Economic Sovereignty

An increasing number of New Zealanders are questioning the drive for foreign investment, which in the mind of many amounts to a sell-off to foreign owners and with it a loss of assets.  There is evidence of the crippling effect of interest remittance to overseas investors, which is not offset by job creation and regional development.  This is particularly evident in the financial services and insurance sectors.  The inability by Kiwi owned companies to compete effectively with multinational corporates on an equal footing has been brought home by the effect of theChristchurchearthquake on our indigenous insurer AMI, which is mutually owned by its policy holders.  IBF applauds government’s timely intervention to avert its collapse with a $500m stand-by facility.  This should not be compared with the bale-out of South Canterbury Finance investors, where political expediency was tantamount in protecting regional interest.  Based on actuarial wisdom, AMI was ill prepared for a catastrophe of the magnitude experienced in two major events and unable to spread this risk internationally.  Existing policy holders can assume to be fully covered under the just announced provision and should be encouraged to stand by AMI to ensure its continued existence.          

By Ralph Penning, Trustee