van de Molen Tim; Parker DavidTIM VAN DE MOLEN (National—Waikato): Thank you Mr Chair. Now look I just want to touch on some of the Minister's earlier comments. Initially I thought it was quite interesting his recollection of how this bill came to be in the state it has been over the last few years basically saying that the Labour Party were making the calls on it they were driving this and they had New Zealand First's permission to say so. You know what we saw was quite clearly that New Zealand First were driving this and the Minister can say well he didn't have the National Party's support around the screening regime for forestry. I'd be interested on his views around whether that's a necessary requirement for any other land-use purposes. He was rushing to get it through the Trans-Pacific Partnership—or with the additional letters added under that Government. And I wonder whether that was a consideration for him outside of the forestry—whether there were any other issues around horticulture for example or agriculture or even aquaculture—on land use as well that needed to be considered under that and whether they are now at risk because of the Comprehensive and Progressive Trans-Pacific Partnership agreement being in place.Also I'd be very keen to have an understanding from him on the adverse effects if any from his perspective over the last few years that the legislation has been in its current state on those rural communities in particular where we have seen a significant area of land converted to forestry fast-tracked through the OIA process under the special forestry test and outcompeting other New Zealand potential purchasers. The Minister raised the example of Crafar Farms a bit over a decade ago I think it was at that stage. But what we've seen in communities around New Zealand as a result of the legislation as it currently sits is that sheep and beef farmers have been outbid by overseas investors wanting to put quite productive land into forestry.I was interested by the proposal put forward by the Green Party the Hon Eugenie Sage in Supplementary Order Paper 219 looking to try and level up that playing field again because my concern is that any time the Government is getting involved and meddling in a market you're seeing perverse outcomes. And that's exactly what's happened here. Because of New Zealand First and their influence over the Labour Party and Labour wanting to have the Government benches we saw a perverse outcome that significantly skewed the market and resulted in a massive increase—tens and tens of thousands of hectares—of productive sheep and beef country going into forestry.Now in my view forestry should be able to compete in its own right if it's the most economic land use. If it has the best environmental practices on a particular area of land then so be it; that should be justification enough without having to have special exemptions to outcompete in the market and that's where we've got to under this. So I'd be very interested to know what adverse outcomes there were from it because I'm sure they must have done some analysis of that when considering how far to wind back those rules put in place because the Minister touched on his view that winding it back to the level of agriculture was too far. I'm surprised by that because actually we still have obviously more onerous requirements for any overseas investors wanting to invest in agricultural land. That was part of the submission from Federated Farmers as well noting that farmland to forestry going through the general benefit as opposed to farmland to farmland sales still having to go through the more stringent test for farming where the benefits have to be substantial and more than what a New Zealand owner could do.The example the Minister used around potentially non-productive land being put into forestry—their not being able to show that demonstrated additional value—I don't accept because ultimately if the land is so unproductive that it can't even generate a viable outcome or economic contribution from sheep and beef or sheep then surely having forestry on there will significantly increase that. So I think bringing it back would be a more appropriate consideration. Those are my initial questions and I've got plenty more for him soon.Hon DAVID PARKER (Minister for the Environment): I think some of the concerns of rural communities about forests being planted in the wrong place or the quantity of forests being too great—they're heartfelt. In some areas they are borne out by the statistics; in some areas they're actually not. Overall the number of hectares of additional forests that have been planted in the last few years is last time I checked still less than the deforestation in the prior decade. So I think we have to be a bit careful not to be too panic-stricken about the issue.I'm a strong believer in the efficiency of markets and I'm also a strong believer of internalising into economic transactions within those markets environmental externalities and I've spent a fair bit of my life trying to achieve those ends. Sometimes it seems futile in the imperfections that we end up with in New Zealand given compromises that are made either on the way through or by subsequent Governments that undo them. But one of the drivers of forestry for people that own land—and they're not all overseas owners; they're New Zealand owners often—is that they're actually doing it for the money because they can make more money out of forestry than they can alternative land uses. Well that's how markets are meant to operate including particularly the internalisation of environmental externalities that sometimes leads to that outcome.Now that said I also recognise that economics are not the be all and end all in all transactions including as to land use. I could make more money from my residential section if I could put up in my residential area a hundred-storey hotel but I'm not allowed to because there are non-economic factors that are relevant to the planning of the use of my residential land. I also accept that in rural areas there are appropriate planning rules that are more than economic and go to socio-economic outcomes. If local communities don't want their mid-grade land planted out in numbers of forests I think they should have a planning function that enables them to do that but that's outside the terms of the Overseas Investment Act.