Parker DavidHon EUGENIE SAGE (Green): Thank you Mr Chair. I'm interested in the Minister's comment that there is something special about land and previously he's also said that it's a privilege to be an overseas investor and own land in Aotearoa. There's Supplementary Order Paper 219 in my name which does seek to change the test for land being bought by an overseas investor for forestry to the farmland test where there is attention to the participation and oversight by New Zealanders and the economic benefit that would be provided by that overseas applicant. Mr McKelvie in the second reading highlighted that there wasn't a lot of difference between a walnut tree I think he referred to and a pine tree. Similarly the Green Party can't see any difference between a pine tree and a kiwifruit vine. Now if the overseas investor is wanting to buy farmland to plant kiwifruit they have to go through the farmland test but not if they want to plant vines. The Climate Change Commission has highlighted that an overemphasis on afforestation undermines potentially the need to reduce emissions to mitigate climate change. Given that regardless of whether you're planting the trees for permanent carbon forestry or for production forestry you can be part of the emissions trading scheme and claim those carbon units what is the problem with buying farmland for forestry on an even playing field with buying farmland for farming for kiwifruit vines for horticulture or for whatever given that it is land and it is a privilege for overseas investors to buy land? We heard from Treasury that the difficulty was showing the economic return because the trees wouldn't be harvested for some decades but that seems a rather superficial reason not to have a level playing field for whatever purpose farmland is being bought for. So could the Minister expand on why we can't go back to what it was pre-2018 and New Zealand First's involvement and having the farmland test apply for land being bought for forestry? Hon DAVID PARKER (Minister for the Environment): Well the first thing I would say is that we have tightened rules around investment in farmland for a number of reasons. Some of those I've already outlined about how we don't want New Zealanders outbid but often by a very small amount by an overseas investor for the same piece of land. We tightened that by in part changing the letter of direction that had been given by the prior Government. Members may recall the controversy around Crafar Farms some years ago. There were New Zealand purchasers who were outbid by a small amount by an overseas group that had purchased those farms and it caused a furore in the country because it was one of the largest groups of farms in New Zealand. The then Government said that it was opposed. It introduced yet another condition into the Overseas Investment Act regulations and then sent a letter around the back door to the Overseas Investment Office that said Oh by the way look favourably on applications to buy farms up to 10 times the size of the average unit of that type of farm—i.e. up to nine dairy farms—and then turn down the 10th one." and we didn't like that. So we took away that letter of direction and then we codified into the Act the regulations so that for these things if a future Government wants to loosen up on them they're going to have to convince Parliament that they should be loosened up rather than do it through executive action which we thought was wrong. So if you wanted to go back to the prior status quo you sort of can't really because the situation in respect of farmland is now tougher than it was before all those changes were made and we don't think overseas investment in forestry ought to be that tough even though we think it ought to be a bit more rigorous than it currently is. The reason why we think the general "benefit to New Zealand" test is appropriate is that firstly the more stringent farmland benefit test would discourage the productive investment that we need in the production of forestry sector. Now members might say that they wish that wasn't the case but as Andrew Bayly observed earlier about 70 percent or thereabouts—Andrew Bayly: 72.Hon DAVID PARKER: —72 percent—thank you—of our forests are foreign-owned and they are reliant on foreign capital so we didn't really want to put at risk that sector by closing that route down too strictly. Secondly the risk to productive land can be managed under the general "benefit to New Zealand" test because the investor must demonstrate benefits that are in proportion to the sensitivity of the land. So proportionality in this sense means that overseas investment in our most sensitive land must demonstrate a higher degree of benefit for the land than land that is not so sensitive. Now that sensitivity goes partly to economic productivity. We don't want lots of our high-class lands planted out in forests I don't think as a country and there are a lot of communities concerned that you can go too far in that regard. So that now is relevant for the Overseas Investment Office as to whether this is inappropriate land to be planted out in production forestry. It could also consider whether it is land of high conservation value because even if it was unproductive land sometimes there are conservation values which mean that it shouldn't be planted out in pine forests for example. Even though there is not an environmental test within the environmental legislation it's not within the Overseas Investment Act—it's not the Resource Management Act and it shouldn't pretend to be. Finally the farmland benefit test captures a broad range of land including that which is unproductive or unsuitable for agriculture or horticulture and in those cases it could be disproportionate to impose a burden of the farmland test on investments in that case. So we think that this test is right for those reasons and accordingly the member's Supplementary Order Paper that seeks us to go further and apply the farmland test in respect of forestry investments won't be supported by the Labour Party."