The Singapore relationship – not all smiles

A plan to base a Singaporean air force jet fighter squadron at Ohakea appears to have stalled under the Labour Government.

It adds to the standoff with Singapore over the overseas investment legislation and suggests that the relationship with a country described as our closest friend in South East Asia is turning frosty.

That could impact on plans to enhance the trade relationship between the two countries.

The Ohakea plan was made public just before the election by National’s Defence Minister, Mark Mitchell, but it had been under discussion for at least a year beforehand. 

 Mitchell said  Singapore had also asked the New Zealand Government to consider accommodating F-15 fighter jets training at Ohakea long-term. 

“At the moment both countries are carrying out a range of studies to enable everyone to make an informed decision on a possible proposal,” he said. 

“.But we have similar values, and it could be a good fit. 

 “The Government is committed to following a good process and is firmly committed to work closely on this with local communities through their mayors and councils. That engagement has already begun.  

“There is a lot of work to be done before the possibility could come to fruition.”

Since then the Government has changed, and the new Defence Minister Ron Mark has had a meeting with his Singaporean counterpart in Auckland in March.

All the  communique from that meeting said about the Ohakea proposal was that “New Zealand would continue to evaluate the proposal for Singaporean F-15 jets to train at Ohakea Air Force Base.”

Relations between New Zealand Singapore deteriorated earlier this year when the Government introduced the Overseas Investment Bill limiting the ability of foreiogners to buy urban land.

Singapore objected, and several Wellington sources say there was some anger within the Singaporean Government that as an old and close friend of New Zealand they were not consulted in advance of the Bill being introduced.

Evidence of Singapore’s concerns came in a submission to the Select Committee considering the Bill from the CDL company, best known for its ownership of Millenium and Copthorne hotels in New Zealand.

But CDL is also a significant subdivision developer in New Zealand.

Importantly, it is part of the huge Singapore-based Hong Leong group which has powerful political connections in the island state.

The submission argued for a balance between preventing foreign speculators from buying residential property against the need to allow genuine foreign investors to develop residential land.

As a consequence of the standoff on the Bill progress  has also stalled on the negotiation of an Enhanced Economic Partnership between New Zealand and Singapore.

That may partly ease this week with the expectation that the Foreign Affairs Defence and Trade Committee reports the Overseas Investment Bill back with a possible exemption for Singaporean investors, possibly along the lines advocated by CDL.

The Enhanced Partnership would open up more trade opportunities for New Zealand in Singapore, but the country’s Defence Minister has made it clear that defence relations would be part of the deal.

Dr Ng Eng Hen said last October that “discussions are underway towards a Singapore-New Zealand Enhanced Partnership, of which defence and security will continue to be a key component.”

It would seem logical that if the training proposal is also held up that too could impact on the Closer Economic Partnership negotiations.

Mark was cautious about the proposal when he was asked about it at last week’s Foreign Affairs Defence and Trade Committee.

“We’ve had a conversation, we’ve had a paper at Cabinet,” he said.

“We’ve put it back for some more work to do.

“We are still working on that one.

“The bottom line is, and we’ve made it very clear that this is a huge advantage to Singapore.

“The opportunity to train their pilots in New Zealand gives many advantages to them and overcomes a raft of problems that they have.

“But it doesn’t come without an impact on our defence force just simply chewing up real estate for a start; the pressure on infrastructure, there is a whole range of issues that we have looked at.

“Suffice to say we have looked at it.

“We know the issues.

“We know costs. we know the social impact, what the economic advantages to the Manawatu – Rangitikei area will be.

“We  know how keen some of the mayors are, but there is more work to do.”

National’s Defence Minister, Mark Mitchell challenged Mark saying that all that work had been done when he was Minister.

Mark replied that if Mitchell felt he could have made the decision, he should have made it.

“Where we are, we are working on it.”

It will be a fine balance. It’s not clear why the coalition Government is reluctant to progress the Ohakea proposal. It might be objections to having a fighter squadron based in New Zealand, it might simply be the economic issues that Mark talked about.

But it, along with the overseas investment decisions, is shaping up to be a key issue that could define New Zealand’s relationship with South East Asia.