Leary IngridINGRID LEARY (Labour—Taieri): Sadly we won't be supporting this bill for three reasons really: first it's unnecessary and it's expensive for the taxpayer because it is unnecessary; secondly it mucks around with our World Trade Organization obligations and our free-trade agreement (FTA) obligations so it's quite untidy for our trade relationships and our foreign affairs; and thirdly it's actually dangerous because it doesn't manage foreign investment risk appropriately and that's because it's based on flawed assumptions about the value base of OECD—or the guarantees around that—and also the whakapapa if you like of legal bodies legal organisations that can appear to be from an OECD country but actually belong with another national State actor. In my view this suggestion to have a three-page bill to muck around so much with years and years of really sophisticated negotiations with our trading partners shows the transactional nature with which the ACT Party sees the world. In Labour it's about relationship. It's about getting long and enduring and trusted relationships and that takes time. It's not something that can be done with the flick of a pen and a three-page bill because somebody thinks it's a good idea to try and give status to certain countries based on some poor assumptions.So the bill is the name of Damien Smith and I congratulate him for getting it drawn and I really enjoy sitting on the Finance and Expenditure Committee with him. He believes that the bill is going exempt investors and basically allow better foreign direct investment into our country making it easier for investors to invest to get stronger trade links and to improve our quality of life. But I would say that Rt Hon Mike Moore who was our former Prime Minister and the Director-General of the World Trade Organization (WTO) from 1999 to 2002 would probably turn in his grave if he thought we were even considering this. In fact ACT has voted for those world trade agreements that we are signed up to.So there's no need for this legislation. We have a fit for purpose overseas investment regime. It does get updated and reviewed when it needs to. Most recently we did that around the production forestry land-use and back in 2018 quite high-profile changes were made around foreign investment in existing housing. So there is no need for change. Of course that's going to be one less burden for taxpayers.But the Overseas Investment Act 2005 which is 207 pages long does require overseas people to obtain consent for investments in certain New Zealand assets and it's taken a really balanced approach to that. It balances the need for foreign direct investment with security and with ensuring that the investments are made in the best interests of New Zealanders. So under that Act overseas persons generally include bodies corporate that are more than 25 percent owned or controlled by non - New Zealanders.The main feature as I said before is that the Act is country-neutral. It is about the transactions; it is not about the country. There are a couple of exceptions. Transactions relating to strategic assets land transactions and also Australia and Singaporean—certain transactions here. The Minister of Finance can consider country-specific risks when certain thresholds of investment are met and that is where those relate to strategic assets where they could be a risk to national security.So that regime which has been carefully thought through and which is updated and reviewed as I said has a nuanced risk-management mechanism. It's a bit of a sliding scale approach so it has a backstop national interest test involving sensitive land and strategic assets—for example if someone was wanting to purchase a major New Zealand media company. It has lower compliance requirements for investments in assets that are more productive and lower risk and it has automatic exemptions for certain low-risk investments.So that is the regime. It is fit for purpose and there is no need to change it. If we did change it in this way with this three-page bill it would be really confusing to the most-favoured nation clauses in the trade agreements and WTO obligations. It would send a really weird signal to some of our trusted partners such as Fiji Tonga and the Solomon Islands who are not in the OECD but we've heard this morning actually from the Hon Phil Twyford who's the Minister for Disarmament and Arms Control about the role that they've played recently in supporting and standing alongside New Zealand in negotiations around the nuclear non-proliferation treaty in New York.So by taking all of these most favoured nations which we would need to do under our WTO agreements and bringing them in through the OECD mechanism it would send a bit of a signal to our other friends and partners either that we're confused or actually that they're excluded. That's a difficult thing to explain to our Pacific nations particularly if countries like Turkey then suddenly get this special status in New Zealand.It's also dangerous because the bill would allow investors to access the exemption by incorporating a vehicle in an OECD member country regardless of where the ultimate ownership is. That could be a non-OECD country or it could be a country like Russia like China or like many others where the value base for the assumption around the security risk of the OECD country is therefore flawed. Incorporation can be relatively easy; it doesn't necessarily require material links to that country.Under the WTO General Agreement on Trade in Services and our FTAs as I said they would require virtually all foreign investment into New Zealand to be exempt from the Act's screening requirements. Not only that it would also link the OECD membership but by linking that it would cede some of the control of the screening regimes about high-level investments actually to the OECD which is a further risk.Damien Smith's whole argument really is based on an assumption that the OECD trade relationships share the same rules-based values as New Zealand does in its free-trade agreements and that simply isn't true; it's a flawed argument. We are an open outward-facing trading nation. We've secured historic free-trade agreements with the United Kingdom which sees a boost of almost $1 billion to New Zealand's GDP in unprecedented access for our exporters. We've upgraded our China FTA. We have got a pretty solid FTA with the European Union with a market of more than half a billion high-income consumers. We've got the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Pacific Agreement on Closer Economic Relations (PACER) Plus the trade that supports New Zealand and the Pacific which would go a bit topsy-turvy given that they are not in those are OECD countries should we pass this bill.Now those relationships and those trade agreements have taken years and years to get over the line or to upgrade. They involved very sophisticated negotiation teams considering very many balanced and nuanced considerations around trade but also around security around movement of people around climate change and around human rights. They are relationships that take time. They are not transactional in nature and they are in fact what make New Zealand attractive for investment because it means that when New Zealand goes into these relationships we do so with eyes wide open carefully and knowing that we have a trusted base to work from. That is the basis for us being an attractive place to invest which is counter in many ways to the suggestion of this bill which seeks to very quickly and I would almost say flippantly—in a three-page bill—take no heed of all of that history and simply open up a special club of countries that confuses the relationships we already have and makes assumptions about the type of value base that those countries will bring to their trading. So with those remarks as much as I enjoy sitting on the Finance and Expenditure Committee with Damien Smith and it is a shame that I don't think we'll be considering this bill with him—I commend him for taking the time to think about it. I know he's passionate about finance and about our economy but this bill is simply not the way to bring better direct foreign investment into New Zealand and I cannot commend it to the House.