9. Question No. 9—FinanceDr DEBORAH RUSSELL (Labour—New Lynn) to the Associate Minister of FinanceQuestion No. 9—Finance9. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Associate Minister of Finance: What actions is the Government taking to reform the Overseas Investment Act 2005?Hon DAVID PARKER (Associate Minister of Finance): The Government is delivering on its promise to protect New Zealanders' interests by enabling a new national interest test to be applied to the sale of important assets to overseas buyers. The new national interest discretion is consistent with global best practice and would give the Government a discretion to decline approval for purchases above the relevant screening threshold which ranges from $100 million to $500 million depending on the applicant country. A separate call-in power will apply to the sale of firms that sell military technology or are direct suppliers to our defence and security agencies. This power would only be used to stop investments that pose a significant risk to our national security or public order. These powers will be rarely used but are necessary to ensure our country's national interest and national security can be protected. The new discretions will be exercised by a senior Minister normally the Minister of Finance rather than the Ministers who take day-to-day decisions under the Act. This will bring New Zealand into line with other developed economies like Australia that already have a national interest discretion.Dr Deborah Russell: What actions is the Government taking to cut red tape under the Overseas Investment Act?Hon DAVID PARKER: We're making a number of changes to reduce the waste of time and money by overseas investors and by the Overseas Investment Office. We're doing this by better ensuring that the investor test focuses on material risks by simplifying the benefit tests and we're also removing screening requirements for transactions that pose little or no risk—for example commercial leases under 10 years or transactions involving companies that are majority owned and controlled by New Zealanders. For the first time we will also impose time frames for decisions to be made on applications. This was the most requested change by investors which we're also delivering on. Overall the changes will provide greater certainty for investors and New Zealanders while ensuring that our most critical assets are protected.Dr Deborah Russell: What other changes is the Government making to the Overseas Investment Act?Hon DAVID PARKER: The provisions of the last Ministerial Directive Letter which tightened up the sale of farms will be written into the primary Act. This will ensure that any future Government that wishes to change these rules will require the mandate of Parliament not the stroke of a ministerial pen. In response to public concerns about overseas investment in water bottling the Government will also require consideration of the impact on water quality and sustainability of a water-bottling enterprise when assessing an investment in sensitive land. Overall we believe that we've delivered a package that's balanced—cutting red tape whilst protecting critical assets. As a country we continue to welcome high-quality investments that support our plan for a productive sustainable and inclusive economy.Hon Paul Goldsmith: Why does he think it's OK for foreign investors to buy farmland to convert to forestry but not OK to buy farmland to farm or to convert to horticulture or many other things?Hon DAVID PARKER: It depends on the circumstances of each case but I would make the point that until we changed the overseas investment regime shortly after we came into Government there was no effective screening regime for forestry assets because forest registration rights were an unscreened class of investment and could be used to purchase any freehold or leasehold interest in a forest via a forest registration right. We closed that loophole.