McNair Craig: Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
McNair Craig: Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21535] 
CRAIG McNAIR (NZ First) 
: 
 In speaking to this Overseas Investment Bill I just remind the House that I think it is quite ironic that we are seeing a bill such as this go through the House today in all its stages under urgency. This was a bit before my time but a few members in the House will probably remember the Allan Wallbank petition to stop land sales to foreigners. It went up and down this country and was signed by New Zealanders in provincial towns and cities all over the place. It was vigorously supported by the Labour Party and was one of Labour’s big campaign issues at one time. Also I think it is ironic and crazy that the National Party is supporting a bill like this. It does not surprise me that National is supporting it because only 6 months ago we saw a policy flip-flop from the National Party when all of a sudden it thought twice about selling State-owned enterprises such as Kiwibank and some other strategic State-owned assets. All of a sudden it had a change of heart on that and developed a passion to keep certain assets in the hands of New Zealanders. 
I do not think that National was passionate about that but it obviously changed its policy because of what the facts tell us which is that New Zealanders are concerned about the issue and do not want more land or businesses to be in the hands of foreign-owned enterprises. I think it is very clear that the people of New Zealand have spoken on that issue. Labour has introduced this bill and National is supporting it when they have a track record together of selling off $16 billion of State-owned assets between 1984 and 1996. After having a culture such as that within those parties it does not surprise one to see this kind of legislation today. It was indeed asset sales such as those in the 1980s and 1990s that saw MMP evolve. One of the main reasons that people were outraged at the Labour and National Governments of the 1980s and 1990s was the fact that people did not feel that they were listened to. People felt that those Governments just railroaded over their beliefs and did what they thought was the best thing for New Zealand without listening to people. That is actually one of the reasons we have MMP today—obviously there are a few other reasons but that was one of the main reasons. 
Another issue that I want to talk about today—and I guess I will be talking about it in a little more depth over the Committee stage—is how the threshold of ownership will be increased as far as business investment is concerned from $50 million to $100 million. Well for a start I think we should have looked at moving it in the other way—taking it from $50 million downwards rather than pushing it up to $100 million. But I just want to highlight and bring to the House’s attention the fact that some businesses that were sold just in the last couple of years will miss out on this threshold and will not be looked at now because of the higher threshold. The Sime Darby Motor Group Ltd of Malaysia paid $61 million - plus with a potential additional consideration of up to $5 million to acquire Truck Investments Ltd. Its businesses include trucks sales companies and a few other things. Skycity Entertainment Group Ltd paid $93 million for Aspinall (NZ) Ltd which owns 40.5 percent of the Christchurch Casino. That obviously would miss the threshold. The AMP New Zealand Office Trust owned 43 percent from Australia paid $71 million for Mobil on the Park down here in Wellington and $75 million for the BNZ Centre. Telecom New Zealand Ltd owned 72 percent from overseas paid $62 million for the information technology services company Gen-i Ltd. 
We have a few other examples which I will skip over because there is such a long list. I think that illustrates my point very clearly. Vero Insurance New Zealand Ltd of Australia—the former Royal and SunAlliance New Zealand—paid $68 million for the motor vehicle and consumer goods warranty and credit insurance business of AutoSure Group Holdings. I will highlight just a couple more examples to the House. The UBS Group timber investors of USA paid $81 million for trees and forestry in the central North Island and then there was a very interesting one that I want to finish off with. There are obviously a lot more purchases that would miss out on the new threshold. But the Brunswick Corporation paid $54 million for 70 percent of Navman New Zealand Ltd with an option to buy the remaining 30 percent by 2005. Navman is a New Zealand - based electronics manufacturer of marine electronics and general navigation products. As I was reading about that I took a few seconds to think about it and it stopped me in my tracks. I remember the Minister for Industry and Regional Development trumpeting that business as one of New Zealand’s greatest successes. It was to be a new export opportunity for New Zealand and it was going to create lots of jobs for New Zealanders and lots of profit for New Zealand. I then noted that Navman was sold to Brunswick Corporation for $54 million which would miss out on that threshold. I think that is a very interesting thing to note and highlight to this House. 
Another issue I want to raise in this House is the definition of “good character”. The test of “good character” is used in a number of places but the term is not defined in the bill. I believe that there needs to be a tightening up of that definition. Actually it is not defined at all. The bill just states “good character”; that is what is there. The Overseas Investment Commission will think that it is all right as long as either a solicitor or even the individuals themselves write a letter to say that they have “good character”. I would think that most people or most corporations would say that they had great character. It should be up to the Overseas Investment Commission in New Zealand to make that decision rather than to just take their word for it. I also think that the Minister should take more responsibility in that decision-making process and I will elaborate more on that in the Committee stage. 
While we are on the definition of “good character” I point out that the Overseas Investment Commission in its 1998 report even stated itself that the term was mentioned numerous times in New Zealand legislation but was not once defined. The law is very ambiguous on that issue which leads to extremely weak enforcement in the present situation. That is added to by the Overseas Investment Commission’s ineffective methods or criteria. The regime is simply ambiguous and needs to be changed. I shall read a recommendation by one of the submitters to the Finance and Expenditure Committee. It is a very interesting recommendation and reads: “The term ‘good character’ should be defined in the bill. Its definition should reflect court interpretation but should be wider than criminal convictions including adherence to common ethical standards and absence of acts that would be illegal in New Zealand or which have given rise to adverse civil court findings.”