Cullen Michael: Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
Cullen Michael: Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21559] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The provisions relating to the marginal strip of course will be removed by Supplementary Order Paper. That is the condition of United Future’s support for the bill. It also enables the National Party to vote for it. 
But I have to say I think Pansy Wong should not push her luck too far in terms of her moral outrage on the provisions that the Finance and Expenditure Committee put in. First she voted for Nick Smith’s member’s bill which did exactly the same thing and that was only last year; and second the current provision for a marginal strip after subdivision on coastal property was put in place in 1991 under the previous National Government. So Ms Wong’s “shock-horror” reaction lacks a certain amount of “probe” at the end of it I think one could say! Her whispering in Brian Connell’s ear is not going to help the matter in that respect; it will just confuse him I think more than he is already confused on most of these matters. 
The substantive issue that she raises is important. It is fair to say that under the current legislation the Overseas Investment Commission has insufficient capacity to follow up in terms of monitoring but more important the current Act which this legislation completely replaces is quite inadequate in terms of the penalties and enforcement regime. This legislation will provide for a much more effective penalties and enforcement regime should a purchaser fail to fulfil the conditions of consent. At the moment what one ends up doing is forcing such purchasers to sell. That is actually at the extreme end of the spectrum in terms of the appropriate solution that ought to be followed through. 
Although I think that has been part of the cause of public concern I think there are wider issues of public concern. There is a widely held belief which is not actually true that foreign purchase leads to greater restriction on access over and through property. For some peculiar reason people think foreign purchase means land is not subject to other laws around planning etc. and is outside the New Zealand legal framework. That is completely untrue. I am always opposed to any move to import into this legislation attempts to impose regulatory procedures if one likes in terms of planning etc. What we are doing quite consciously in this bill is providing mechanisms whereby as part of the consideration we can take into account national-interest considerations around access conservation etc. and we have already begun to do some of that. The Young Nick’s Head agreement was exactly one of those. The Shania Twain agreement was another one of those kinds of agreements. We were able to get public gains in terms of access in terms of conservation and in terms of historical protection which could not have presented themselves if the sale had occurred to a New Zealand citizen or to a New Zealand resident person. 
I think we are engaged in an important balancing act. Naturally enough my colleague from Otago is concerned about the proportion of high-country land in the Queenstown Lakes District that is owned by overseas owners. 
Brian Connell 
: Quite high. 
Hon Dr MICHAEL CULLEN 
: It is quite high. Even the member for Rakaia when he raised the issue told us that 50 percent of land transferred in mid-Canterbury was transferred to foreign ownership. But there is actually quite a high— 
Brian Connell 
: I raise a point of order Madam Chairperson. If the Minister is going to refer to what I said at least I expect it to be reported accurately. I said that 50 percent of the land that had been resold went back into New Zealanders’ hands. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. It is a debating point. 
Hon Dr MICHAEL CULLEN 
: If I could be more precise the figure was slightly less than 50 percent. The member said that of the 11 properties sold six were bought by New Zealanders which by a very simple piece of arithmetic that is not beyond the member means that five were not. That is pretty close to 50 percent of the total being passed into foreign hands in a relatively brief space of time. 
There are some countries in the world where that could not happen at all—where foreigners are not allowed to buy land. In Australia for example there are still some pretty strange rules about non-Australian citizens buying urban property and they would apply to some of the most senior chief executives in Australia. I think we have to bear in mind that balance is required in this respect so that there is public confidence. The fact I think that the so-called two tired old parties are combined against the fringe elements in this House on this matter is not one that gives me great cause for concern. It gives me some degree of confidence that probably there is a sustainable consensus that will be reasonably stable moving forward into the future.