Shearer David: Questions for Oral Answer — Questions to Ministers 
Shearer David: Questions for Oral Answer — Questions to Ministers 
[Volume:677;Page:395] 
1. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in all his Ministers? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: How can the Prime Minister have confidence in the Minister for Land Information and the Associate Minister of Finance given that the decision to sell the Crafar farms to Shanghai Pengxin has just been set aside in the High Court? 
Rt Hon JOHN KEY 
: It is important to understand the role of Ministers which is to follow the law and the interpretation of the law. All I can say at this point is that the interpretation given to the Overseas Investment Office by its own internal counsel of the way that it would interpret the law is clearly different from the way the judge sees things. 
David Shearer 
: Given the court’s decision today does he have confidence in his own judgment given that he said: “The law would not have allowed us to reverse the decision made by the Overseas Investment Office.”? 
Rt Hon JOHN KEY 
: Absolutely because the law states as was the recommendation from the Overseas Investment Office that sections 16 and 18 of the Overseas Investment Act need to be complied with. It was the belief of the Overseas Investment Office that sections 16 and 18 were complied with and indeed they may still be complied with. What will now happen is that the Overseas Investment Office will need to go back and have a look at the application and decide whether it meets the criteria as prescribed by the judgment today from the judge. That may still stand. 
Rt Hon Winston Peters 
: Can I ask the Minister how he could possibly say that the two Ministers concerned in fact interpreted the law correctly when— 
Hon Dr Nick Smith 
: Is Richwhite your mate now? 
Rt Hon Winston Peters 
: No he never was. He is your mate and a crook one at that. 
Mr SPEAKER 
: Order! The honourable member will resume his seat. 
Rt Hon Winston Peters 
: You heard what he said. 
Mr SPEAKER 
: I am on my feet and the member will cease interjecting. It is not uncommon for members to interject—and that was a very mild interjection—but members asking questions should not have to react like that. This is question time. The question being directed to the Prime Minister is important. Let us hear the supplementary question. 
Rt Hon Winston Peters 
: How can he say that these two Minsters interpreted the law correctly when a court of law with a legal background says they have not and that is the reason why it has been set aside or does he know more than the judge at court as well? 
Rt Hon JOHN KEY 
: It is important to understand the process here which is— 
Hon David Parker 
: A pity the Minister didn’t. 
Rt Hon JOHN KEY 
: Actually since 2005 Ministers from the Labour Government have relied on the Overseas Investment Office’s interpretation of the law and the way it has been prescribed. Now it is not unusual for judges to have a different view from internal counsel and in this particular case they have done that. But I will add that those Ministers relied for a very long time on the same view from the Overseas Investment Office. 
Mr SPEAKER 
: Before I call the Leader of the Opposition I say that this obviously is an issue of considerable public interest. I want to hear the Prime Minister’s answers even if the Labour front bench does not want to hear them. 
Hon David Parker 
: I raise a point of order Mr Speaker.  
Mr SPEAKER 
: I cannot imagine what the point of order might be. 
Hon David Parker 
: Well wait to hear it Mr Speaker. 
Mr SPEAKER 
: I am listening. 
Hon David Parker 
: Thank you. The Prime Minister made a reference to me alleging that my conduct had been illegal— 
Mr SPEAKER 
: Order! I have heard sufficient. The member will resume his seat. 
Hon David Parker 
: He does not— 
Mr SPEAKER 
: The member will resume his seat right now. The interjections from the Labour front bench started long before that—started long before that. The matter is serious. I think they should show courtesy to their own leader because I want to hear the answers to his questions.  
David Shearer 
: How can he express confidence in his Ministers when the judge ruled in paragraph 44 that the Ministers “misdirected themselves in law …”? 
Rt Hon JOHN KEY 
: I have not read the full judgment but that will be on the basis of the fact that they relied on the interpretation of law as they understood it as Ministers in a Labour Government did as well. It is the same advice and it is the same opinion that has applied ever since the Act has been there—since 2005. It is not unusual in New Zealand for judges to have a different interpretation from a body like the Overseas Investment Office. All the decisions made by Labour in the past on recommendations by the Overseas Investment Office relied on the same legal interpretation from the Overseas Investment Office. 
Dr Russel Norman 
: Does the Prime Minister now accept that his and his Government’s assertions that there was no other decision possible no longer stands up to scrutiny and it may be entirely possible that another decision was possible? 
Rt Hon JOHN KEY 
: No because if one looks at the advice from the Overseas Investment Office one sees that it makes it quite clear that Ministers need to follow the law and interpret whether sections 16 and 18 of the Act have been followed. If they have been followed Ministers would have to put up a reason why they believe—if they have a counter view—that those conditions were not met. Ministers no had reason to believe that those conditions had not been met. 
David Shearer 
: How he can express confidence in these Ministers when the judge ruled in paragraph 38 that the Ministers ignored “clear evidence that the benefit will accrue anyway should the land remain in … New Zealand ownership.”? 
Rt Hon JOHN KEY 
: The Overseas Investment Office applied a test in relation to benefits that asked whether there were benefits. The judge is now saying there is a new interpretation about the counterfactual of additional benefits. That is not the way the law was interpreted for all the advice provided to David Parker when he was the Minister in the gun. 
Rt Hon Winston Peters 
: How did the Prime Minister arrive at the view that his two Ministers had no discretion at all to exercise and were required to merely endorse the view of the Overseas Investment Office? 
Rt Hon JOHN KEY 
: It may come as a novelty but they need to follow the law and the law states in sections 16 and 18 that if they want to have a different opinion they— 
Mr SPEAKER 
: Order! I apologise to the Prime Minister. The Rt Hon Winston Peters asked a perfectly reasonable question. I do not know whether he could hear the answer but I struggled to hear the answer again because of the interjections on my left. That is not reasonable.  
Rt Hon JOHN KEY 
: The Overseas Investment Office made it quite clear in the correspondence to the Ministers that they are required to follow sections 16 and 18 of the law. They are quite entitled to change their opinions from the opinion offered by the Overseas Investment Office but they need to give reasons why. In the opinion of the law as it was interpreted there were no reasons. 
David Shearer 
: How can he express confidence in these Ministers when the judge ruled in paragraph 57 that the error was “not a mere technicality.” and that “the economic benefits caused by the overseas investment were materially overstated …”? 
Rt Hon JOHN KEY 
: That is the opinion of the judge. That would have to go back—[ 
Interruption 
]. Just before everyone gets a little bit excited here I say that the process will be that the Overseas Investment Office will have to go back and reconsider the application in light of the new ruling by the judge. It is eminently possible that the Overseas Investment Office will come up with exactly the same recommendations and Ministers will continue to accept them. 
Dr Russel Norman 
: Does he accept that the law as it exists today following this judgment means that the Government has to consider New Zealand buyers of New Zealand land and the benefits that they will bring not just the benefits that come from overseas buyers or to put it in colloquial language that New Zealanders should get a fair go? 
Rt Hon JOHN KEY 
: I am not in a position to offer advice on that because I have not had advice from Crown Law although it is my expectation we will get advice from both Crown Law and the Overseas Investment Office this afternoon. But what it is fair I think to characterise in these high-level terms is that the previous test as understood and applied by the Overseas Investment Office right from 2005 when Labour wrote the law and was the Government was whether there were benefits. The judge is now saying that the counterfactual has to be considered—whether there are greater benefits. That is a different test. 
David Shearer 
: In light of today’s High Court decision does he now accept that blaming the New Zealand - China free-trade agreement and the fact that Ministers had no discretion was plain and simply wrong? 
Rt Hon JOHN KEY 
: No Ministers need to follow the law just in the same way that Labour Government Ministers followed the recommendations that came from the Overseas Investment Office. If they want to change that they have to come up with reasons why. And if in a period of time the Overseas Investment Office comes back with the new recommendation to accept the bid—and let us argue for the moment that Ministers then accept that recommendation—that will be the correct interpretation of the law unless they can come up with another reason. If it is wrong it will have to be judicially reviewed. 
Dr Russel Norman 
: Does he accept that his Ministers will now have to apply the law as interpreted by the New Zealand judiciary and that that interpretation means they must look at the benefits that New Zealand buyers of this land could bring to New Zealand and compare the benefits that New Zealand buyers can bring with those of overseas investors—that that has to be the test that they apply to give New Zealanders a fair go? 
Rt Hon JOHN KEY 
: That is exactly the point. The point is that Ministers apply the law as it is understood. The previous understanding as was developed through the courts was exactly the one that the Overseas Investment Office applied. We now have new jurisprudence and you are quite right that both the Overseas Investment Office and the Ministers will now have to consider this ruling unless the Crown wanted to appeal the decision which I understand is extremely unlikely in which case yes they will have to go and consider the new benefits test as described and prescribed by the courts this afternoon.  
Rt Hon Winston Peters 
: How can the Prime Minister have confidence in two Ministers who at the first hurdle where they were required to make a decision on the law clearly as the court has so kindly pointed out to them were incapable of understanding the law? How can he have confidence in those two Ministers now? 
Rt Hon JOHN KEY 
: The member is just completely and factually incorrect. The interpretation of the Overseas Investment Act is one prescribed by the Overseas Investment Office. It is not for Ministers to rewrite the law’s interpretation by the Overseas Investment Office. 
David Shearer 
: I seek leave to table the decision by Justice Miller setting aside the Crafar farms decision dated today. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection.  
Document by leave laid on the Table of the House.