On Tuesday and Wednesday mornings I listened to Sean Plunket deftly inciting hysteria on NewstalkZB presumably to help his ratings. In my view there were very few objective callers and nervous listeners are probably waiting for China to invade if the sale to Pengxin goes through - as it should in my opinion.
Why do I think the sale to Pengxin should proceed:
1. The vendors are the Receivers appointed to protect the interests of Crafar Farms creditors. They have a legal obligation to get the best sale, which includes price, price for the creditors - something Plunket and his callers chose to ignore. Recievers also have a pecunary interest as they are rapacious fee chargers so the better the price the better their payment I would think.
2. As I understand it if the sale to Pengxin goes through Landcorp will then lease the properties. Penguixn will pay tax on the income received and unless they are going to be funding the farm improvements, or have done a deal with the Government, they will have very limited scope to reduce their NZ tax liability. Landcorp will employ the core staff probably along the following lines:
a) 16 farms will require 6 New Zealand managers.
b) Each farm will need at least 2 and up to 5 New Zealand general staff, depending size and herd sizes etc.
c) NZ contractors will be required for specialist work.
3. It is logical to expect the sale agreement to include allowing Pengx1n to send staff from China to gain experience on New Zealand farms. I would expect them to be extra to the core NZ staff requirements and they would probably be paid by Pengxin thus bringing overseas funds into NZ, possibly with some tax liability in NZ plus the GST on their spending while here.
If I have one reservation it is the likelihood that Landcorp will manage the properties. Their history of providing good returns on capital is not good and I think that Pengxin would do better to employ professional Farm Advisers and have the New Zealand Managers run the fars for them. I have no doubt this would produce significantly better returns on their capital investment.
These are the main points that I see around this issue. Hopefully it brings some realism to the mass media hysteria, and particularly on NewstalkZB orchestrated by Sean Plunket. By contrast what I have heard of Danny Watson he has been much more rational.
Meanwhile the Homeguard remain on standby pending word of the advancing Chinese.