Unserious defenders of NZ national interests

Our government finally made sufficient obeisance and secured a modest upgrade to its preferential trade agreement with the People’s Republic of China.  That included New Zealand agreeing (page 4) to take twice as many PRC-funded ideologically pre-screened Mandarin Language Assistants in our schools (rather than, say, properly funding language learning in schools ourselves).   The values-free cheerleaders for New Zealand deference and subservience to Beijing were all out praising the deal, and if the shameless National Party trade spokesman Todd McClay –  the one who last year was defending the PRC brutality in Xinjiang as being no more than a few vocational training schools and really none of anyone’s business –  was a bit carping and critical, he and his party were probably only critical that the current government does not (quite) do the full kowtow (they did actually sign that 22 country letter on Xinjiang, even if not one of them –  not an official, not a Minister, certainly not the Prime Minister –  will say a word about it).

Remarkably, for a pretty secretive government, sometimes one gets more coverage from the PRC government side than from our own.  The PRC Embassy here often has interesting statement or commentaries on its website.  There was such a commentary this week about the Prime Minister’s meeting with Li Keqiang in Thailand, including the prefential trade agreeement update, although for some mysterious reason I couldn’t see it on the PRC New Zealand embassy website but only on the PRC US embassy website.

Two lines caught my eye. There was this from the Chinese side

The Chinese side is committed to creating a market-oriented, and law-based international business environment, and hopes that the New Zealand side will create a level playing field in New Zealand for Chinese companies to invest and start business.

(One might scoff at the first half of that, but my interest was the second half)

and this describing the New Zealand government’s response

The New Zealand side is willing to provide a non-discriminative environment for companies from all countries investing and starting business in New Zealand.

Others noticed it to.  Here was the Executive Director of the China Council, the government/business propaganda arm of the New Zealand/PRC relationship

Pretty predictable (anything for the PRC, if only we – they – can get some more deals in the short term, is pretty much the China Council stance), but pretty unfortunate too.

The government is, or at least says it is, reviewing the Overseas Investment Act.  It was September last year when they issued terms of reference for the review.    There was a consultation document released in April this year, with a very short period for submissions, because –  according to the Cabinet paper released under the OIA – they wanted to ensure they had legislation passed this parliamentary term.  And yet here we are, now getting on for mid-November and nothing more has been heard.  They don’t seem to have even published the submissions yet.

National security was one of the dimensions covered (albeit superficially) in the consultation document.    Now ‘national security’ is one of those catch-alls that can be grossly abused –  see Trump’s grounds for steel tariffs on Canadian imports –  but the fact that it can be abused does not change the other, rather more important fact, that national security is an important issue, there are real threats (actual/potential), and one of the key roles of any government is to protect national security.    And, on the other hand, business interests have no particular concern for national security, especially if it gets in the way of their activities.

The worry here –  as the Prime Minister’s commitments are reported by the PRC –  is that neither does the government.    We seem to have governments more interested in enabling New Zealand businesses abroad, than in protecting the security, values, and integrity of New Zealand.

I generally have a pretty open approach to foreign investment.  It is often economically helpful and generally mutually beneficial.  Among firms and individuals from free and open societies, sharing similar values, and where companies are free to pursue their interests not those of their governments that is a pretty strong starting proposition.  Perhaps even more so when it involves investment from companies in countries near the frontiers of economic performance and productivity.  Personally, I’d favour removing pretty much all restrictions on such investment from abroad (perhaps preferably reciprocally, but the benefits to New Zealand mostly arise from opening up ourselves –  rather like removing all New Zealand tariffs (something successive governments refuse to do) would benefit New Zealand consumers).

I wrote about this briefly some months ago when I was lodging my own submission to the Overseas Invesment Act review, including how we should think about investment from the People’s Republic of China  and why treating all countries similarly simply does not make much sense (since neither the opportunities nor the risks are the same).  Here is what I wrote then

These days, New Zealand does not get much foreign direct investment –  and especially not much in the way of greenfields new developments.  I don’t think the screening etc regime is the main reason –  mostly, I suspect, we don’t have that much foreign investment because (a) there are few opportunities here, and (b) for the same sorts of reasons business investment generally has been weak for decades (high cost of capital, high real exchange rate, high taxes on business profits –  in that case, especially for foreign investors).  But I’d generally favour a more liberal environment, for almost all industries and for investors of almost all countries.

It is also worth recognising that most of any benefit (to productivity in New Zealand for example) from foreign investment will come from investment by firms based in rich and advanced countries.  Of course, there might be rare exceptions –  a firm based in Zambia, Laos or El Salvador –  but they will be exceptionally rare (the best ideas, technologies, management systems etc) will be in the rich countries –  part of why they got, and stay, rich.  So I’d favour a pretty-much open slather approach to foreign investment –  existing assets or new –  for investors based in rich countries (the OECD membership might be a decent starting point, and one could add in places like Singapore and Taiwan.

For most of the poorer or smaller countries, I really don’t care much what the rules are.  Probabilistically, there is almost nothing at stake (at least in economic terms) in maintaining restrictions on Zambia, Laos, El Salvador (or 100 others) if that is what the political process demands.  But, equally, there isn’t much risk or downside to opening up to them either, especially if one is focused on the benefit of New Zealanders being (generally) able to sell to the highest bidder.

There are various odious regimes in the world.  Most them don’t matter much to New Zealand at all (thinking places like Equatorial Guinea).  But the PRC does and in my view we should –  while the regime remains as it is – be treating investment from there quite differently, for various reasons.    One is a straightforward economic one.  Almost any large PRC firm is either an SOE or has a significant element of state/Party control to it.  We spent years here trying to reduce the hand of the state in direct business operations in New Zealand.  State entities typically don’t run businesses well, don’t allocate investment efficiently, and so on.  There is no more likelihood (to put it mildly) that PRC state-controlled companies will do so than the New Zealand government ones will –  and at least the New Zealand government ones are ultimately answerable to New Zealanders.  Such investment is likely to be a net negative for New Zealand even if the price paid to the initial New Zealand vendor is higher than that vendor could have got from another –  private –  purchaser, whether from New Zealand or another country.

But the deeper reason is that the PRC is a big and powerful totalitarian state, that has repeatedly displayed aggressive intent, which has values antithetical to those of most New Zealanders.   Individual PRC buyers may well be perfectly decent well-intentioned people –  as plenty of 1930s Germans were too –  but a totalitarian state has, and repeatedly demonstrated, its leverage over its own people, by fair means and (too often) foul.  We would simply be ill-advised to allow PRC-associated interests to have significant investments in many sectors in New Zealand.  One could think of media or telecom companies, or tech firms.    The PRC banks operating here should be a matter of concern, especially if they get materially larger than they are now.   But the concern should range wider.  For example, the greater the control PRC interests have of elements of the dairy industry, the more difficult New Zealand might find it to be handle the sort of economic coercion the PRC has attempted to engage in re various countries in recent years.

And, of course, to circle back to my earlier point, it is not as if the PRC is one of the world’s advanced economies.  Productivity levels languish far behind even New Zealand’s modest levels, and everyone recognises the dependence the regime has had on industrial espionage.  Deep pockets aside –  with a mix of market and non-market motives –  how much genuine benefit to New Zealanders is there likely to be from PRC foreign investment over time?

It is possible that this sort of restrictive regime could come at some economic cost, in terms of lost productivity opportunities for New Zealand. My sense is that it would probably be quite a small cost, but we can’t be sure.  Perhaps more importantly, many precautions have a cost –  whether it be a national defence force, Police, anti-virus software, or a lock on your front door.  The PRC is a threat to New Zealand and countries like us, and we need to be willing to spend some resources (perhaps sacrifice some short-term opportunities) to establish some resilience to those threats.

But, of course, our elected “leaders” and business establishment figures have no interest in any of this.  For them, it seems, the character of the regime matters not a jot, it demonstrated track record at home, abroad, and in New Zealand matter not a jot.  There are deals to be done, donations to be collected, and  –  if there are any risks –  well that will be someone else’s problem another day.  And in the process they’ve allowed our political system to become corrupted, indifferent to the character of the regime, indifferent to the values of New Zealanders.  But their “friends in Beijing” are no doubt happy.

I didn’t post a link then to my short submission, but I will do so now.

Submission on. reform of Overseas Investment Act May 2019

Some excerpts.  First, the liberalising proposal

As a general proposition, I suggest that the government should look at a model which more clearly distinguishes between countries which, broadly share similar values, interests, legal systems and approaches to business and remove all (or almost all) restrictions on foreign investment originating from such countries. A starting point for such a list might be the OECD countries plus Singapore and Taiwan. If the beneficial owners of a potential investor are predominantly from these countries, it isn’t obvious that the net benefits from screening would outweigh the costs, including deterrence of investment, of such a regime. Much of world cross-border foreign investment originates from these countries (and the countries at or near productivity frontiers are included in this group), and to the extent that there are prospective economic gains from liberalising the regime, those gains are likely to arise in respect of these countries.

And on the other hand

And at the other end of the spectrum should be a small list of named countries from which we should simply not welcome foreign direct investment, and where the presumption should be against granting approval for any but the smallest and most innocuous of investments. Such a list might include countries subject to United Nations sanctions (notably North Korea), mostly for global good-citizen reasons, and membership of the list might change over time – Germany might have appeared in the late 1930s, the Soviet Union and its satellites during the Cold War – but the key country that should feature on any such list today would be the People’s Republic of China.

In other words, the issue is not specific countries for all time, but specific assessments of the character of regimes, their control over business, and the nature of any threat.

The consultation document makes every effort to be neutral as between countries. But that is a mistake. It is right to recognise that the source of potential threats can change over time, but unless the government is willing to openly confront the nature of specific potentially-threatening countries, it is difficult to build a regime that will serve well both the national security and economic interest imperatives, and provide a clear framework for potential investors (and potential vendors).

What of the PRC?

The issues around the PRC are twofold. First, many of the larger potential foreign investors are state-owned enterprises (or state-controlled ones). We moved to reduce the role of state-owned companies in our economy, for good sound efficiency reasons, and we should establish a presumption in our foreign investment regime that foreign state-owned enterprises (especially ones that cannot operate at a genuine arms-length from government ownership/control) are unlikely to offer potential efficiency gains for the New Zealand economy. And second, because the People’s Republic of China is a regime (a) in which no one can operate fully at arms-length from the authorities (Party or state), (b) has a demonstrated record of not operating as a market economy, (c) shares almost none of the values of New Zealanders, and (d) represents a clear potential threat to the integrity and security of other countries, including in any future period of conflict. The fact that there may be many good, well-intentioned, investors from the PRC should simply not be relevant here, any more than the presence of decent well-intentioned Germans in the late 1930s should have left countries relaxed about German foreign investment at the time. The issue isn’t the individuals, but the authorities to which they are subject.

The risks around foreign investment from the PRC are not restricted to more-obviously sensitive assets (eg major media outlets or telecommunications systems) but apply more generally, partly because of the importance of PRC state-sponsored industrial espionage, but also because of the pervasive use by the PRC system of all sorts of potential sources of influence or connection. For example, vertically-integrated production and supply chains (including in the dairy industry, or the tourism sector would more difficult to withstand PRC attempts at economic coercion of the sort seen in various other countries in the last decade Investment from PRC sources represents a different and, generally, much more severe set of risks than that from Singapore, South Korea, Ireland or Canada.

More generally

The issue can be thought of in terms of a 2×2 matrix: there are benign countries large and small, and more troubling countries large and small. It is the larger and more troubling countries our restrictions should be focused on, and with regard not just to the current situation and immediate threats, but to maintaining resilience over, say, a 10 or 20 year horizon.

And to revert to the PRC

It is possible that such a near-complete ban on PRC-sourced foreign investment could come at some – likely modest – economic cost, the character of any such cost should not be seen as much different in kind to the price we pay for national defence and security systems. Without that expenditure, private consumption could be higher now – and potentially for decades to come – but we choose not to take that option because the recognise that there are risks and threats.

In this, as in other areas of public life, we shouldn’t be afraid to name the potentially hostile state and act accordingly, even as we would welcome such a state back into the fold when if the character of the regime changes. Germany and Japan were once our greatest threat, and are now close allies. They changed their regimes, systems, and strategic intent. When and if the government of China does, we should welcome foreign investment from there, commensurate with the values and practices of the new system. For now, however, we allow our system and society to be corroded from within to the extent we open our economy to significant PRC foreign investment, whatever the apparent short-term gains to individual vendors might be. It isn’t, by any means, the only (or perhaps even most important) set of PRC risks and threats but it is the one that is the subject of this consultation.

Businesses won’t care.  Governments should.  Ours appears not to.  The focus always –  be it on defence, the political system itself, or whatever (foreign investment, Confucius Institutes) – seems to be to minimise the issues, do as little as possible, try to pretend to the public there really isn’t an issue or potential threat at all.  That is pretty shameful and inexcusable.  That is our Prime Minister (and, of course, her chief rival has form suggesting that if anything he’d be worse on this score).

Talking of long-delayed inquiries, the Justice Committee’s inquiry into foreign interference –  the one the government didn’t want to open for public submissions at all –  has still not reported, and no reform legislation has been presented to Parliament either.   The big issues here are less about legislation than about will and mindset.  But again all the evidence points in the direction of big political parties preferring to minimise the issues to the very greatest extent possible.  Jian Yang, and the National and Labour Party “friends in Beijing” will be happy.

Reflecting on foreign ownership

[An Australian website yesterday reproduced, without my permission, my entire post on the new government’s immigration policy, running it under the heading “Is Jacinda Ardern a fake?”.   That heading does not –  even in the slightest –  represent my view.  I’m assuming the new government will do as they said in their manifesto.   And while I’m a bit sceptical as to how committed the new Prime Minister really is –  the policy having been adopted under her predecessor and she never having talked about it in public fora – the point of the article was (a) that the policy itself does not represent any significant change in the likely future contribution of immigration to population growth, and (b) that various overseas commentators have taken the, quite clearly laid out, Labour policy as something much more dramatic than it actually is.]

A few weeks ago, my 14 year son, mad-keen on ancient history and starting to study economics as well, brought home from the library a book about the economy and society of ancient Greece.  I’m not sure he read much of it, but I found it fascinating.   Among the things I learned was that the ancient Greek states, Athens most notably, generally banned foreigners – even resident foreigners – from owning land.   These states were typically actively engaged in international trade, and often encouraged foreigners with particular specialised skills to settle among them.  So it clearly wasn’t an autarkic approach –  some sort of isolation and national self-sufficiency.

But it caught my attention partly in the context of the change of government here, and the proposed new restrictions on non-resident foreigners being able to purchase existing dwellings.   But the issue goes wider than that, and the ambivalence about foreign investment and foreign ownership of New Zealand assets dates back decades at least.    And the Labour-New Zealand First agreement commits to

“strengthen the Overseas Investment Act and undertake a comprehensive register of foreign-owned land and housing”

This in a country where the OECD already rates our existing restrictions on foreign investment as more severe than those of almost any other advanced country (even if there is some genuine debate about how restrictive our screening regime –  what counts in the index –  actually is).

Of course, the proposed ban (which could yet turn into a heavy tax, to get around FTA constraints) on foreign purchases of existing properties, isn’t really much of a ban on foreign ownership at all.  Non-resident foreigners would be able to purchase a brand new house, with no particular restrictions, but not an existing house.    Since new and existing houses are, to a considerable extent, substitutes –  especially if you aren’t planning on living in the house – it isn’t even clear why the proposed ban would do more than throw a little sand in the wheels.   And land-use restrictions have been the main source of driving house+land prices far beyond sensible levels –  the best alternative use of those resources.   So it isn’t clear why a restriction on non-resident foreign purchases of existing houses will do anything to lower the price (increase effective supply) of developable urban land.   If governments can’t, or won’t, fix the land market, there might be more logic in a total ban on non-resident foreigners purchasing dwellings in New Zealand.   Were there to be strong evidence of a significant effect on our market of such non-resident foreign purchases, I could see a reasonable second or third-best case for such a restriction.  I’d prioritise the ability of our own people –  immigrant or native –  to buy a house+land over the freedom to sell to non-resident foreigners.    That’s a value judgement, but one I’m comfortable with.

To be honest, I’m not sure what to make of the data we have.  Lots of people are quite sceptical of the LINZ data, but I’m still struck by how high the non-resident numbers actually seem to be, at least in Auckland and Queenstown (the numbers are very small elsewhere).   For the first six months of this year, almost 5 per cent of Auckland gross sales were to buyers wholly or partly non tax residents of New Zealand.  In Queenstown-Lakes, the proportion was more than 10 per cent.   There were non-resident sellers as well, of course.  And some of those people (on both sides) were New Zealand citizens –  eg a New Zealander who has settled in Australia, no longer treated as a tax resident of New Zealand, and a few years later sells a New Zealand property.  But at a time when Chinese data show that capital outflows from China have hugely diminished

cap outflows

it is rather surprising how many purchases (net) were still being made by Chinese tax residents, even on the LINZ data with all its limitations.    (In Auckland, net Chinese purchases make up more than the total net foreign purchases –  ie people tax resident in other countries were net sellers.)   And recall that China is the issue simply because the place is currently so badly governed –  absent the rule of law –  that its own people don’t feel safe keeping their money in their own country: we never had an influx of Japanese, French or British purchasers.

With a well-functioning urban land market, sales of houses/apartments to non-resident foreigners  –  even ones that just sat empty –  could be just a modestly rewarding export industry.   But we are a very long way from that sort of well-functioning market.

In Eric Crampton’s piece the other day, he highlighted that the proposed restriction would affect those here on work visas, as well as those who were not resident at all.   If so, that was something I hadn’t realised.   But his argument against drawing the line there wasn’t particularly persuasive

If someone is building a life here, it shouldn’t matter what visa they’re on.

But it does.   If you are here on a student visa, or a temporary work visa, you might well hope you are now on a path to “a life here”.  There might even, in some cases, be an implied expectation that that is how things will turn out.  But New Zealand has not made a decision, at that point, to grant your wish.  It does that only at the point where you get a residence visa (and then permanent residence).  At that point we’ve said you can stay,  but not before.  If there is going to be ban or a tax, I don’t have a strong view on where the line should be drawn (there are avoidance issues wherever it is drawn).  In practice though, not many people going to another country (or even another city) for just a couple of years will buy a house –  the transactions costs are just too high –  so if we are going to impose restrictions, I’m not convinced drawing the line in a place that banned those on temporary visas would be particularly problematic.

But restrictions on non-resident purchases of urban dwellings are mostly a second-order distraction from the real regulatory failures that have rendered house prices here –  and in similar places abroad (eg Australia, UK, California) –  so unaffordable.

Perhaps more sensitive, and more difficult, issues are around other foreign ownership issues.  In reading around how they did things in Athens, I noted that foreigners might not have been able to own property, but they had the same access to the courts as citizens.  These days, however, we –  and many other countries –  go one further and give foreign investors better access to dispute resolution than we provide to domestic investors, through the investor-state dispute settlement (ISDS) provisions included in numerous preferential trade and investment agreements, including TPP (and presumably the replacement for it, now close to finalisation).    I wrote about these provisions back in 2015, quoting a writer for the New Yorker

“these provisions have been opposed by an unusual coalition of progressives and conservatives”

and a contributor to –  not exactly left-wing – Forbes magazine that ISDS provisions represent a

“subsidy to business that comes at the expense of domestic investment and the rule of law”

In a country with a good quality legal system, it should simply be offensive and unacceptable that we provide foreign investors access to different courts and dispute settlement procedures, under different rules, than are available to domestic firms (even in the same industry).   Equal status before the law is –  or was –  one of the cardinal principles of our democracy.    At very least, citizens should always have at least as good rights as non-citizens or non-residents.   (And that should apply to our citizens when operating in other countries, relative to the citizens of those countries –  but that is an issue for those governments, not ours.)

What of the foreign investment itself?

There are easy cases, at either end of the spectrum.  I don’t suppose anyone much is going to have a problem with a foreign investment fund owning an office block in Queen St.  And I don’t anyone would have opposed restrictions if, say, the Soviet Union had found willing sellers for the whole of Stewart Island.

The hard stuff is where to draw the line between those extremes.   There is a case –  I think generally quite a good one –  for a pretty relaxed view for most potential buyers and most potential assets.  In part, that is a property rights view.  If I own an asset and want to sell it, government restrictions on who can buy the asset lowers, probabilistically, the price I can command.  It is, in the jargon, an uncompensated regulatory taking.     Then again, a lot of the value of any (location-specific) asset arises from choices society has made collectively, about institutional quality, rule of law, good governance etc.  Auckland airport, for example, wouldn’t be worth much if New Zealand were an ill-governed hell-hole.

There is also the argument that the New Zealand and, in time, New Zealanders generally will benefit most if the assets are owned by those best able to utilise them.    When foreign investors bring technology or management expertise to a New Zealand industry or opportunity that isn’t as developed here, it is likely that in time there will be a wider benefit to New Zealand.  That was how, for example, Tasman Pulp and Paper was set up, under government sponsorship in the 1950s.  Or Comalco.  (And, yes, I deliberately choose examples where there might be some doubts as to whether these firms should have established here in the first place.)

There are also diversification arguments.  It bothers some people, but doesn’t really bother me, that most of our banking system is foreign-owned.  There are some possible downsides –  and we might have been better off if the foreign ownership was not so concentrated in Australia –  but my reading of the international (and New Zealand) experience is that we are probably better off (more stable) for having a largely-foreign owned banking system.

There are also bureaucratic competence/incentives arguments. Our current overseas investment act in many cases requires demonstrating that a proposed foreign purchase would be “beneficial to New Zealand”.   Beyond the evidence of, say, a foreign buyer being willing to offer the highest price, how comfortable can we be that officials and politicians have the ability or incentives to make those judgements correctly?

There are also arguments about debt vs equity.    You might, in some cases, worry about control passing to foreign owners.  But if domestic owners are reliant on lots of foreign debt there can be different, but at times more intense, levels of vulnerability.    Debt can be called up, or simply not rolled over.

Foreign investment has played a significant part in New Zealand’s economic history, and its economic development.  Sometimes in quite odd ways: the protectionist insulationist policies of post-war New Zealand encouraged quite a high degree of private direct foreign investment, as the most cost-effective way for foreign firms to get their products into the New Zealand market (inefficient and costly as it may have been for New Zealanders).  But my reading of the New Zealand evidence and data is that foreign investment restrictions aren’t to any material extent what holds New Zealand’s productivity performance back.  It is a more a case of there being too few good profitable new potential investment opportunities, whether for domestic investors or foreign.

None of this is really an argument for a laissez-faire approach, even if I’d still be more hands-off than most New Zealanders might.      National cohesion and national identity aren’t easy to pin down, but are both real and important.  And part of that –  perhaps especially in a small country –  is the control/ownership of land.   I find it quite plausible that there might be international agricultural operators who could add new and different value to New Zealand operations through ownership and management of substantial parcels of agricultural land.  But if, on the other hand, a growing number of wealthy offshore people simply wanted to own South Island stations and install local managers to farm much as they always have, I also don’t care very much if political unease is real enough that we end up simply saying “no” to such purchases on a large scale.  Again, at an extreme, if non-resident non-citizen buyers ended up owning 80 per cent of the land in some locality –  be it Northland or central Otago, or wherever –  then I think we’d have undermined something about what it means to be New Zealand –  given undue weight, including in local government, to the interests of people who aren’t part of this polity – in that area.     A country is some mix of people in some specific place; a bundle of tangible people and land, not just an idea.

How real are those particular risks?  I’m not sure –  perhaps the new register will help give us a better sense.  And there are plenty of countries –  other open liberal societies – that place few or no restrictions on such purchases.    But perhaps things are a bit different in a small country?

And then there are the national security dimensions, which seem to be treated too lightly here.  A standard response is “but the local government can always regulate things” .  I don’t think it is typically an adequate response if, say, a hostile foreign power owned key telecoms networks or ports/airports: regulation and governments just aren’t that good, and can also become too responsive to the interests of the overseas investors.    Of course, confronting this issue also involves identifying the minority of countries that count as potential “enemies” and, on the other hand, which are countries where there is (a) a substantial commonality of interest, and (b) where investors can be reasonably assumed to be working in their own interests, not those of their home governments.   At a time when the Soviet Army was just across the border, the West German government would have been crazy to have allowed Soviet interests to have purchased and controlled major West German infrastructure or technology assets.   We’d have been crazy to sell Stewart Island to Soviet interests.

Today’s Soviet Union is China, with the difference that these investment hypotheticals are increasingly real, used as a direct means of extending political reach.   That is nothing about race, and everything about (geo)politics.  I don’t think that taking these issues and threats seriously means banning all, or perhaps even most, Chinese foreign direct investment.  But it means a greater degree of realism, than tends to have pervaded recent governments, that their interests are not our interests, that all or most Chinese corporates are effectively under the thumb of the government and Party, and that not all voluntary transactions are likely to be beneficial for New Zealand as a whole even if they benefit both the buyer and the immediate seller.

There is no particularly strong conclusion to this post.  Drawing appropriate lines –  and translating them into legal rules –  isn’t easy, and that is often a good reason for restraint.  And yet neither is defining, or  fostering and sustaining, nationhood.  But that something is hard isn’t an excuse for simply ignoring the potential issues.  Part of doing that well is perhaps first fostering a compelling and convincing sense that governments are governing in the interests of New Zealanders as a whole.  Of course, different people will see those interests, and the policies that best serve them, differently –  that’s politics. But finding the right answers –  as perhaps around immigration –  is unlikely to proceed best by simply exchanging slogans.