Adams AmyOVERSEAS INVESTMENT AMENDMENT BILLIn CommitteePart 1 Sensitive landHon AMY ADAMS (National—Selwyn): Thank you Mr Chairman and I'm looking forward to an extensive debate on this important and frankly appalling piece of legislation that's in front of the committee. There are a number of very serious concerns on this side of the House and as we work our way through the debate on Part 1 I can tell the committee that we have quite a large number of amendments that my colleagues and I have been working on to try and rescue frankly this bill from the state it will return to the House in.This amendment to the Overseas Investment Act broadly came about because the Government had a view that it was overseas buyers of residential property that was the whole of the housing problem in New Zealand and that it was as simple as getting rid of those terrible buyers with Chinese-sounding surnames and if we simply stopped all those Chinese-sounding buyers from buying houses as Mr Twyford said—in an appalling show of stereotyping and nationalistic fervour without any evidence at all—then the problem would be solved. Well the problem that the Government has of course is that the data just doesn't back that up. In fact we know that the non-citizen non-resident buyers of residential property in New Zealand sits at around 2.8 percent and when you net off the number of sellers foreign sellers of residential property it barely cracks much over 1 percent. This is not the issue with housing affordability in New Zealand.The very simple way of describing the solution required to make housing more affordable is to build more houses. It's not rocket science. You don't simply stop demand for New Zealand houses. You don't simply come along and say Well let's just stop anyone wanting to buy a house in New Zealand." and worry about those 1 or 2 percent that New Zealand First likes to get their dog whistle out and shout about. Actually the challenge is to grow housing supply in New Zealand and here's the thing: much of the capital that comes into New Zealand to grow the housing market comes from overseas. A lot of the capital that New Zealand developers are relying on to build houses is foreign capital.And what has this Government done as their solution to address home building in New Zealand? They've put up a big "No foreigners welcome here" sign in the foreign capital market. They've made it very clear to the rest of the world that New Zealand is closed for business—New Zealand doesn't want foreign money coming in and building new houses. We don't want foreigners coming and setting up their business here. We want frankly to go back to this little closed-off isolated blinkered 1970s view of the world which we know New Zealand First still believe were the good old days. Well on this side of the House we do believe that New Zealand should be open and facing the world and we understand that it's foreign investment that has been a big part of driving the wealth and prosperity of New Zealand. And we certainly don't want to say to those foreign capital markets "Don't come in here. Don't support building. Don't support the growing of the housing supply." and that is what this bill does. It is a ridiculous dog's breakfast of a bill.All the way through the select committee my colleagues and I on the Finance and Expenditure Committee would put to officials sensible questions about how it works and how it is going to apply in practice and the only thing they could tell us was "Well that's what the Government's told us to do."—no understanding no practical implementation. They themselves knew I think that it didn't make sense. The only advice they could give us when we asked them "How's this going to work in practice? What modelling have you done on the effect of this?" was a blank look and a somewhat embarrassed "Well that's what the Government has told us to do." No thinking no analysis no advice and no impact; just a dogged blind determination to stick to their predetermined position that foreigners are the cause of the entire problem in New Zealand. Who cares that it will stop house building in New Zealand or that it will reduce the number of houses being built? Who cares that we're going to set up a big "Go away rest of the world" sign on the front of our economy as long as Mr Parker and the Labour Party can stick to their absolutely head in the sand view that this will somehow magic away all of the problems?The bill simply doesn't work. We saw a change made at the select committee that allowed a certain number of properties to be sold off the plan in large-scale apartment developments but you've got the strange situation where foreigners can now own these units and foreigners can live in these units as long as it's not the unit that the foreigner bought. So this bill—which apparently is going to address the evil of foreigners owing property in New Zealand which apparently is behind all of the concern—is still going to allow foreigners to come in buy large numbers of apartments live in large numbers of apartments and yet somehow it's all fixed. So we have a bill that simply does not even follow its own mantra. It doesn't work will not make a difference and in fact will make housing worse.I want to talk about the change to the bill brought into the select committee through the Minister's Supplementary Order Paper 19 to introduce what's called profits à prendre into the legislation. I know there are a number of lawyers in the committee including the Minister but for those who aren't a profit à prendre in its most simple explanation is simply the legal right to use the land and to take the commercial returns from it without owning the land. It's most commonly seen in things like forestry rights but actually it is used in a number of areas. So the Minister's explanation is that we need to include profits à prendre in the legislation in case in the future any future Government would want to. But again there is no analysis whatsoever of the economic impact of bringing in profits à prendre beyond the forestry sector.It is an unbelievably disjointed approach so that while forestry—who we know very well has a number of strong supporters in particular coalition partners in this Government—is brought in we then had officials tying themselves up in knots doing everything they could to make sure that the forestry interests would be not at all inconvenienced by this change. So in fact now a profit à prendre in the forestry space doesn't even need to come under this legislation until it's 1000 hectares. But for anyone else any other poor sop trying to make their living in this country from the land well: "You're in at 5 hectares." Again we asked officials "Why is there a 5-hectare limit for things like viticulture horticulture kiwifruit wine? What's the analysis that justifies that?" The answer: "There is none. There is no analysis. It's just what the Government told us to do."So you very quickly got a clear sense that this Government will look after certain people and certain interests but in terms of concerning themselves with the economic impact and the economic rationale or even taking the time to understand the economic rationale they couldn't be bothered. They couldn't be bothered getting it right. As long as the forestry sector was happy then this Government was happy and not only have we seen in this legislation the most remarkable acrobatics to ensure that forestry is protected by the number of hectares limit that now applies but we've seen pathways that apply only to forestry.Forestry owners now while they might technically be brought into the legislation can go along and get a pre-approval off a checklist. So if they rock up with a checklist and say "Well we're going to buy some land. I'm not sure where and I'm not sure how much but don't worry we'll have it in forestry." that's OK. But every other owner of land in this country whether they're setting up a vineyard as I say or planting kiwifruit—if they wanted to use the same process: "Oh no no no. That's not available." They have to go through the full counterfactual assessment. They have to go through all of the hoops and expense and cost and delay of a full Overseas Investment Office process for no good reason other than that Mr Parker thinks "Future Governments might want to have that so we'd better chuck it in."Never mind that we might completely scuttle some of those primary sector industries. I mean why would you care? This Government clearly is not that worried about scuttling large parts of our economy. What's a couple more sectors on the bonfire? I mean we're already talking about large-scale destruction of much of the primary sector. We've seen the oil and gas sector completely haemorrhage. We're seeing them now rip the guts out of the building and construction sector which is why the construction sector numbers are so low. We're seeing unemployment rates up today. Why not chuck another sector on the bonfire? Who cares about viticulture? Otherwise why would they not get some analysis? Why would they not even ask the question "How is this going to affect any of these sectors?" The Government simply doesn't care and that is the tragedy of this legislation. It is poorly thought through it is ideology gone mad it is head in the sand adherence to bumper sticker slogans that they've been running for nine years without understanding them and now New Zealand is going to pay the price. This is appalling legislation. Not only will it not do what it claims to do; it will make the situation worse.It is yet another example of a Government that hasn't done the work that doesn't understand the ramifications of what they're doing and that hasn't taken the time to ask for the analysis of what they're doing and they certainly haven't been prepared to listen to the very valid concerns of a number of those sectors who came before the select committee and said "This is a problem." There are certainly some areas where they've been very careful to look after particular interests—and that's something we'll be exploring a lot more as this debate goes on—but this is very bad law."