Bayly AndrewANDREW BAYLY (National—Port Waikato): What an exciting speech from the Minister on this issue of overseas investment. It's a pleasure to be talking on this. National will be supporting this bill and we've made that position clear throughout although I would say there are certain aspects of the bill that we still have concerns with and I'll deal with that in a few minutes. I think it's worthwhile just reminding ourselves that this bill is seeking to change the urgent changes that were brought about as a result of COVID and there were a whole lot of changes that were made that basically granted the Minister and the Minister's just spoken very Draconian and wide-ranging powers to basically limit any overseas investment into New Zealand on the premise that as a result of COVID we were going to have lots and lots of New Zealand companies that would fail. We'd have all these international buyers coming in swooping up and buying them for a dollar when they had previously been worth a lot of money. At that point when the legislation was passed under urgency by the Government we had significant concerns with that and certainly had a view that they should be only very temporary of nature. This bill is about getting back to normality and trying to put in place some provisions and conditions that have longevity around them. I think the issue around this piece of legislation—and the Minister has done a pretty good job of sort of going through it but there's sort of three key issues. The first one is around the issue of sensitive land and how that's dealt with and I'll pick up on that in a moment. The second one is around a transaction involving so-called foreign entities. And the issue we've got if we think about a company like Fletcher Challenge which grew up and was owned and was established in New Zealand is because it's listed overseas in the Australian market it is technically under the current rules deemed to be a foreign entity. Because it's more than 25 percent owned by foreigners and because it's a listed company that's what happens. The rules change under this bill to have a couple of tests around that. One is if one person one foreigner has the ability to control more than 50 percent of the people that are put on the board or governance arrangements then that person and that company is now deemed a foreigner. So it gives a bit of latitude from that perspective. The other one is whether there's more than 10 percent of a company's securities who—means that they control again the 50 percent test but actually means that what it does is gives flexibilities for those listed companies to actually be able to operate without being deemed foreigners. And from that perspective I think we've got quite a good sort of basis in terms of determining what is foreign ownership going forward from now. The third element relates to leases. Previously leases were captured. What the bill sets out is if the lease is less than 10 years' duration it's actually not captured now under the bill. That's a good thing because if you think about the viticulture industry leasing of land by wine companies—often they will be deemed to be foreigners. They are leasing the land so they're not buying it obviously. If they have a lease for less than 10 years it means that they can continue and it's sort of the current way that they operate in New Zealand without being subject to undue scrutiny and I think that's a pretty good aspect to it. The issue around the assessment of transactions—the bill introduces a couple of provisions. The first one is around this test around whether in fact the land is sensitive and the Minister alluded to that. There's now very clear rules set out in the table around whether if you buy a business or even if you buy a very small plot of land it's deemed to be sensitive because of being a neighbouring or contiguous with another piece of land such as a marine area or even a coastal area or a river or whatever it might be. That under the previous rules would have been deemed subject to overseas investment. So that sort of clarifies that quite significantly and I think that's a pretty good aspect to it. The other aspect is the definition of if you're going to go through and assess a transaction whether in fact—under current rules we used to have what was called the counterfactual—if a foreigner bought it would that foreigner do even more than a New Zealand investor? And the test the counterfactual was that they had to do more in terms of either growing the business or employing more people or bringing further environmental impacts. The test now is a little bit simpler and it's a before and after test. Related to this is the issue around advertising which means that this transaction will need to be subject to some form of advertising. That is the test to make sure that the New Zealand interests or New Zealand component of that test is actually properly understood and quantified. The other aspect to it is a proportional approach. So if the land is of a really sensitive nature because of the scale of it then the proportionate approach is in terms of the decision making the benefits will need to be proportionately higher if it is to pass and be approved. And I think again that's a pretty good approach to dealing with the issue of certainly sensitive land. I think some of the other areas that we talked about in the committee and I think it's been quite useful discussion is the one around investment by sovereign wealth funds. At the moment we have a lot of foreign sovereign wealth funds. These are entities that professional habitual investors—they may come in and buy shares those types of things on the New Zealand Stock Exchange. They do not necessarily automatically need to be now subject to a national interest test. There may be occasions when they should be if the ownership or control of those sovereign funds is unclear. The other aspect is a call-in power which the Minister now has. This is when the asset or transaction involves something that is strategically important to New Zealand. So this is an issue that's pretty important in terms of how it's exercised by the Minister. The Minister spoke before about ports and airports and other such assets. The call-in power is quite a significant issue and power and needs to be exercised judiciously and we are hopeful that we've got the right balance in the legislation for that to occur. But the big issue that we're unhappy about in this bill is that the issue of land which is subject to forestry cutting rights or could be acquired for forestry rights—we are concerned that this is the only major issue that was not dealt with in this bill. So just to give backdrop to this forestry land or forests in New Zealand are currently owned in excess of 70 percent by foreigners. So that means that less than 20 percent or less than 30 percent actually is owned by domestic owners. That level of foreign ownership of our forests is something that we should be concerned about. Under the direction of the former Government a very special dispensation was made led by Winston Peters to make sure that foreign companies could come in and buy up to 999 hectares provided it was going to be used for forestry use or forestry cutting rights. We were very concerned about this at the time. We thought that to have a 5 hectare limit for farmland but a 999 hectare right for foreigners buying forests was disproportionate and actually an unwelcome arrangement.This is one of the issues that we think this bill does not adequately address. We put up a Supplementary Order Paper yesterday to try and deal with this issue because we want to make sure that we do not allow foreigners to come and buy our forestry assets without sufficient scrutiny. That's not to say that they shouldn't be buying them but they should be subject to the same amount of scrutiny that other land acquisitions are under. We're disappointed that that's not in the bill but it's recognised that the bill is going to be passed. I'd just like to finish off by thanking all of the officials for the help during the course of working through this bill.