Chauvel Charles: Address in Reply 
Text is incorporated into the Bound Volume 
Chauvel Charles: Address in Reply 
[Sitting date: 16 February 2012. Volume:677;Page:500. Text is incorporated into the Bound Volume.] 
CHARLES CHAUVEL (Labour) 
: 
 Mr Deputy Speaker I want to congratulate you and your fellow presiding officers on your re-elections to office and also to all returning members to the House congratulations on your re-elections and to all new members congratulations on your elections. To the new members who have already made their maiden speeches congratulations—particularly to my four Labour colleagues David Clark Andrew Little Dr Megan Woods and Rino Tirikatene on the superb speeches that they made the other night in the House—and also to all the other members who have made their maiden speeches. To those who have not yet made maiden speeches best of luck. It is a great experience and one to really treasure.  
I feel it is a great privilege to be able to speak in the Address in Reply debate to the Speech from the Throne and particularly to support the amendment that has been moved by my friend and colleague our new leader David Shearer. I want to read the amendment in full because it merits repeating: “and the National-led Government will sell New Zealand’s assets against the will of the public; the Government has no ideas to create jobs or a clean and innovative New Zealand; that the Government is widening the gap between the very rich and the rest and therefore this House has no confidence in the National-led government.” That amendment has my wholehearted support and that of my colleagues and it has been reinforced by the handling of the Crafar farms affair.  
It is useful I think to just mention a bit of the background to that matter. The Shanghai Pengxin company made an offer for the Crafar farms. That was accepted by receivers KordaMentha early last year but it was conditional on Shanghai Pengxin getting Overseas Investment Office approval. It should be remembered that those farms total nearly 8000 hectares and they comprise 16 central and southern North Island properties. They have been in receivership for more than 2 years.  
The receivers gave Shanghai Pengxin until 31 January 2011 to make its offer understood to be worth between $210 million and $220 million unconditional. On Friday 20 January the Overseas Investment Office did provide its recommendation on the sale to the Minister for Land Information the Hon Maurice Williamson and Associate Minister of Finance the Hon Jonathan Coleman. After this Shanghai Pengxin waited until 27 January 2012 for the Ministers involved to reach a decision to allow the purchase to proceed.  
The success of the bid relied heavily on the involvement of Landcorp a State-owned enterprise in operating the farms as Shanghai Pengxin could not prove that it had any relevant experience and skill in farming practices. It is understood that Landcorp on behalf of the taxpayer had agreed to pay $18 million a year effectively to rent the farms back from Shanghai Pengxin. Landcorp of course had earlier bid for the farms but was unsuccessful.  
A Kiwi consortium last year offered $171.5 million for the farms to be divided amongst members of the consortium. Receivers said the offer was too cheap and KordaMentha reminded everybody concerned that it was legally obliged to try for the highest price for the estate. That was the decision that was taken to the Overseas Investment Office; that was the matter that was taken on to the High Court judicial review on 3 February. The decision yesterday by Justice Miller to overturn the Shanghai Pengxin sale means that the office must reconsider its recommendation in light of the interpretation that was set out by the High Court in its decision.  
There are three points that I think it is worth having on the record of the House about the decision. In setting aside the decision the court said first that the Ministers involved misdirected themselves on the law and that the essence of the misdirection was that comparing Shanghai Pengxin’s bid only against the status quo of the farms rather than against what another New Zealand investor would do with them—which was deemed likely to be similar to Shanghai Pengxin’s development plans—was a fundamental error.  
Hon Maurice Williamson 
: The same process Labour had used during its time in office. 
CHARLES CHAUVEL 
: Then Ministers ignored—and we hear from one of the Ministers in error that this was a process that has been used down the ages. Well actually he knows that is not right because it is not the process that the Hon David Parker employed in respect of the Auckland International Airport. He did something that that Minister refused to do—apply his own judgment in the national interest to the decision. Instead of just saying “We will flog it to the highest bidder because that suits us.” he asked what was actually in New Zealand’s national interest and that is the difference between the previous administration under Labour and the current administration. We actually did think about what mattered for New Zealand and we made decisions accordingly.  
The second key part of the decision of Justice Miller was that Ministers were held to have ignored clear evidence of the benefits that would accrue should the land remain in New Zealand ownership. Given that economic benefits would also be realised if the farms were sold to a New Zealand buyer the Shanghai Pengxin bid could not claim to be adding substantial benefit to the country and that is a basic and fundamental problem with the reasoning process used by the Ministers.  
Finally—and I think most damningly—the Ministers’ error was not a mere technicality and the economic benefits caused by the overseas investment were materially overstated. It is going to be very hard despite what we have heard in answers to questions to Ministers when this decision has to be taken again for that bid to be upheld—very very hard indeed. The High Court’s decision to overturn the sale shows that National simply got it wrong and in doing so as I said earlier just ignored the best interests of New Zealanders.  
It is worse than that because if one looks at the entire process there are some suspicions that are naturally arising as a result of the way in which the process was handled. It seems pretty clear actually stepping back that the Government always intended to sell this valuable land to Shanghai Pengxin despite clear evidence that it was not the right decision for New Zealand. John Key has repeatedly claimed that the law did not allow him or his Ministers to overrule a recommendation made by the Overseas Investment Office to approve the Chinese consortium’s application. That is plainly wrong and that is certainly very different to the sort of reasoning process employed for example by David Parker. Justice Miller’s decision shows that John Key’s claim was wrong and that this was simply a way of justifying erroneous decision-making on the part of the two Ministers whom I have referred to. Ministers do have the ability—clear ability—to turn down recommendations by the Overseas Investment Office.  
The test is very clear in the Act. They are not entitled to depart from the tests in the Act but they are entitled and required to apply their own judgment to that test. In fact the Act goes so far as to say that once they have received the advice from the office they can consult with whomever they like in reaching their final decision. There is simply no evidence that either of these Ministers applied the independent judgment in the interests of the country that we would expect them to.  
We on this side of the House said that the decision to sell to Shanghai Pengxin was wrong. It was not in New Zealand’s national interest. We all want foreign direct investment but we do not want to sell valuable land to foreign investors only to see profits that could have been reaped by New Zealand farmers and injected into our own economy heading offshore.  
John Key has repeatedly warned that there is a risk that New Zealanders could become tenants in our own land. Well this is now his chance to make sure that that does not happen in this case. We need to be setting a high standard for any further investment. We need an absolute assurance that any investment will add more value and provide more opportunities for New Zealanders and above all we need competent Ministers with a plan to build a prosperous fair and vibrant society. 
Hon Maurice Williamson 
: So you ran that ruler over the Shania Twain bid? 
CHARLES CHAUVEL 
: Sadly despite the shouts and shrieks from the Ministers concerned who now seem very wise after the event the sad thing about this case is that it shows that we do not have a cadre of Ministers with those skills or that commitment as members of the second Key National Government. That is why I wholeheartedly support the amendment that David Shearer has moved to the motion.