Parker DavidOVERSEAS INVESTMENT AMENDMENT BILLSecond ReadingHon DAVID PARKER (Minister for Trade and Export Growth): I move That the Overseas Investment Amendment Bill be now read a second time. I'd like to start by thanking all who have worked on this exceptionally important piece of legislation. I stand here today proud of my fellow Ministers select committee members agency officials and all of the many New Zealanders who took the time to make a submission during the Finance and Expenditure Committee's consultation. In particular I'd like to thank all of those who provided useful feedback on the forestry changes during the three rounds of consultation with Māori hosted by Treasury and myself. They've helped deliver a piece of legislation which in turn helps to restore New Zealanders' birthrights because tonight we are enshrining in law that it is a privilege to invest in New Zealand residential land. This is another step to making the great Kiwi Dream of homeownership more of a reality once again. We should not be tenants in our own land. The scale of the problem is clear. Statistics New Zealand for the March 2018 quarter showed that nearly 10 percent of all home sales in the Queenstown Lakes District were to people who were not New Zealand citizens or residence visa holders. In the same period nearly 20 percent of the homes in central Auckland were sold to foreign buyers. The ASB survey out today says it's even higher and the Government doesn't think that it's a coincidence that these are some of the least affordable areas in New Zealand. That's why under the Government's changes investors will no longer be able to purchase the existing homes that there are in New Zealand. That means 1.8 million existing homes will now be out of reach of foreign buyers after we move through the following stages of this bill. Instead they'll normally only be able to be bought by New Zealand citizens and residence class visa holders who've spent or who commit to spend the majority of their time in New Zealand and who pay tax here. The bill works along the Government's extensive agenda to improve housing affordability including KiwiBuild the urban growth agenda and tax policy changes to discourage property speculation. We are addressing New Zealand's declining homeownership rates we are addressing rapidly increasing housing costs and we are addressing the associated rise in inequality—by ensuring that the prices of New Zealand homes whether they're lakeside gems the best houses in the Bay of Islands or family homes in our more modest suburbs in our regional towns and urban centres these prices are going to be set by local buyers not by the wealthy 1 percent from international markets.A number of changes have been made to the bill to ensure the regime channels what foreign direct investment we do have in housing towards boosting housing supply. Firstly developers of large apartment complexes are able to get approval to sell a portion of the apartments to overseas investors off the plans but only if they're for resale or lease to New Zealanders not for them to occupy. This adds to housing supply and it's indeed what the Labour Party electioneered on. Securing off the plan sales can be important to some of these developments accessing the finance they need to bank their developments. We're putting the right incentives in place to support this part of New Zealand's housing market.In addition to support other large housing projects the bill allows foreign developers to retain a long-term interest in new residential projects so long as they're being leased or onsold to New Zealanders including under rent-to-own or shared equity models. These changes too should assist first-home buyers to get a foot on the property ladder. In addition we've made changes to simplify the process to acquire residential land for commercial purposes such as supermarkets and hotels and we've also included an exemption for utility companies who sometimes need to acquire residential land for their utility purposes.Consistent with our international obligations under CER with Australia and our free-trade agreement with Singapore Australians and Singaporeans will be exempt from the new screening arrangements. Permanent residents from Australia and Singapore are treated the same way as New Zealand permanent residents.We also are addressing forestry issues and this bill reflects the importance the Government places on the forestry industry. The legislation both improves the coherence and simplicity of the screening regime for overseas investment in the forest sector. The current processes have not been working. They're excessively long they cost too much and everyone that is involved gets very frustrated. We already have high rates of foreign direct investment in forestry and we need more to help plant the one billion trees. Under the Government's proposed streamlined investment regime for forestry this applies irrespective of whether they're seeking to acquire a forest registration right or a freehold or leasehold interest in the land. These amendments reduce the regulatory burden that has been weighing on that sector's productivity and help position it for future growth.By bringing investments in forestry rights and certain forestry registration rights and certain other profit à prendres—which is a long-term interest in land—into the screening regime the same way as investments in leasehold and freehold are we've also removed a loophole that would otherwise have allowed investors to effectively avoid the screening regime that we have in forestry.It's important to note that New Zealand welcomes productive foreign investment when this adds to the economy and this Government is committed to maintaining New Zealand as an open outward-looking trading nation. Consistent with this vision the bill will allow persons to acquire residential land where they spend the majority of their time in New Zealand and are committed to reside and become tax resident in New Zealand; where their investment will increase housing supply; or where they'll use the land in the ways that support the growth of our economy and the creation of new jobs and opportunities.We are simplifying the process for acquiring an interest in our forestry land by reducing processing times. We're going to supercharge investment in that system with New Zealanders being the beneficiaries of a more effective and efficient sector. This bill will help ensure that a greater proportion of foreign direct investment is directed into the productive economy where the benefits of capital investment are greatest rather than in other areas such as housing where these flows can instead be detrimental.National said this could not be done—wrong. They said stamp duty was an option—wrong again. They said this would break lots of prior free-trade agreements—wrong yet again. If this had not been fixed before the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect the ability to control foreign buying of New Zealand homes would have been lost in practice forever not just for buyers from the CPTPP countries but for other countries including China under earlier free-trade agreements with the benefit of most favoured nation clauses. Through this legislation we are preserving the sovereignty of future Parliaments. Be they Governments of Labour - New Zealand First - Green disposition or National Governments we are preserving the future sovereignty of parliaments to tighten or loosen the rules. If we had not done this Parliament would have in effect lost the right to do that. But they've got to come to Parliament to do it. If future Governments want to change these rules they're not going to be able to sneak it through by regulation because we've got very tightly constrained regulation-making powers.I note that one of my colleagues from the other side of the House Clutha-Southland MP Hamish Walker has argued for a carve-out for foreigners buying homes in Queenstown. It seems he's happy that one in 10 properties in that region are sold to people who don't live here probably don't pay any tax here and don't vote here. He wants to ensure they can continue to outbid the New Zealanders that they are outbidding because that's the only time they buy: when they're outbidding in New Zealand.But it gets worse. He doesn't just want to carve out for foreigners; he wants to carve out only for rich foreigners. I quote from his press release: It would make sense to give a carve-out for foreigners buying for Queenstown—for example at a certain price point say over $5 million for foreign purchases in Queenstown." That is what they think on the other side of the House. That's the difference between Labour and National: we act for the interests of all New Zealanders not just the wealthy elite. We don't want to prefer the interests of foreign buyers from overseas 1 percenters who often don't pay tax anywhere—anywhere—and yet come here because they like what we've got here sometimes because their own countries are no longer safe places to live in.We're here for New Zealanders. We don't think they should be outbid by foreign buyers. It's our birthright not theirs and I commend this legislation to the House."