure on sensitive land wasn't such a significant factor. Instead, the overwhelming factor was the complete lack of any benefit at all to New Zealand.

This is not productive investment. It would not result in any new technology being introduced, any new facilities being constructed, or in any new jobs being created. Instead, it was pure rent-seeking, an attempt to buy a monopoly asset then abuse that monopoly position to clip the ticket of every customer unfortunate enough to have to use it. This is not the sort of overseas investment we need, and to the extent that it results in New Zealanders, tourists, and exporters having to pay higher prices to feed rapacious foreign owners, is positively harmful to New Zealand.

(And yet, the Overseas Investment Office approved it. But I think that is more revealing of their institutional biases than the merits of the case. The OIO approves practically everything, and their predecessor, the Overseas Investment Commission, never met an applicant it didn't like. It's telling IMHO that the OIO assessed the vast majority of factors it had to consider - including all the ones given high importance by Ministers - either negatively or "unknown", and that it gave a positive assessment to only two of sixteen criteria. Despite this, it approved the bid anyway. Clearly, these people are not doing their job properly).

As for National, their wailing and gnashing of teeth and dire predictions of financial apocalypse are as predictable as they are wrong. Other countries - for example, Australia - also control the ownership of strategic assets such as airports. But they don't seem to have any trouble attracting foreign investment. It's also a reminder that National's vision of New Zealand's future is not of a country where we own our own infrastructure and control our own destiny, but of one where our roads, culture, communication systems, and power supply are all owned offshore, and where we are reduced to low-wage peons working for absentee landlords and dying in other people's wars. Their investment policy reflects this, their foreign policy reflects this, their privatisation policy reflects this, and their labour market policy reflects this. Their true loyalties lie not with the New Zealanders who vote for them, but with the international rich who fund them.