Parker DavidThird ReadingHon DAVID PARKER (Minister for Trade and Export Growth): I move That the Overseas Investment (Urgent Measures) Amendment Bill be now read a third time. The bill contains measures which the Government considers need to be put in place urgently to mitigate the economic consequences of COVID-19. This is one of two bills the Government's put before Parliament as a package. The other which has been referred to select committee for a longer process is the Overseas Investment Amendment Bill (No 3) which contains the remainder of the provisions of the phase two reforms of the Overseas Investment Act. It is still the Government's intention that the amendments made through this urgent bill be subject to further select committee and parliamentary scrutiny through the process of Parliament's consideration of that No. 3 bill. The COVID-19 global pandemic and related economic downturn have changed the foreign investment environment quite markedly. Perhaps as has been seen by members the most recent example is in respect of the Stuff media group which has suffered a significant decrease in revenue post-COVID. It's a significant media group owning amongst other newspapers the Dominion Post the Sunday Star-Times the Press and of course the Stuff website. It's sold for $1. It was a management buy-out but it shows the potential for the sale of strategically important assets at fire sale prices and without this legislation there is no ability for the Government to scrutinise those transactions to determine whether there's something that could be adverse to the country's either national security or long-term economic interests. In our opinion we're at a time where there could be sales at vastly reduced values that don't reflect the importance of a business to our economy and we believe that interim controls are needed to protect our national interest. We think that New Zealand's not alone in recognising the need to increase oversight of foreign investment in response to COVID-19. Australia Canada and a number of European countries have already taken steps to manage these risks. Indeed Australia took their threshold effectively to zero by statutory regulation a month or so ago. Equally and it is a point that's been made by the Opposition—and it's a point I agree with—productive foreign investment will play an important role in New Zealand's economic recovery and to get that balance right we're trying to strip out some of the existing screening regime which unnecessarily limits New Zealand business access to foreign investment that they need to survive and thrive. Specifically the bill introduces measures to increase oversight over foreign investment in response to COVID-19 as well as new powers to ensure that we can manage the risks associated with investments in our most sensitive assets. At the same time it seeks to liberalise the screening regime by cutting some of the red tape to increase our attractiveness to the sort of foreign investment that we need for our economic recovery. It is a time of unprecedented economic change and the Government we believe needs the ability to respond to that change. Therefore we have introduced a new emergency notification regime which requires overseas persons to notify the Government of certain investments being essentially a controlling stake in an existing business or business assets even though they wouldn't normally require a consent. This regime will allow the Government to assess these transactions before they proceed and if necessary to consider in some detail whether they're contrary to New Zealand's national interest and if so whether they should be subject to the sale on conditions or where there is no other option available to be blocked from proceeding. This power will be temporary. It will be reviewed every 90 days and indeed at the suggestion of various parties we've agreed to the first review being after 45 days and it will only remain in place while New Zealand is suffering from the economic impacts of COVID-19. The change to 45 days was a request that was made by the Finance and Expenditure Committee so that we can deal with whether we're over-capturing low-risk transactions—I agree that that is wise—and if so to consider options to mitigate that. In addition to the notification regime the bill also includes two other tools to close gaps. The Government doesn't think that we've got sufficient ability to block transactions that are contrary to our national interest the functioning of our democracy and other essential interests and that's notwithstanding the fact that we've always preserved space in our free-trade agreements for screening in those examples. We remedy this firstly by the introduction of a national interest test that can be applied to transactions that already require consent under the existing regime. Modelled on the Australian regime this is a tool that's got a wide discretion but will be rarely used and only where the Minister responsible for the Act considers it necessary. This test gives the Minister responsible for the Act a broad discretion to decide whether an investment is contrary to the national interest. This has advantages over a more rigid test because it allows for New Zealand's essential interest to be better protected by ensuring that all of the investments are assessed and it ensures that the Act is an enduring piece of legislation that can easily respond to changes in the global risk environment and indeed to changes in New Zealand capital markets. What might be necessary or prudent at one stage in an economic cycle might be different to other times. If for example there were liquidity crises in New Zealand you'd be more needing capital from overseas than if liquidity is flowing well within the New Zealand economy. The second tool to be introduced once the emergency notification regime is removed is a narrower call-in power that will enable the Government to review on an enduring basis investments in some strategically important businesses and examples include firms developing military or certain other advanced technologies that could pose significant risks to our national security or public order. The call-in power ensures that we can manage these risks permanently. I agree with other speakers in this debate as we've had it in the early stages that it's important that we continue to attract productive investment in New Zealand to support our recovery and sustain our future. Therefore at the same time as introducing those increased screening rights we're also bringing forward some measures to cut red tape in our screening regime. We're doing this because we want to encourage investments in the lower-risk transactions which are unnecessarily caught up in the Act at the moment and this includes purchases by New Zealand majority - owned and controlled entities. Examples of that are—there are some companies that are listed on the stock exchange that I think most members would agree are New Zealand - owned entities but they're caught because of foreign shareholdings. Often if those listed firms buy super funds and things overseas they're still caught by these overseas investment rules and it's unnecessarily complicated for them. Also some investments in land don't need to be screened where the land has little economic cultural or environmental value but is captured under the current regime because for example it's next to a public park or a sports field and there are a range of other small transactions that don't grant meaningful control over or access to sensitive New Zealand assets including some debt transactions that are currently caught by the regime but won't be in the future. In conclusion this bill supports New Zealand's interests at a critical time by increasing our oversight of foreign investment and at the same time cutting some of the unnecessary red tape so that overall the Act supports New Zealand's interest. We do remain open for business. Productive investment has always been important to our economic wellbeing and it will be in this recovery and beyond. I once again thank the select committee and the public as well as officials for their responsiveness and engagement on this time-critical issue. I commend the bill to the House.