Saudi-N.Z. venture opens way for back door sell-out — Mr Rowling

Press, 9 April 1980, Page 3

Saudi-N.Z. venture opens way for back door sell-out — Mr Rowling

PA Wellington The Leader of the Opposition (Mr Rowling) yesterday criticised the terms of the hewly formed Saudi-New Zealand Capital Corporation Agreement as opening the Way for a “backdoor sell-out directly contrary to New Zealand’s' long-term interests.”

He warned that the shareholding arrangements, and the criteria of ' financial activity would have to be tightened in New Zealand’s favour before the corporation would be acceptable to a Labour Government

Mr Rowling called on the Government to present a full iublic statement of its foreign investment policy and to reveal its secret negotiations with overseas interests. ■ "I am not opposed to the concept of a capital corporation as such,” he said. "We Inust be prepared to look at the most flexible and beneficial methods of raising necessary foreign investment

“But the Labour Party, and the next Labour government will in no way tolerate loose, open-ended arrangements which obscure the full impact of foreign investment frpm public view.” The Prime Minister (Mr Muldoon) said yesterday that Mr Rowling was obviously making up policy “off the top of his he*d” as he went along. Describing Mr Rowling’s reaction as “panic-stricken” Mr Muldoon said the Overseas Investment Commission’s policy was essentially the same as the policy approved by the Labour Government in 1973. The kind of statement Mr

Rowling made of foreign ownership of land and investment in New Zealand would do a great deal of damage to the response of potential overseas investors, Mr Muldoon said. .

Mr Rowling said his main points of concern were: — "The $2O million given as the corporation’s initial capital is only petty cash, in terms of the total investment needed over the next decade. If $lO million of Saudi capital is all that has been extracted, as the price for selling off New Zealand land, we must, ask what price the Government expects to pay for more meaningful investment — “The 50 per cent shareholding by the Saudi prince is totally unacceptable in terms of the financial and material power concentrated in one person. The New Zealand shareholding, on the other hand, is fragmented.

_ “There has been no indication of what criteria : and controls will be placed over the way in which the corporation disgorges its . funds. It is possible, in the absence of such controls, that'the effective New Zea- • land element will be diluted : even further.” i Mr Rowling said there had to be very great concern about the “secrecy and the confusion” in which this deal was being made. “There is no argument about the need for foreign investment, but equally such investment must be developed in terms of a clear and publicly understood Government policy, in which both the' balance of control and the ultimate shape of any agreement are known to all parties, especially the New Zealand people,” he said.

“The Government’s refusal to publish such criteria, and its furtive back-door sellouts, indicate very clearly that they either have no such policy, or they are too scared to set that policy before the people. “The Labour Party has made its policy and its intentions clear. In this case, we will demand a very considerable tightening of effective New Zealand control,” Mr Rowling said. New Zealand got about 51 per cent of its oil from Saudi Arabia, Mr Muldoon said.

It was one of several Middle East countries which wanted to develop relations I with smaller countries such as New Zealand, whose only interest was trading with 'them. “Where we have had the opportunity of getting a bit closer we have taken it,” he said.

There was no immediate i proposal to open a diplomatlie post in Saudi Arabia, but the question of accreditation was being reviewed. . The New Zealand ambassador to Rome was accredited to Saudi Arabia, but Mr Muldoon said he was not [Sure this was entirely appropriate.