Foster-Bell PaulPAUL FOSTER-BELL (National): The Land Transfer (Foreign Ownership of Land Register) Amendment Bill as introduced by the right honourable member Winston Peters unfortunately will not be supported by members on the National side going forward. There are several reasons for that but before I expound upon those let me just comment on the irony of the member who just resumed his seat referring to parchment and quills and horse-drawn carriages. There is an irony there.This is a country that has a modern land registry system already in place. This is a country where we have a very efficient and actually a legally reliable means of registering land. This is an important fact to note because as a country that has derived our heritage from our Commonwealth forebears we have a Torrens registration system in place in New Zealand.Rt Hon Winston Peters: What about the Māori? You forget about them do you?PAUL FOSTER-BELL: We have customary ownership too Mr Peters. We do have customary ownership but we know the view that New Zealand First takes on customary ownership of land. Anyway we have a system based on a Commonwealth heritage. It was actually in our own part of the world in Australasia that the Torrens registry system was devised—in South Australia actually by Sir Richard Torrens a former Premier of South Australia. So we have—Rt Hon Winston Peters: In what year? Come on now what year?PAUL FOSTER-BELL: —been innovators as well as inheritors of that proud tradition. It was back in the 1860s Mr Peters when you were just a young lad before you came to this place. I am sure you were still in high school. The system we have guarantees that the registry of land in the land registry system is actually evidence of ownership. It is not a system where we register ownership; registration is in fact evidence of ownership.This proposed legislation is not necessary and the reason I believe it is not necessary is that overseas tax resident buyers already form a very very small percentage of those who purchase land in New Zealand. Around 3 percent of New Zealand property transfers that are conducted in this country involve an overseas tax resident. So this bill diverts attention from the real issue. We know that we do have a shortage of housing in this country. We do have a shortage of housing in Auckland in particular but also in other fast-growing areas such as Tauranga and Hamilton—even in Wellington. We hope soon to have something of a housing shortage in Wellington as people flood here to take maximum advantage of the opportunities that our capital city offers. There are wonderful employment opportunities and there has been a 1.6 percent reduction in unemployment here over the last year.This bill in diverting attention from that housing supply issue—and the National-led Government is taking leadership with its comprehensive planning on this issue—is also adding significant costs and delays. We have recently reviewed the Land Transfer Act in New Zealand. Only several months ago through the Government Administration Committee and in this House we looked at exactly this issue of land transfer. In doing so we did modernise several elements that had become outdated. For instance the Land Transfer Act 1952 was clearly devised in a time where paper registers and typewriters and manual concatenation of land registry information was the only option available. But having computerised registration as we now do makes this an efficient system.In the select committee hearing process on those reforms we were advised that to add in as was suggested I believe by Mr Cunliffe at the time—or certainly the prospect was raised by the Hon David Cunliffe—some sort of test for foreign ownership as this bill seeks to do would add significant costs. We were advised by not only the representatives of the banking industry but also the learned and distinguished representatives of the legal profession. The Law Society was very very clear in its advice that this would add significant costs to those who are seeking to purchase homes. It talked about figures for a standard mum and dad house purchase or an individual or young couple buying a simple New Zealand house—an ordinary house without complex ownership arrangements. We are not talking about trusts or companies or partnerships or any other kind of arrangement; we are talking about the average New Zealander looking to buy their family home. This sort of measure could add in the order of $1500 or perhaps $2000.Rt Hon Winston Peters: How? How?PAUL FOSTER-BELL: This was the advice that the select committee received in terms of the additional legal work that would be required to provide the verification. The Inland Revenue Department gathers significant amounts of information but what we are talking about here is having lawyers check the work of other lawyers and that is where we can see something in the order of $1500 or maybe $2000 worth of costs added to the simple family home transaction. You can only imagine how much that would add to transactions that are more complicated. Obviously in our farming communities you often have property in family trusts or actually in partnerships or other company or limited liability structures. We do not want to see those extra compliance costs levelled upon the sellers or the buyers of homes and land in New Zealand as Mr Peters' bill risks doing.This bill provides for the insertion of a new section into the Land Transfer Act 1952. Clause 4 inserts new section 47A Registrar to keep foreign ownership of land register". So it requires the Registrar-General of Land to keep an electronic register—electronic at least; that is one thing I suppose given the talk before of quills and feather pens and ink. It requires the registrar to keep the person's name and nationality the amount and value of the land involved and the district or districts in which the land is situated. What we know is that the Overseas Investment Office already collects data about these large-scale applications and their subsequent grant or rejection but I would rather not see this extended to every single farm every single house every single cottage in every single village hamlet borough and small community in our country. There is no need to do this with such a small number of foreign owners purchasing land in New Zealand—only 3 percent.Richard Prosser: How do you know it's a small number if you don't check it?PAUL FOSTER-BELL: It is only 3 percent Mr Prosser so I think that that is unnecessary. It is also possible Mr Prosser—you may not be aware of this—for a person's nationality and their country of tax residence to be different or for a person to be registered as a tax resident or national of more than one country. In fact we may even have members of this House who are tax residents or nationals of more than one country. This means that the current information collected from property transfers is different from that required for the proposed foreign ownership of land registration so this actually counters the point that you have made Mr Prosser—that we are already collecting the information so why not just extend it further. The reality is that this is very different information that we are asking for.I am also somewhat uncomfortable with this concept of foreign ownership. "Foreign ownership" is a term undefined in this legislation. I think it will give rise to enormous compliance cost issues for sellers and purchasers of land but will also I think fuel a xenophobic argument that foreigners should not be able to own land in New Zealand. I think we should be thankful for the significant capital investment that foreign investors make when they come to New Zealand set up businesses here and employ people including many many New Zealanders. We would not want to put them off.A final point that I would make regards our trade agreements. We have a number of trade agreements where we have the ability to modify the Land Transfer Act 1952 but only in a non-discriminatory fashion. For instance for our closer economic relations investment protocol agreement with Australia concluded in 2013 we could not put up potential barriers to Australian investment whilst discriminating in that way against others. So this actually makes it a very complicated situation. We must adhere to the international covenants and agreements that we have concluded in good faith which also allow New Zealanders the opportunity to invest elsewhere and allow New Zealanders the ability to go and invest in Australia—as they are doing in increasing numbers given the strength of the New Zealand economy and the weakness of the Australian economy. I think the specific legal advice from the Ministry of Foreign Affairs and Trade when it comes should be taken into account because there needs to be a detailed assessment of whether this bill would breach our international obligations and our trade obligations which we have signed up to in good faith.This bill is unnecessary. It could potentially be very expensive. For that reason I would argue that it progress no further."