Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
Overseas Investment Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21529] 
Overseas Investment Bill 
Second Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
 on behalf of the 
 Minister of Finance 
: I move  
That the Overseas Investment Bill be now read a second time 
. The Overseas Investment Bill balances the need for ensuring sufficient protection for New Zealand - sensitive assets with encouraging foreign investment in New Zealand. This bill does that by ensuring that the screening of foreign investment is focused on sensitive assets encouraging foreign investment that contributes to the New Zealand economy and reducing compliance costs. New Zealand has a welcome and open attitude towards inward foreign direct investment and it has been the Government’s intent to maintain that attitude. 
Submitters on the bill focused on a range of issues that relate to ensuring that foreign investment in New Zealand is of benefit to New Zealand and to ensuring that the potential gains foreign investments can bring to a small country like New Zealand are realised. The Government agrees that those are indeed the critical questions New Zealand faces when determining its foreign investment regime. Some submitters were in favour of New Zealand adopting a more liberal foreign investment regime and others favoured a more restrictive one. Other themes that emerged related to a wish for better information on foreign investment in New Zealand and a wish to ensure that provisions in the bill and conditions placed on an investor’s consent are monitored and effectively enforced. 
The Finance and Expenditure Committee did not suggest any changes to the bill that significantly affected the balance between the restrictiveness and the liberalness of the regime. The Government concurs with that assessment. As a result of the deliberations of the select committee changes to the criteria for the assessment of potential purchases of sensitive land by overseas persons have been suggested. The vast majority of transactions covered by the overseas investment regime are land-related so it was appropriate that the select committee examined that area of the bill in particular detail. The bill specifies a number of factors that may be relevant to the assessment of purchases of sensitive land by overseas persons. As per the first reading of the bill those factors can be summarised as economic development natural and historic heritage walking access and the offer to the Crown of any foreshore and seabed contained within the sensitive land. The select committee has recommended that the relevant Ministers explicitly consider all the factors— 
Madam SPEAKER 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Sitting suspended from 1 p.m. to 2 p.m. 
Hon JUDITH TIZARD 
: The Overseas Investment Bill seeks to ensure sufficient protection for New Zealand’s sensitive assets while encouraging overseas investment in New Zealand. The Finance and Expenditure Committee has recommended that the relevant Ministers explicitly consider all the factors that are specified in the bill. The factors in the assessment of purchases of sensitive land by overseas persons may be summarised as economic development natural and historic heritage walking access and the offer to the Crown of any foreshore and seabed contained within the sensitive land. The Minister must explicitly consider all the specified factors and determine which factors are relevant and how important each is to the overseas investment in question. Having considered the relevant factors the Minister must then determine whether the overseas investment will or is likely to benefit New Zealand. 
The select committee has suggested also changes to the specific factors to be taken into account when assessing potential purchases of sensitive land. It has recommended to the House that the Crown have the right of first refusal to purchase any lake bed of more than 8 hectares any riverbed with an average width of 3 metres or more and any lake included within sensitive land. This welcome addition to the bill ensures that New Zealand has the ability to control whether riverbed and lake bed pass into overseas ownership when they are contained within sensitive land with provisions similar to those already in the bill around foreshore and seabed. 
Furthermore the select committee has recommended that a new factor be added to the bill—a factor relating to the enhancement of the habitats of recreational fisheries and wildlife and walking access to the relevant areas. This addition to the bill is a result of submissions made to the select committee. Other changes relating to land investments are relatively minor. These include allowing potential enhancements—not solely maintenance of existing assets—to areas of historic heritage and improvements to walking access to be taken into account when assessments of sensitive land are made. These are relatively small but important improvements to the bill. 
An investor test is applied to all purchases of sensitive New Zealand assets. This will be standardised across business land and fishing investments and will consist of a good character test a financial commitment test and a business acumen test. The good character test which the select committee recommended be given some definition in the bill applies to all individual overseas persons while the financial commitment and business acumen tests apply to the collective of a company. 
The bill as reported back to the House from the select committee included provision for marginal strips to be set up when sensitive land that adjoins a significant waterway is sold to an overseas person. This provision would have ensured the creation of marginal strips to guarantee that access and conservation objectives around significant waterways were met when sensitive land was being sold to overseas persons. The select committee recommended that no compensation be payable unless the marginal strip is greater than 20 metres in width. A Supplementary Order Paper will be introduced into the House to remove the compulsory acquisition of marginal strips. This will ensure a parliamentary majority for the legislation. 
The bill makes provision for factors such as conservation values and walking access to be taken into account when decisions are made regarding investment in sensitive land. Access and conservation objectives will be dealt with on a case by case basis as part of the consent process rather than as a statutory and automatic provision. The Supplementary Order Paper I mentioned previously contains also a number of technical amendments to the bill. These cover a number of relatively minor technical issues the most important of which is amending the bill so that consent for a transaction will be required only when a property is acquired or a business is established. So it will no longer be necessary to specifically enable contracts to be entered into or given effect to conditional on consent being obtained. 
The bill revises the regulator’s information and guideline functions in clauses 32 and 37 to cover overseas investment rules generally. The select committee has recommended to the House a variety of other changes. The most major of these are as follows. It is recommended that the regulator have a new function: to produce regular statistics. That will assist in ensuring that submitters’ concerns around the information on foreign investment are met. It is recommended that an interest in farmland with a term of 3 years or more must be advertised. It is currently obligatory for all sensitive farmland subject to overseas investment to have been offered and advertised on the open market to New Zealand residents. An exemption currently exists if the interest in the land has a maximum term of less than 21 years. 
It is recommended that when considering a consent application the Minister should have the power to consult as he or she thinks appropriate. It is recommended that the regulator be able to charge an administrative penalty when an overseas person seeks a retrospective consent—that is when that person did not gain a consent when he or she should have. It is recommended that the value threshold of $100 million and the area threshold—0.4 hectares for some sensitive land—be placed in legislation in the future as opposed to being in regulation. This would mean that future changes to the coverage of the regime will have to be endorsed by Parliament. 
No major changes are recommended by the select committee around the definition of “overseas persons” the coverage of the regime or the monitoring and enforcement of the regime. The Government proposes that the House accept the recommendations I have outlined and other more minor recommendations I have not listed from the select committee. The passage of the Overseas Investment Bill is essential in ensuring that New Zealand’s overseas investment regime strikes the correct balance. I thank the select committee for its consideration of the bill and I commend the committee’s report to the House. 
JOHN KEY (National—Helensville) 
: 
 I arise on behalf of the National Party in relation to the Overseas Investment Bill. It is the intention of the National Party to support the bill provided the matter referred to by the Minister in her address in respect of no compensation for marginal strips is removed from the process. 
I want to take a step back and define the issues as I saw them as someone who sat on the Finance and Expenditure Committee. There were a great many submissions. I have to say there were from memory no submissions in favour of the bill and I do understand the reasons for that. I want to run though the dilemma as I see it from the National Party’s perspective. 
On a relative basis there have been very few examples when the Overseas Investment Commission has in fact declined purchases of New Zealand land or foreign purchases of New Zealand companies. It has been a relatively lightly used provision—most applications have been accepted. Secondly there is a genuine concern—and I think a warranted concern from New Zealanders—that we do not want to become tenants in our own country. I think the long-term future of New Zealand is not that of a bunch of people running around serving lattes to foreigners who own our country. We do have a brighter and better future for ourselves than just that. 
There is a relatively good argument to say that most countries have some provisions around who can and cannot purchase their land. Of course the risk in this situation is that New Zealand needs to think about its relative economic position compared with other countries. That is to say the average American income is of quite some magnitude above the average New Zealand income. By definition that means New Zealand can become quite a cheap entity. We face within that a risk around times when the exchange rate is particularly low that New Zealand becomes quite attractive solely from a currency-play perspective. 
That is the dilemma New Zealand faces. We have a global world now where the Internet is playing an interesting role. A large number of people are surfing the Internet looking to buy prime pieces of land around the world and New Zealand is one of those places that is very attractive because—as we know—it is a beautiful nation. Therefore New Zealand is highly attractive because of its price because of the global nature of the world and our free capital markets that allow people to come in and buy land. By definition of course if one thinks about New Zealand in one sense most New Zealanders would recognise that the land that is actually attractive to foreigners—and primarily we are talking about high-country stations and beachfront and lakefront sites—is the land that is likely to be purchased by foreigners when they come to New Zealand. The truth is that they will not come to New Zealand to buy some piece of dirt that is out in the middle of nowhere. Generally speaking they are coming for the choice bits of a great little country. 
So I think we have to consider that element and then contrast it with the reasons why on one level the National Party supports this bill—that is there are issues around property rights and owners wanting to maximise the property’s value when they sell the fact that we do live in a global world and broadly speaking a sort of acceptance that we are part of a world where we do not want to close ourselves off completely on a number of fronts. 
So I will take the first of those matters concerning company investments where the threshold for reference to the Overseas Investment Commission has gone—from memory—from something like $25 million to $100 million. That reflects the fact that it makes sense to do that for companies financed for less than that amount whether it is foreign or domestic capital financing those businesses—in one sense I see that as being largely irrelevant under that sort of measure. 
Above that threshold I am still relatively supportive if foreign capital wants to come to New Zealand but clearly there are national interest reasons why we would want to refer that. But under that level I think it is just a reflection of the growing size of businesses and of what is relevant to the international situation. 
Around the issues of sensitive lands the first important thing to note is that the bill is attempting to tighten up the current situation but it is worth remembering that there have been very few examples where things have been declined. So we have to put it in that context and say that this bill is an example of where we are actually making it more difficult. Young Nicks Head was a great example of a sensitive piece of land. It is a very small acreage but regardless of its cost it is now referred to the Overseas Investment Commission for its review. In that regard I think that should be seen as a very positive step. 
I want to talk for a moment about the marginal strips issue. If we recall the reason for marginal strips it is really an issue that relates to the Queen’s Chain which currently applies to about three-quarters of New Zealand. Most New Zealanders do not understand that situation terribly well. They think the Queen’s Chain is either something that has gone or something that applies all around the country. The truth is that it applies to about three-quarters of the country. But my point is—and I think it was introduced by Mr Parker—that in the event of a sale overseas if the land did not have a marginal strip to which the Queen’s Chain applied then the Queen’s Chain would be drawn up in the agreement in that instance. 
Again on one level I have some sympathy for that and Nick Smith from the National Party proposed having a similar kind of process in his member’s bill. That came from the situation on D’Urville Island where property was sold to foreigners and as I understand the case there was no Queen’s Chain. An offshore owner of an island gave instructions to those looking after the asset indicating—rightly or wrongly—that the owner would not allow anybody else on the island at all. So New Zealanders were effectively stopped from pulling up their dinghy on the beach depending on where the high tide mark was. 
I think on one level that locking New Zealanders out of that access to be able to land their boat alight and walk up a lake edge or whatever seems wrong so in that sense National would be very supportive of protecting that access. 
The issue becomes one where if we are not prepared to require that compensation be paid for allowing for access rights to the Queen’s Chain in private property sales then we are really taking a significant property right from those who are selling because the purchaser will almost certainly pay a bit less. That leaves us with the vexed question of whether the Crown wants to pay for the costs required to acquire the Queen’s Chain. In that respect I take it that the current Minister of Finance potentially shares my view—as a possible Minister of Finance—that it is a cost that we do not necessarily want to pay if I understand that correctly. But National does not think it is fair to demand that the Queen’s Chain be applied on a non-compensation basis. So on the assumption that that provision comes out of the bill we will be supporting it. 
I will digress very slightly to go back to the reason this issue is hugely sensitive which is that there is a feeling that too much is being sold offshore. Again I think pastoral leases are a good example of this. It is essentially correct to say that prior to 1995 pastoral leases could not be sold offshore but now they can be and quite a number of high-profile pastoral leases have moved offshore. So I think that New Zealanders are right to question that trend. On one level I think they are right to say that it is their country and they do not want to become tenants in their own country—but on another level it is also important to weigh the property rights of the owner against that view and to reflect a little on the fact that we now live in a somewhat more global world. 
The definition of what a foreigner is becomes extremely difficult also. As some people know I have spent a considerable amount of time living overseas and under the technical definition I may well have been deemed to be a foreigner when I came back and bought land back in New Zealand. So that situation creates some interesting issues. There is also the argument around someone who lives offshore but who wants to come to New Zealand and does not want to remain a taxpaying resident. That person may well have good grounds to buy here. So National will be supporting the bill assuming the provision relating to marginal strips comes out but we recognise that this is quite a finely balanced debate. 
DAVID PARKER (Labour—Otago) 
: 
 I would like to deal with the issue of marginal strips. Because of the numbers in Parliament we are being forced to drop the marginal strip provisions of this bill. 
Simon Power 
: It’s called democracy. 
DAVID PARKER 
: That is right; it is the effect of democracy. But I want to explain why we in the Labour Government feel that we were right to include them and wish that we had the numbers to put those provisions through. 
The underlying assertion behind Mr Key’s argument that I disagree with is the idea that a property right in land includes the right to sell it to an overseas person without restriction. That fundamental assertion underlies Mr Key’s objection to the compulsory laying off of marginal strips when one sells land to an overseas person. Of course the position at law in New Zealand and in many overseas countries including provinces of Canada parts of Japan and many other countries is that there is not an unrestricted right to sell to an overseas person. Indeed as Mr Key referred in his own speech until 1995 there was a virtual prohibition on the sale of rural lands to overseas persons under a part of the Land Settlement Promotion and Land Acquisition Act 1952 which was not repealed until 1995. So the idea that a Government has to concede that a property right in rural land includes the unrestricted right to sell it to an overseas person is wrong logically I suggest. 
Deborah Coddington 
: It’s not unrestricted now. 
DAVID PARKER 
: I know that it is not completely unrestricted now but it was virtually prohibited until 1995. If it was permissible virtually to prohibit the sale of land to overseas purchasers it must be permissible and not in contravention of the private property right to have a lesser degree of restriction on the sale of overseas land. All that the provisions in the legislation did was to impose a lesser degree of restriction on the sale of rural land to overseas persons than was the case until 1995. It was not expanding upon the position before 1995; it was trying to restore rights of access to our waterways which are sometimes placed at greater threat when land is sold to overseas persons. 
What evidence did the Finance and Expenditure Committee have that there were legitimate concerns on this front? For a start advertisements for Poronui Station were placed before us. Poronui Station was advertised for sale for US$50 million—in US currency—in airline magazines. The advertising material plainly included “private water” as a benefit to those who would acquire the property. That was emphasised in a number of places in the documentation. 
I know that in my electorate I have had complaints from some of my constituents that some of the overseas purchasers of our rural land more rigidly stick to what they assert to be their private property right to exclude people from accessing waterways that pass through their properties. We have the ridiculous situation that the title of some of those properties runs under the river and so although the landowner does not own the water he or she owns the riverbed. People have the right to float down the water but they have not got the right to walk down the riverbed if they are fishing—except with the consent of the landowner. 
One cannot fix all of these problems which have grown up over time through accidents of history I suspect. Mistakes were made in contravention of directions by earlier Governments that marginal strips should always be laid off. Sometimes those instructions were ignored by the relevant ministries particularly in relation to pastoral land where pastoral leases defined just the boundary and really did not have regard to the need to lay off marginal strips alongside some of the rivers that passed through that land. So Labour reached the position that it was appropriate to actually record that a private property right to land does not include the right to sell it to an overseas person without restriction. It never has. 
I would also like to point out what I see as—I am not allowed to use certain words here—absolutely irreconcilable: on the one hand certain political parties deny that Maori should have any rights to the foreshore because we need to protect the rights of all New Zealanders to access the foreshore yet those same political parties including National oppose restrictions on the sale of land to overseas people that would see the compulsory laying off of marginal strips alongside waterways. 
I am one who is sad to see those particular provisions lost from the bill but we are reliant on United Future to pass this legislation and those members would not have supported it with those provisions in it so accordingly we are removing those provisions. 
The balance of the legislation is good legislation. It effectively reflects the status quo in respect of business purchases that are to be permitted as of right without Overseas Investment Commission approval being required. Purchases up to the new limit have in recent decades always gone through anyway so there is no point in further regulating them. With those comments I am pleased to note my support for the bill. 
CRAIG McNAIR (NZ First) 
: 
 In speaking to this Overseas Investment Bill I just remind the House that I think it is quite ironic that we are seeing a bill such as this go through the House today in all its stages under urgency. This was a bit before my time but a few members in the House will probably remember the Allan Wallbank petition to stop land sales to foreigners. It went up and down this country and was signed by New Zealanders in provincial towns and cities all over the place. It was vigorously supported by the Labour Party and was one of Labour’s big campaign issues at one time. Also I think it is ironic and crazy that the National Party is supporting a bill like this. It does not surprise me that National is supporting it because only 6 months ago we saw a policy flip-flop from the National Party when all of a sudden it thought twice about selling State-owned enterprises such as Kiwibank and some other strategic State-owned assets. All of a sudden it had a change of heart on that and developed a passion to keep certain assets in the hands of New Zealanders. 
I do not think that National was passionate about that but it obviously changed its policy because of what the facts tell us which is that New Zealanders are concerned about the issue and do not want more land or businesses to be in the hands of foreign-owned enterprises. I think it is very clear that the people of New Zealand have spoken on that issue. Labour has introduced this bill and National is supporting it when they have a track record together of selling off $16 billion of State-owned assets between 1984 and 1996. After having a culture such as that within those parties it does not surprise one to see this kind of legislation today. It was indeed asset sales such as those in the 1980s and 1990s that saw MMP evolve. One of the main reasons that people were outraged at the Labour and National Governments of the 1980s and 1990s was the fact that people did not feel that they were listened to. People felt that those Governments just railroaded over their beliefs and did what they thought was the best thing for New Zealand without listening to people. That is actually one of the reasons we have MMP today—obviously there are a few other reasons but that was one of the main reasons. 
Another issue that I want to talk about today—and I guess I will be talking about it in a little more depth over the Committee stage—is how the threshold of ownership will be increased as far as business investment is concerned from $50 million to $100 million. Well for a start I think we should have looked at moving it in the other way—taking it from $50 million downwards rather than pushing it up to $100 million. But I just want to highlight and bring to the House’s attention the fact that some businesses that were sold just in the last couple of years will miss out on this threshold and will not be looked at now because of the higher threshold. The Sime Darby Motor Group Ltd of Malaysia paid $61 million - plus with a potential additional consideration of up to $5 million to acquire Truck Investments Ltd. Its businesses include trucks sales companies and a few other things. Skycity Entertainment Group Ltd paid $93 million for Aspinall (NZ) Ltd which owns 40.5 percent of the Christchurch Casino. That obviously would miss the threshold. The AMP New Zealand Office Trust owned 43 percent from Australia paid $71 million for Mobil on the Park down here in Wellington and $75 million for the BNZ Centre. Telecom New Zealand Ltd owned 72 percent from overseas paid $62 million for the information technology services company Gen-i Ltd. 
We have a few other examples which I will skip over because there is such a long list. I think that illustrates my point very clearly. Vero Insurance New Zealand Ltd of Australia—the former Royal and SunAlliance New Zealand—paid $68 million for the motor vehicle and consumer goods warranty and credit insurance business of AutoSure Group Holdings. I will highlight just a couple more examples to the House. The UBS Group timber investors of USA paid $81 million for trees and forestry in the central North Island and then there was a very interesting one that I want to finish off with. There are obviously a lot more purchases that would miss out on the new threshold. But the Brunswick Corporation paid $54 million for 70 percent of Navman New Zealand Ltd with an option to buy the remaining 30 percent by 2005. Navman is a New Zealand - based electronics manufacturer of marine electronics and general navigation products. As I was reading about that I took a few seconds to think about it and it stopped me in my tracks. I remember the Minister for Industry and Regional Development trumpeting that business as one of New Zealand’s greatest successes. It was to be a new export opportunity for New Zealand and it was going to create lots of jobs for New Zealanders and lots of profit for New Zealand. I then noted that Navman was sold to Brunswick Corporation for $54 million which would miss out on that threshold. I think that is a very interesting thing to note and highlight to this House. 
Another issue I want to raise in this House is the definition of “good character”. The test of “good character” is used in a number of places but the term is not defined in the bill. I believe that there needs to be a tightening up of that definition. Actually it is not defined at all. The bill just states “good character”; that is what is there. The Overseas Investment Commission will think that it is all right as long as either a solicitor or even the individuals themselves write a letter to say that they have “good character”. I would think that most people or most corporations would say that they had great character. It should be up to the Overseas Investment Commission in New Zealand to make that decision rather than to just take their word for it. I also think that the Minister should take more responsibility in that decision-making process and I will elaborate more on that in the Committee stage. 
While we are on the definition of “good character” I point out that the Overseas Investment Commission in its 1998 report even stated itself that the term was mentioned numerous times in New Zealand legislation but was not once defined. The law is very ambiguous on that issue which leads to extremely weak enforcement in the present situation. That is added to by the Overseas Investment Commission’s ineffective methods or criteria. The regime is simply ambiguous and needs to be changed. I shall read a recommendation by one of the submitters to the Finance and Expenditure Committee. It is a very interesting recommendation and reads: “The term ‘good character’ should be defined in the bill. Its definition should reflect court interpretation but should be wider than criminal convictions including adherence to common ethical standards and absence of acts that would be illegal in New Zealand or which have given rise to adverse civil court findings.” 
DEBORAH CODDINGTON (ACT) 
: 
 That was an example of why people should take another take on this election. Could the two old parties please consider going into coalition together instead of with New Zealand First because if either of them do heaven help us! 
I am going to be very unpopular. It is easy to take the populist stand on legislation like this and say that we support it. There is a lot of emotion around foreign investment in this country and a lot of that emotional talk is absolutely not founded on reason at all. We have just had an example of it. This country was founded on foreign investment—our insurance companies and our banks. Our banks are still mostly owned by foreigners. If New Zealanders do not like that they do not have to use them. They do not have to use the bank they do not have to use their mobile phones and they do not have to patronise foreign companies. Foreign investment overwhelmingly has been very good for this country. We would not survive without it. 
Interestingly enough those who follow Australian politics might remember Prime Minister Paul Keating saying a while back that the foreign ownership of the Gold Coast must be stopped. He wanted to stop Japanese people from buying up property on the Gold Coast. The reason he came out with that—because in Australia they are a lot more robust than us—was that they did not want those slanty-eyed people buying the Gold Coast. Someone else answered him in the debate by saying that no they were buying it all off New Zealanders. 
That is the problem. There are already restrictions on foreigners buying land in New Zealand and I contend that those restrictions are stringent enough. But if we start to restrict them even further we have to be consistent and consider what that does to New Zealanders who want to buy overseas. 
But I come to the basic principle of this bill which is the issue of private property rights. I strongly believe that people who own property have the right to sell it to somebody who will pay them the highest price. It comes back to emotion again. A lot of people think that they do not want foreigners owning all our prime pieces of land. But if those people owned that prime piece of land they would want to get the best price for it when they sell it. They might want to sell their high-country station and use the money to fund their grandchildren’s tertiary education or put it into a retirement fund. We already have restrictions. 
Mr Parker on the opposite side of the House seemed to imply that parties who opposed this bill want unrestricted access. We are not saying that. We are saying that the restrictions that are already there are stringent. The National member John Key cited D’urville Island. He said that it was sold completely to foreign ownership. He disagreed with that because he said ordinary Kiwis could not pull up their dinghies on the beach. A lot of ordinary Kiwis would like to have a swim in his Parnell swimming pool but they are not allowed to. Why? Because it is his private property and that is respected. People respect that he owns it that he worked hard for the money that went into building and purchasing it and that he has the right to restrict access to any common Kiwi who wants to have a swim in his pool. One cannot equivocate with property rights. 
Mr Key talked about New Zealanders not wanting to be tenants in their own land or not wanting to serve lattes to foreign owners who come to places like Central Otago or Northland. I was one of those waitresses serving lattes to foreigners several years ago and it is a great way for ordinary Kiwis to recapitalise and get some money in their bank balances. Those people bring money to this country—[ 
Interruption 
] He is up there hiding behind the yellow boxes. 
It is a good way to increase ordinary people’s wealth. Is there not something of the drawbridge mentality in this attitude? “I’m here pull up the drawbridge and don’t let anybody else come in.” If we were consistent about this we would say that no white people could buy land in this country. We are all foreigners if we take the tangata whenua attitude and philosophy that Maori were the first people to occupy this land so they are the true tangata whenua. Then all of us could go the whole Fiji way could we not? I am not advocating that; I am just pointing out the inconsistencies in some of those arguments and the fact that it is very dangerous to start going down that road and saying what is good or not good. 
The issue of Young Nicks Head came up. Sure that was something that people felt very strongly about there were protests and it was on television every night but we cannot pass legislation every time some minority group decides it does not want a piece of land sold. There was nothing to stop those people who were protesting about the sale of that land forming a company or a cooperative getting a loan and purchasing the land themselves. They were not barred from owning it. 
We have to look at the issue of the marginal strip which we will obviously deal with further in the Committee stage. If one is a foreigner and buying a piece of land for squillions of dollars it will be a condition of consent that the Minister might say: “Well you give us that marginal strip and you can buy it.”—as I understand it that is how it will be if the Supplementary Order Paper goes through—and if the purchaser is paying a lot of money for it then he or she will probably agree. Why is a foreigner paying a lot of money for that land and protecting that marginal strip any different from a New Zealander paying a lot of money for it? As I understand it a New Zealander will not have to go through that same process. A New Zealander could actually buy it lock stock and barrel. 
Hon Dr Michael Cullen 
: There’s no consent process for New Zealanders at all. 
DEBORAH CODDINGTON 
: There is no consent process at all. 
If the marginal strip is so valuable and is such an asset surely it is an asset regardless of who the purchaser is or what he or she is paying. That is something I do not understand and I hope that someone else can throw some light on that because if we are to have that for a foreign person buying it then surely we have to have it for a New Zealander buying it as well. 
I will get back to the issue of foreign ownership. Someone—I cannot remember who the speaker was—raised the issue of New Zealanders being very opposed to a number of overseas people who are not citizens of this country coming over here and buying our prime real estate. Before I came to the House I read through a number of the submissions. Some of them were extreme like those from the Campaign Against Foreign Control of Aotearoa which I suppose one has to admire. It has been around for a long time. But we have to look at the ethnicity of some of the people who started it; it goes back to the drawbridge mentality. 
In general the people who want to come here and buy land and who put a lot of money into it are people who are attracted to this country because of those Kiwi assets if you like—the wild open spaces the rivers the lakes and the seabed. They are escaping what they came from. There is no evidence that foreign owners are in any way general or otherwise any worse owners of the land. They cannot put it on a ship and take it away with them. They can only keep investing in it. So ACT members are opposed to this bill. I think we are the only party in the House that is opposed to it but none the less we will stand on our strong principle of property rights and we will vote against it. 
ROD DONALD (Co-Leader—Green) 
: 
 It will not surprise anyone in this House least of all Dr Michael Cullen that the Green Party is opposed to this bill. 
Hon Dr Michael Cullen 
: Thank goodness! That’s a relief. 
ROD DONALD 
: I am glad it is a relief. Dr Cullen was worried I was going to turn round on this one. We were tempted to do so at one point actually because we are very keen on the marginal strips provisions that are contained in the bill. We disagree with the ACT party in that we do think it is appropriate for foreign investors to recognise how we do things down here—the fact that we value and treasure access to the outdoors—and that it is appropriate if a foreign investor is allowed to buy a significant piece of sensitive land beside a lake by the beach or adjoining a river to provide a marginal strip giving Kiwis access to that public open space. So at the Finance and Expenditure Committee we were very keen to support the amendments initiated by the Labour member for Otago David Parker. 
Therefore when United Future pulled the plug on those amendments by threatening to withdraw support for the bill if it did not provide for compensation for foreign landowners we gave serious consideration to supporting it at least at the second reading stage just because we think the provision of marginal strips is a positive element. But at the end of the day we decided that the bill is so bad in so many other respects that we could not bring ourselves to back it. We are extremely disappointed that United Future - Outdoor Recreation NZ has put compensation for foreign investors ahead of access to the great outdoors for Kiwi recreationalists. I think there is an inherent contradiction within United Future when it claims to be the sensible environmental party then pulls the rug out from under the very people it claims to represent. 
I turn to the bill in its broadest sense. It is a giant con job. There is no doubt about that. When Dr Cullen announced in November 2003 that he was conducting a first principles review of the Overseas Investment Act everyone knew what lay behind that smokescreen. He said that he wanted to provide greater protection from foreign ownership for iconic sites of historical cultural or environmental interest but it was clear that he would use the facade of providing that protection to sell off the buildings and businesses associated with such iconic pieces of land. That has come to pass with this piece of legislation. It is remarkably cheeky to put in the purpose clause the comment that the legislation is all about acknowledging that it is a privilege for overseas persons to own or control sensitive New Zealand assets then proceed to make it even easier for foreign investors to gobble up more of our economy and to allow not just more of our land but also more of our businesses and central business district buildings to be taken over by foreign investors. 
I would like to spend a couple of minutes pointing out that there are some good provisions in this bill and that the Green Party is grateful for them. We hope we will not see the arrival of a Supplementary Order Paper to remove these good provisions after I highlight them to the Minister. It is good to see a tightening of the monitoring regime in addition to what was already in the bill. That is a positive step. It is good to see an expansion of clause 18 to incorporate introduced wildlife alongside the provisions that are already there for indigenous wildlife. It was good to hear Government members of the select committee recognise that Treasury officials are very much on the side of foreign investors and international organisations like the World Trade Organization rather than batting for Kiwi battlers when it comes to placing appropriate controls on foreign investors. 
But this bill falls way short of the recommendations the Finance and Expenditure Committee came up with back in 2001 when we comprehensively reviewed the Overseas Investment Commission. We looked particularly at the activities of the commission in relation to the Southland Plantation Forest Co. investment and we found that the commission had fallen down badly. At best the commission claimed there would be a net marginal gain in employment as a result of the approvals it gave that led to a lot of farmland in Southland being taken over by a Japanese forestry company. But at worst we have seen a community torn apart which is why Labour members and I recommended jointly that an additional commissioner be appointed to represent the wider community and that the application of the national interest criteria be extended to all proposals not just land proposals. We can see the merit of that when we look at clause 18 of the bill. While that clause is appropriate for land it is even more appropriate for business propositions yet businesses have to pass only a good character test. So it would be sensible to extend the bill to cover all sensitive assets not just land. That will be dealt with in one of a number of amendments that we will put forward. 
We will put forward also an amendment on another issue that was highlighted by the Labour and Green select committee members back in 2001 when we agreed that the current $50 million threshold should be revised downwards. I would like to acknowledge my New Zealand First colleagues at the time for supporting the Green position that the threshold should be reduced to $10 million. That was the threshold just before the 1999 election. Mr Bolger lifted it to $50 million by sleight of hand and this Labour Government has enshrined that in the closer economic partnership agreement with Singapore. The threshold is going in the wrong direction with this bill which lifts it to $100 million. We want to take it back to $10 million. 
We—the Labour and Green select committee members—wanted the Overseas Investment Commission to consider the impact on social well-being environmental sustainability and economic sovereignty when considering an investment in New Zealand and I do not think this bill provides for that. Also we wanted a code of corporate responsibility to be introduced. I concede that the bill does now contain a definition of “good character” which is a step forward but it does not go as far as a code of corporate responsibility. The national interest test should be expanded to ensure that any investment is compatible with Treaty of Waitangi obligations a consideration that is completely absent from this bill. So instead of going forward and adopting in legislation the recommendations of the 2001 review this bill has gone backwards. It has ignored the petition of over 7000 New Zealanders calling for tighter controls on foreign investment. 
I would like to make it clear—particularly to the ACT member who perhaps tried to imply that some of us who oppose this bill are against foreigners—that the Greens are not against foreigners. We are more than happy for people of foreign descent to make New Zealand their home but if they want a slice of heaven they should have to make a commitment to this country. Almost half of our candidates in this year’s election were born overseas so we are not anti-foreigner; what we are is very pro - New Zealand. 
So we say no to land sales to foreign investors whether they are corporate or individual and we say that business investments must be greenfield investments. They must add value to our economy not subtract value from it. That has been the problem. Foreigners have taken over Tranz Rail Telecom Air New Zealand and Powerco. Many former central and local government assets have fallen into foreign hands. We have all seen the results of those takeovers yet this bill is appallingly weak when it comes to scrutinising such investments. 
I will put forward some amendments to strengthen the bill so that it genuinely allows only foreign investments that are in the best interests of New Zealand—because that is what we need. We do not want our net national debt to grow any larger than the $123 billion that it is at the moment. We do not want to be paying any more interest or dividends on foreign investment. For the year to December $8.9 billion was the balance on income because of the high level of foreign investment. We need to make our economy more self-reliant and sustainable. 
GORDON COPELAND (United Future) 
: 
 I rise to speak on the second reading of the Overseas Investment Bill which I think is a good bill. Probably it strikes a fair balance between New Zealand’s need for overseas capital on the one hand and the protection of sensitive land sales to people who have no intention of becoming New Zealand residents on the other hand. However as is well known in the House a degree of controversy arose around the amendments proposed to the original bill by David Parker the member for Otago and a member of the Labour Party. Those amendments aimed to introduce marginal strips alongside rivers and lakes when land is sold to people who are not New Zealanders and who have no plans to become New Zealand residents—in other words to people who are merely part-time or visiting landowners. 
I want to make it clear that United Future supports the creation of marginal strips in those circumstances and I thank David Parker for raising the issue. Unfortunately however there was a fly in the ointment—quite a small fly but a very very important and significant one—and that was the specific provision in the bill that no compensation is payable to any person in exchange for the marginal strips. That is a very very serious departure and from our point of view an unacceptable departure from the common law tradition going right back to Magna Carta that has always held there should be no confiscation without compensation. United Future was not prepared to live with a precedent of that sort in any New Zealand legislation. 
The timing of this bill was extremely interesting because while the Finance and Expenditure Committee was debating the question of no compensation my member’s bill—a bill amending the New Zealand Bill of Rights Act 1990 to provide for property rights in the New Zealand Bill of Rights Act and specifically stating that no one was to be deprived of the use and enjoyment of his or her own property without just compensation—was drawn from the ballot. That was one factor. But there is another factor as well of course and that is that the Government has announced its intention to proceed down the road not only of requiring marginal strips when sensitive land is sold to overseas persons but indeed of requiring marginal strips from other New Zealand owners as well regardless of whether they intend to sell their property to a New Zealander or to an overseas person and regardless of whether they intend to sell their property at all. 
I think the whole nation is aware that this is an enormously controversial matter—so controversial that we have farmers in this country pledging to go to jail if land is to be removed from them without compensation. I have had delegations from Federated Farmers in Marlborough on that issue and they were good enough to read out a statement I sent to their recent regional conference. A huge group of landowners in Waitakere City have approached me and literally hundreds of farmers in the King Country and in the Waikato have all raised this issue with me. So the timing of legislation that has come to the House with a bland statement that no compensation is payable really could not have been worse. 
But in one sense perhaps it is good that it did coincide with those other events that I mentioned because it did—certainly for United Future—give us pause to really consider whether we wanted to support this legislation. I will probably talk a bit more about that in the Committee stage. 
Quite apart from the issue I mentioned on reflection I believe that it was actually unwise and unnecessary for the Government to try to force the issue of no compensation. I think that the situation that has now arisen whereby the Government has signified that it will introduce a Supplementary Order Paper in the Committee to take out the provisions about marginal strips from the bill and rather deal with that matter during the consents process is probably the right answer. I say that because I think that during negotiations on a case by case basis it is likely that many New Zealand landowners selling sensitive land to overseas residents will actually be quite willing to allow the marginal strip to be created because they will be getting a price from the overseas purchaser higher than they can get from a New Zealand purchaser. 
In that situation therefore they have every financial incentive to agree to a marginal strip and so we neatly avoid entirely the question of taking that strip without compensation. It can be done by mutual agreement. United Future believes that that is the preferred way forward so we are very very pleased that the bill has been amended to take into account our considerations in that regard. We will therefore be supporting this bill. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I am pleased to take a short call in this debate to support my colleague the Hon Judith Tizard who moved the second reading of the bill. I wish to speak on it at just a philosophical level rather than a detailed one and light upon one small matter. 
It seems quite clear to me that we need balance in these matters particularly in relation to sensitive lands. There are concerns about excessive amounts of sensitive land passing into foreign ownership but as soon as one tries to legislate that pretty well all land cannot be taken into foreign ownership or requires some enormously complicated process in order to approve it then we make it almost impossible for a very wide range of economic development to occur within New Zealand. 
This country has always relied upon substantial amounts of foreign capital for its development. Until we lift our savings rates to a very very very much higher level than at present that will remain the case. Certainly I suggest gently to my Green colleagues that if they want to be so much in favour of New Zealand ownership and of the lifting of savings rates then they should at least begin by supporting the New Zealand Superannuation Fund instead of opposing that part of a long-term sustainable policy based upon savings that accumulated from New Zealanders. 
 The second point I would make in that respect is that land does not go away simply because somebody has bought it. In fact it is far easier to buy a factory and remove it from New Zealand than it is to buy a high-country sheep farm and remove it from New Zealand. It is very difficult to move a high-country sheep farm to some foreign country. The land does endure in a way that other economic assets do not endure. So it is important that in this bill we provide mechanisms to consider quite specifically issues around access and so on as part of the consideration of approval for foreign purchase of New Zealand land. 
I might say in that regard that the purchase of Young Nick’s Head for example turned out to be better than if the previous absentee New Zealand owner had remained there. It was a deteriorating farm with no access for New Zealanders no Government ownership of the most sensitive part of the land and a very unclear relationship in terms of the rights of local Maori to look after certain parts of that land. The new owner Mr Griffin has provided a much more satisfactory relationship. The land purchase by Shania Twain caused a great deal of interest in Otago and we were able to gain some important concessions in terms of completing a track through the South Island. 
Peter Brown 
: She’s going to sing at the Labour Party conference. 
Hon Dr MICHAEL CULLEN 
: Of course Mr Brown speaking with that perfect North London accent as he does will stand up for the rights of native New Zealanders in these respects without a single conscious thought that this might involve an “h” word that we are not allowed to say within this Chamber. 
I welcome the fact that the National Party will support this bill after the amendment is moved to remove the marginal strips provisions. [ 
Interruption 
] But I would gently say to Ms Wong before she goes much further that it was her own colleague Dr Nick Smith not to be confused with Young Nick’s Head who introduced a member’s bill to provide for the compulsory acquisition of marginal strips without compensation which the National Party voted for and sent to a select committee. Now the National Party says in this bill that to act in that manner fails to recognise the foundation of our society. It is not something relatively minor; it is the foundation of our society! Ms Wong is telling us that Dr Nick Smith ignores the foundation of our society in terms of his— 
Pansy Wong 
: He does. 
Hon Dr MICHAEL CULLEN 
: He does does he? 
Pansy Wong 
: Who put that in the bill? 
Hon Dr MICHAEL CULLEN 
: I think he put that in the bill. Dr Nick Smith is the person who I think put that in the bill without any doubt at all because it was a bill in his name. The bill states “Dr Nick Smith” at the top of it which is usually a subtle hint for the careful reader that that is the person who put that in the bill. 
I am pleased that the National Party has done a U-turn on this. I predicted it would when Dr Smith’s bill was sent to a select committee. I am grateful for the support of United Future. I recognise that there has been an issue of principle for them in this bill which is why we have removed those provisions. I am grateful for the support of the National Party. I am baffled I have to say by the ACT party’s position on this which seems to be totally open slather but when a party is sitting on a proud 2 percent and going downwards it can be very free and easy with its principles. When one is a retiring member of a party that is sitting on 2 percent and going downwards that member can be even freer and easier with his or her principles because there is not really a lot to lose at that stage in life. 
I look forward to the Committee stage. The Government will be voting against all the amendments moved by Mr Rod Donald and we hope for support from both the National Party and United Future in that respect. 
PANSY WONG (National) 
: 
 I will take up just two points made by Dr Michael Cullen the Minister of Finance of New Zealand. Firstly if Dr Cullen is so concerned about New Zealanders not saving I challenge him to give them a generous tax cut to enable them to save. A tax cut of 67c per week in 3 years’ time will not help most New Zealanders save up to buy even a piece of brick in Auckland—if they live in Auckland. Secondly I fail to see how Dr Nick Smith can be connected to this Overseas Investment Bill which is labelled as a Government bill and into which Labour member David Parker introduced the creation of compulsory marginal strips without compensation. I hope Labour takes some responsibility for that. After all this is a Government bill. 
National supported the Overseas Investment Bill at its first reading and its referral to the Finance and Expenditure Committee because we also believe in striking a balance between the benefits derived from overseas investment and the public’s desire to maintain the long-established New Zealand practice of providing public access for outdoor recreational activities. 
But the vast majority of submissions including the 8000-signature petition that we received and heard during the select committee process were against the bill. This reflects the public perception after a number of high-profile cases of the failure of the Overseas Investment Commission in following up and enforcing the obligations of overseas investors to fulfil their conditions of purchase. This perception of lack of enforcement led to calls from many submitters and signatories to restrict or ban overseas investment. But we should distinguish enforcement and undesirable conduct from banning overseas investment per se. 
The main enforcement agency which has been the Overseas Investment Commission argued that it lacked the tools to take effective enforcement action when some overseas investors failed to meet the purchase conditions. One has to wonder why it has taken this agency so long to seek additional tools to carry out its work effectively. During the select committee process all the members of the committee from all sides of the House shared the sentiment that we are more in touch with the public. All the members of the select committee urged the agencies to be more proactive in monitoring purchase conditions and enforcing the law when those conditions are breached. I imagine that unless a more proactive approach is taken by enforcement agencies to improving negative public perceptions antagonism towards overseas investment will not be lessened. 
National supports the tougher enforcement provisions contained in the bill and we will keep a very watchful eye on the new enforcement agency to ensure that it does enforce the law. The administration of the overseas investment portfolio was undertaken by the Reserve Bank in the past and has now shifted to Land Information New Zealand. We certainly would like to see that as a signal that more proactive enforcement action will be taken. 
We realised that it must be election year when suddenly the largely cooperative atmosphere in the select committee took a new turn. Suddenly we had to take a lot more time because David Parker brought in a change. He must have thought it would be an election year winner for him. His action must have had the endorsement of his Labour colleagues. Mr David Parker insisted that marginal strips must be created on sensitive land adjacent to rivers lakes and the foreshore. 
Brian Connell 
: You could pay compensation for that. 
PANSY WONG 
: No it gets worse. The select committee spent a lot of time investigating whether this late addition was within the scope of the bill whether it was in contravention of New Zealand’s international agreements and whether it was workable. Ten pages were added to this bill. It became worse when we realised that Mr David Parker wanted the marginal strips to be created for no compensation. I do not know where he studied economics or finance. He argued that that provision would not affect the price obtained by the seller. 
Gordon Copeland 
: He’s a lawyer. 
PANSY WONG 
: Ah lawyers! That explains it. Taking land away to create marginal strips would affect the price that sellers could obtain for their land. Any person of sense could tell us that the sale price must be affected. So at that point National changed its stance. Even though we supported the bill at its first reading we could not support it at the deliberation stage of the select committee because the expropriation of property without compensation is a fundamental infringement. 
How could the bill contain such an unacceptable provision but still pass through the select committee and return to the House for a second reading? I think another party has woken up to the fact that this is election year. United Future registered a small protest during the select committee stage to the effect that it found the provision to create marginal strips without compensation bad—but it was not bad enough to make United Future say it would not support the bill. If United Future had decided to oppose it at that stage those provisions would not be contained in the bill we are now debating. 
National gave United Future a hard time. We asked how that party could say it has principles and how it could put up a weak protest but support the bill—and then we suddenly realised that it must be because this is election year. We understood that a closed-door negotiation had been conducted. United Future is the only party that supported Labour in getting the bill through the select committee stage. We can tell it is election year. 
We have a lot of questions to ask David Parker. Will he abstain from voting on the bill? Will he vote against it when the Supplementary Order Paper we have been told about is introduced to remove the marginal strip provision? So I am looking forward to examining this bill in detail to learn what the Otago MP will do. He is facing a stiff challenge from our brilliant Otago candidate. She will give David Parker a hard time. 
Brian Connell 
: He’s gone. 
PANSY WONG 
: His provision is gone and the next thing left is for him to go unless he can show his constituents that he will stand up for their interests. I presume that is why he introduced that provision. He has to explain to them why he is backing off from his amendments to the bill. National is looking forward to that part of the debate and to examining the Supplementary Order Paper that will remove the compulsory acquisition of marginal strips without compensation. 
MARK PECK (Labour—Invercargill) 
: 
 The National whips have played three extraordinarily cruel hoaxes on Pansy Wong. The first is that they forgot to tell her she is voting for the bill. The second is that they forgot to tell her that the tax cuts National is promising will not really be tax cuts. The third escapes me for now. I think it had something to do with whether there is lunch in the box. They were cruel hoaxes indeed and I felt sorry for the member being so badly treated in that respect. 
The Overseas Investment Bill is quite an important bill because it seeks to do a couple of very important things. First of all it seeks to protect the interests of New Zealanders in terms of their access to waterways and their enjoyment of what we see as our birthright the Queen’s Chain. But at the same time it seeks to encourage overseas investment. One of the reasons it does that is that we rely on overseas investment for our economic prosperity. Pansy Wong and others who have expressed such moral outrage in this debate have forgotten that until we get ourselves as a nation into a situation of being good savers we will rely on overseas investment for much of our prosperity. It is as simple as that. For Pansy Wong and others to stand in this House and say that giving people a tax cut will encourage savings is just so much cant. It simply is not true. 
Darren Hughes 
: It’s baloney! 
MARK PECK 
: As the honourable member for Otaki says it is baloney. It just will not happen. Indeed as everybody in this House knows any signalling of major tax cuts will be met by the response of the Governor of the Reserve Bank putting interest rates up in order to dampen down demand so that inflation remains under control. Anybody with a skerrick of economic understanding knows that. Even John Key knows it. He was the one who said to Don Brash that he cannot introduce tax cuts in a mini-Budget after Christmas; it will take 9 years. National has ramped up the expectations of the public that there will be huge tax cuts when we know irrespective of the issues— 
Deborah Coddington 
: I raise a point of order Madam Speaker. I thought we were debating the Overseas Investment Bill. 
Madam SPEAKER 
: Yes that is a good point. Would the member please stick to the bill. 
MARK PECK 
: I think I have made my point about the economic contribution of overseas investment but I do wish to raise another point about the need to do something through this bill to protect the interests of New Zealanders. At the same time as we are doing that we see the orange ribbon campaign going on. I find that quite fascinating. I am getting the wind-up from the whip; I think he wants me to do a better job of this. Those who have raised that issue cannot have it both ways. They cannot say that we cannot provide access over land to the marginal strips and at the same time say that we need overseas investment as well. There are some fascinating issues in this debate but I will take the whip’s advice and let others who wish to contribute to it do so. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I think Labour played a bit of a cruel hoax on that member. It did not advise him which bill was on the Order Paper. New Zealand is a low-wage economy on a worldwide scale. 
Mark Peck 
: I blame the poms for that. 
PETER BROWN 
: The member makes a joke of it. I know the Government thinks it will have addressed the situation by 2008 when it will give low-paid people 67c a week extra but I can tell the member that that is not enough. 
Craig McNair 
: A stick of gum. 
PETER BROWN 
: That is about all it is worth. New Zealand is a low-wage economy. The ACT members and some of the other members who have spoken want to put New Zealand up for sale with a line at the bottom of the advertisement saying: “Going cheaply.” 
Craig McNair 
: Flog it off. 
PETER BROWN 
: They want to flog it off to everybody. I know that Deborah Coddington and the Hon Michael Cullen stated that land sold to overseas investors does not go away—cannot be taken away. I tell honourable members that as far as the average New Zealander is concerned it most certainly can be. It might as well be at the other end of the world because they cannot afford it. If we open this country to buyers worldwide and say that anything and everything is for sale so they should come here with their money then the average New Zealander will never get anywhere. If the members on the Government benches do not understand how difficult it is for people to buy their first home then they should go out and talk to some of the average New Zealanders who are trying to do that. Or if they do not understand how hard it is for a young farmer to get a farm then they should go and talk to some of those guys who are suffering. John Key is a multimillionaire  
Sunday 
 told us. 
John Key 
: Don’t believe everything you saw on that programme. 
PETER BROWN 
: The member has a big flash house in Parnell and a beach house that most of us here would die for. He would not have those assets had he not gone overseas to work for them. He would not have attained them on the pay scales in this country no matter how good he is at his job. Just for the record Mr Key is nodding in total agreement. I cannot think of one profession or one trade in which a person would not be better off working overseas—not one. [ 
Interruption 
] Is the member giving me one? 
John Key 
: Graeme Hart—he’s worth about $1.5 billion. 
PETER BROWN 
: Where is he living? 
John Key 
: He lives in St Heliers. 
PETER BROWN 
: That is the one exception. 
Brian Connell 
: Douglas Myers is another one. 
PETER BROWN 
: Madam Speaker this is difficult enough without these fellows— 
Madam SPEAKER 
: Yes it is difficult enough. Could we please stick to the bill. 
Simon Power 
: I raise a point of order Madam Speaker. I appreciate that we are in urgency and that things move along in a reasonably convivial way but if the New Zealand First member personalises the debate in a way that involves Mr Key’s non-parliamentary life then he can expect some interjection from those in Mr Key’s party who sit around him. 
Madam SPEAKER 
: I take the member’s point. I thought there was an element of camaraderie there—obviously I was mistaken. It was getting out of control. Let us get back to the purpose of the bill. No humour is required at this stage—members should just address the bill. 
PETER BROWN 
: As I recall Mr Key made reference to his own circumstances in his own speech and I think he took what I said with good humour. If we open the door for anybody to come here to buy anything then we encourage young New Zealanders to go overseas to earn the big bikkies needed to come back and buy the country. 
New Zealand First unashamedly believes that there should be some restrictions on overseas investment in this country. We will not get mixed up like ACT members and confuse that with people who come here with their money on a permanent basis determined to settle here invest here and play a positive part in the economic and social well-being of the country. We are not confusing overseas investors with immigrants who come here and make a commitment to this country. The ACT member seemed to get quite confused when illustrating that point. 
The Greens have produced a Supplementary Order Paper much of which on the surface New Zealand First supports. We have not had a chance to examine it in detail or to discuss it in caucus but the Greens make some points that sit comfortably with New Zealand First particularly in respect of the purpose clause. The Supplementary Order Paper enlarges the purpose clause basically by adding clause 3(b): “Any ownership or control must be in the national interest for the long term benefit of New Zealanders.” We think that that is a fairly level-headed approach. The Supplementary Order Paper further adds clause 3(c): “Public participation in decisions about overseas investment will be encouraged.” I tell Mr Donald that New Zealand First will support that also. 
I regret to say that we have not had a chance to examine the rest of the Supplementary Order Paper in detail and therefore have been unable to discuss it as a caucus. I notice that the amendment to insert clause 18(2)(g)(i) relates to: “provisions made for settlements to claims made under the Treaty of Waitangi including return of land;” and that part of that clause refers to the principles of the Treaty of Waitangi. That puts us on our guard. But we will support the amendment to the purpose clause because we think that the Greens have enlarged it to reflect what most New Zealanders feel about overseas investment. 
I conclude by drawing the House’s attention to the fact that very recently a football club in the UK namely Manchester United was sold in large part to some Americans. There was just about uproar in Manchester. Manchester United is still going. The team is still playing soccer as far as I know. It has not been moved out of the country—it is still there. The players still play in red and white. It still has Wayne Rooney and all the stars. But the Manchester United fans created uproar. The Government wants to do something like that to this country. It wants to do to New Zealand what has been done to the Manchester United Football Club. It is saying that it will do that to New Zealand—so does it not expect some passion and concern out there? I say to the Government that it is wrong. Can Government members tell me what gain was obtained for the country and for the average New Zealander by the sale of $16 billion worth of assets under Labour and National in the 1980s and 1990s? They should tell me that. 
Hon David Cunliffe 
: What have the Romans done for us? 
PETER BROWN 
: The member thinks it is a joke. He did not think it was a joke when he had to buy back Air New Zealand a couple of years ago. He did not think it was a joke when the Government had to buy back Tranz Rail after the average New Zealander had been promised a first-class railway system. If the Government has not learnt the lesson of selling things cheaply then it should have done so by now. 
New Zealand First is a political party founded on the principle that first and foremost it will look after New Zealanders and this country. [ 
Interruption 
] The member over there makes a noise but if he thought a little more deeply about what the people in Otaki think about this he might have a different view. Maybe he should go out and ask them whether they want overseas investment. Oh no that would be getting too close to the coalface. The Minister is shaking his head. 
This bill will get through because the good old boys of politics in this country National and Labour will combine. They will put up a sign saying that this country is for sale and going cheaply and that buyers should come and talk to Michael Cullen and John Key. New Zealand First opposes this bill. 
A party vote was called for on the question  
That the amendments recommended by the Finance and Expenditure Committee by majority be agreed to 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 54 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7; Green Party 7; Maori Party 1. 
Amendments agreed to. 
A party vote was called for on the question  
That the Overseas Investment Bill be now read a second time 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 54 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7; Green Party 7; Maori Party 1. 
Bill read a second time. 
Instruction to Committee 
Hon PAUL SWAIN (Minister of Labour) 
: 
I move  
That it be an instruction to the Committee of the whole House on the Overseas Investment Bill that it take the bill part by part 
. 
Motion agreed to. 
In Committee 
Part 1Preliminary provisions 
JOHN KEY (National—Helensville) 
: 
 We are up to the interesting bit now the Committee stage debate on the Overseas Investment Bill. We know from the speeches on the second reading where the divisions in Parliament on this bill lie. I want to make particular reference to clause 4 “Overview”. Clause 4(1)(b)(i) talks about subpart 1 of Part 2. At the Finance and Expenditure Committee David Parker on behalf of the Labour Government inserted into this subparagraph the words— 
Simon Power 
: I raise a point of order Madam Chairperson. I am sorry to interrupt my colleague but in the time since we have started this debate the Minister has not been in the chair. He has just returned to it now. I ask that we get some kind of discipline around Ministers’ seating arrangements while we are in Committee. 
The CHAIRPERSON (Ann Hartley) 
: I apologise. The Minister will stay in the chair. 
JOHN KEY 
: Sadly that is the position the Minister feels he will be in regarding the position of Minister of Finance as well—a chair was so close to him but in a few months’ time the opportunity will be gone and never will he manage to position his bottom on the Minister of Finance’s chair. What a tragedy. Let me go back—[ 
Interruption 
] Well it will be anyone— 
Darren Hughes 
: Does he think he will get the job? Don Brash will give that away. 
JOHN KEY 
: If he does and it is for the good of the country I shall welcome and support the incumbent person. I shall support that decision fully because the National Party believes in what is good for the country not what is good for Labour. That is why Darren Hughes will be so firmly rejected when the election takes place. But let me digress no more; I will go back to the Overseas Investment Bill. 
I want to talk about the addition to subpart 1 of Part 2 in clause 4(1)(b)(i) that was imposed by David Parker on behalf of the Labour Government during the select committee process. The additional words state that subpart 1: “imposes a statutory marginal strip condition for certain overseas investments in sensitive land:”. That clause originally included the words following on from those I have just quoted “for adequate and fair compensation”. The National Party would have supported that—[ 
Interruption 
] Well we would have discussed those words—“for adequate and fair compensation”. I suspect that the National Party finance spokesperson may have had some concerns about the costs of that compensation. But putting that to one side we would have supported the inclusion of the words “for adequate and fair compensation”. Those words were not added. One is left with the feeling that that clause is nothing short of a grab of a property right—nothing short of the view of a Government that cannot quite differentiate between— 
The CHAIRPERSON (Ann Hartley) 
: Can I just clarify that we are talking about Part 1. 
JOHN KEY 
: Absolutely—Part 1 clause 4(1). Madam Chair were you not listening to my speech intently? I think it is one of the better ones I have delivered in Parliament so far—and Mr Cunliffe is nodding his head. 
Let me go back to clause 4(1)(b)(i) which talks about imposing a statutory marginal strip condition for certain overseas investments in sensitive land. [ 
Interruption 
] Yes that is right. We know that because the words “for fair and reasonable compensation” were not added this measure will fail. Unlike the Labour Government we understand property rights. We understand the definition as being that if something one owns in one’s own name is taken from one—“involuntarily acquired” is the term—there must be compensation. 
Clearly the Labour caucus voted for the wording that is in the bill. I understand Mr Parker’s reasons for doing so. He had some local reasons. He is under a lot of pressure in his seat of Otago. I understand that. I have been down there. I got the same reaction in Otago as I got when I was in Otaki the other day. In Otaki I asked what people thought of the local member Darren Hughes and they had never heard of the bloke. That is how they put it: “Never heard of the bloke.” I asked whether he was the guy cleaning out the back of the chicken farm that I was visiting and they said: “No I don’t think so; I think he’s in Wellington.” I got the same sort of reaction in Otago. 
I understand that we are in a political environment and that Mr Parker has a lot of high-country stations in his electorate. [ 
Interruption 
] Yes he has to get it pumped up in the  
Otago Daily Times  
that up here in Wellington he is not just sipping lattes served by Deborah Coddington; he has to do something when he is up here. So sure enough he thought that if he put this provision in the bill it would be really popular. I guess it would not be popular with those who are selling but it would be popular with some anyway. That is why Mr Parker did it. We saw the true colours of the Labour Government which really does not believe in anyone’s property rights or anyone’s ability to earn anything in his or her own name when Labour members happily followed the Pied Piper Mr Parker and voted for the inclusion of that provision. That was fair enough except that when they came to Parliament they could not get even the Greens to agree with it. That is how sad it was. [ 
Interruption 
] My friend Mr Donald is looking across and saying “maybe”. The Government is in an unbelievable situation. 
DAVID PARKER (Labour—Otago) 
: 
 The reason we cannot get support to pass this rather moderate provision relating to the compulsory creation of marginal strips as a precondition of the sale of rural land to foreign people is that New Zealand First and the Greens oppose it because they favour a total ban on the sale of rural land to foreigners. So it is not because they disagree with our more limited position that they oppose this provision. 
I say to the member who just spoke that Labour does oppose confiscation of property rights without compensation but the point here is what the property right is. Does a property right in rural land in New Zealand include the unrestricted right to sell to an overseas person? Is it wrong in law for the Government to say that it will not allow rural land adjacent to the foreshore a river or a lake to be sold to an overseas person unless a marginal strip is reserved? It is not. Until 1995 the Land Settlement Promotion and Land Acquisition Act made it absolutely clear that there was an almost total prohibition on the sale of rural land to foreigners—sale of land was not merely subject to a condition about marginal strips; it was totally prohibited. Against that background it is wrong to suggest that a private property right includes the unrestricted right to sell overseas. 
Mr Key is saying that the public’s right to control through the Government the sale of land to overseas persons and to control access to our waterways ought to be transferred from the public to the private. At the moment the position at law is quite clear given our history that private property rights do not include the unrestricted right to sell rural land to overseas people. The argument John Key the National Party and ACT put to the contrary is wrong in principle. 
They are asking the wrong question. They say it is wrong to confiscate a property right. We agree. But the question is what property right is being confiscated here. If a property right in rural land has not historically in New Zealand included the right to sell to overseas people giving people the right to sell to overseas people subject to a precondition of laying off a marginal strip is not confiscating anything. No one is forced to sell to an overseas person. If a person wants to have the privilege of doing so it is within the jurisdiction of this Parliament to say quite properly that as a precondition to that permission we will reserve a marginal strip. 
I make one final point. It is absolutely inconsistent to say that one can control public rights of access across the foreshore vis-à-vis Maori claims to interest in the foreshore and then within 1 year come to Parliament and say: “Notwithstanding our high and mighty principles on the foreshore we will have a different rule when it comes to New Zealanders selling to overseas people.” There is a word for that which I am not allowed to use in this Parliament. 
We cannot get those provisions through. We have other good improvements in the bill relating to controls on sales to overseas people which will go a long way to achieving a similar outcome but it is very important that the underlying principle here be unpicked a little. When people say that private property rights should not be confiscated they are right but people need to take great care in what they define as the private property right. If people do not take care they are in effect changing current baselines to privatise what are existing public rights. To do that in a world of globalisation and of concentrations of wealth in certain parts of our world is to threaten the birthrights of New Zealanders to access waterways. 
ROD DONALD (Co-Leader—Green) 
: 
 I raise a point of order Madam Chairperson. I did not want to interrupt the member particularly because I agreed with most of what he was saying but I suggest that we follow a logical sequence here. Part 1 does not have any reference to the marginal strips as far as I can see. If we can get Part 1 out of the way—because it is a relatively small part and I intend to take only one call—then we can have a much more wide-ranging debate on Part 2 where marginal strips are very much part of the debate. 
DAVID PARKER (Labour—Otago) 
: 
 Clause 4(1)(b)(i) speaks of imposing “statutory marginal strip condition for certain overseas investments in sensitive land:”. 
Simon Power 
: The Supplementary Order Paper refers to it as well. 
DAVID PARKER 
: The Supplementary Order Paper removes that provision. 
The CHAIRPERSON (Ann Hartley) 
: That is where I did get confused before. 
DEBORAH CODDINGTON (ACT) 
: 
 That was a great speech from “Michel Foucault”! The member said that property rights are whatever one decides they are and whatever anyone wants them to be. He is from the party that says: “We’ve got principles; what principles do you want to have today?” as they dive into their bag of all sorts of different principles. 
Property rights are absolute. They are not whatever one wants them to be. When that member goes on about people who have a property right not having the right to sell it to an overseas person that is absolute emotional claptrap because a property right means that a person has the right to sell a property to whomever he or she wants. I remind the member to read his history. Anyone who has read history might be aware of the Australian historian Geoffrey Blainey who wrote that in 1900 New Zealand had the highest standard of living in the world and had no restrictions on foreign investment. So David Parker is absolutely wrong when he goes on about what constitutes a property right and about the fact that it does not include the right to sell to whomever one needs. 
Foreign investors should be subject to the same rules as New Zealand investors. If those rules are wrong or they are being broken we need to look at them and ensure that everybody obeys them rather than tweaking them around to come up with all sorts of different definitions of what a sensitive asset is and who should be buying what. The member for New Zealand First who spoke before was going on about ACT and the National Party wanting to sell the whole of New Zealand to anybody who comes through the door. That is also a total misrepresentation of the truth. When has anybody said that? 
John Key 
: We didn’t say that did we? We were talking about lattes. 
DEBORAH CODDINGTON 
: No I am talking about New Zealand First. 
There are restrictions on anybody purchasing land in New Zealand. For a start one has to have the money to do so or the guarantee of the money from whoever is lending it. There are all sorts of laws and restrictions relating to the sale and purchase of land. The Minister of Finance Dr Cullen implied that legislation like this is necessary because New Zealanders have been led to believe through reading advertisements in an airline magazine for the sale of Poronui Station that the purchaser would have the right to the waterways. If we passed legislation every time some real estate agent came up with an over-hyped description of a piece of land or property that was for sale we would never get out of this place. I am still looking for a piece of Tuscany in Avondale. Are we going to pass laws saying that no New Zealanders should be led to believe that they will be able to buy a piece of land in Avondale? 
I come back also to the issue of overseas investment in significant business assets. Craig McNair dealt with that before when he talked about the fact that we should restrict investment in New Zealand businesses to New Zealanders because they are the only investors of good character. I remind that member of the wine-box inquiry which was brought into the House by his leader. Not one overseas company was involved in the wine-box inquiry and I wonder why that was. Well it is usually because people or companies that invest in a company a business or a corporation in another country are usually—I am not saying always but in the majority of cases—good corporate citizens. The mere fact that they are putting their money where their mouths are means that they will look at obeying the laws. That is what I mean when I say that if people do not obey the laws no matter who they are—whether they are foreigners or New Zealanders—that is when we should deal with it. We should not deal with it on the basis of the country where they live. 
I come back to the principle of property rights. It is all very well for Dr Michael Cullen to sneer at principles and to say that just because I personally am not coming back to Parliament I can afford to be fast and loose with principles. The ACT party is the one party—apart from the National Party—that is standing on principles and is debating this bill on the basis of principles. It comes back to the basic principle which I repeat to David Parker of whose land it is. Whose land is being sold here? What gives that member just because he has been elected to Parliament the right to breach property rights? 
CRAIG McNAIR (NZ First) 
: 
 I want to speak on Part 1 because of the issue that was raised by the Labour Government when it inserted clause 4(1)(b)— 
Brian Connell 
: I think it is termed the “steal clause”. 
CRAIG McNAIR 
: The member on this side of the House terms it the “steal clause”. This Government had a bill that allowed for the blatant flogging of New Zealand ownership to overseas interests. Only a few months out from an election all of a sudden Government members looked at themselves and said: “Oh my goodness! We have to do something that makes it look like we are being tough on foreign investors.” That is what they did; they sat around a table late at night thinking they had to do something about that in order to give people the impression that they were trying to be tough on foreign investors. That is what they did because they knew the sentiment out in the community. They knew that an overwhelming number of people gave submissions to the select committee in opposition to the bill. They knew the public sentiment on this bill so they thought they had to do something. They got their spin machine together they flew Mr Parker up from Otago early on a Monday—instead of having him come in on an early flight on Tuesday—they racked their brains and they thought of a way to spin some sort of explanation to the public to make it look like they were working in the best interests of the people. 
 Some people could call that clause the “David Parker amendment”. I was going to call it the “smokescreen amendment”. Or it could be called the “blatant electioneering clause” as well. The Government wanted to pop in an amendment that basically would allow foreigners to buy whatever they wanted but after they had done that it would take away their riparian rights. The Government would get rid of those rights if it wanted to in certain circumstances. Basically this is a poll-driven Government and if it thinks that the polls are telling it that people are not so approving of what it is doing then—nothing to do with conviction or anything—it will act purely on the polls. Its decision would be based on that alone. I think it is quite disgraceful that the Government has come out with an amendment that as I said is such a blatant electioneering clause. 
The Government has no conviction or passion about it. Labour has turned away from its principles. It signed up to the petition that went up and down New Zealand many years ago to stop foreign ownership of land and then it went totally against its principles which was proved by its $10 billion worth of sales of State-owned assets from 1984 to 1990. Allowing for inflation and the amount of assets those State-owned enterprises owned at the time they would be worth billions of dollars to the economy now. We have $10 billion a year going out of the country now just because of foreign ownership and this Government has allowed that to happen. The Government is obviously not concerned about it because it is letting it happen; it is continuing that kind of regime. It just does not give a stuff! But the Government expects us and the people of New Zealand to believe that it is trying to do something about the foreign ownership issue by popping in a clause like that by flying David Parker up from Otago on a Monday and by getting its spin machine together to spin out a bunch of lies to the public. That is what the Government is doing. 
Hon DAVID CUNLIFFE (Associate Minister of Finance) 
: 
 I am reluctant to take a call but I will take one quickly just to point out some of the inconsistencies in the submission by the previous speaker. He said that this Government lacks principle by bringing in a range of measures that provide some protection for sensitive land that is sought to be held by foreign investors. Well that is a bit rich because there is no lack of principle there. This Government has taken a very sensible moderate and balanced position on the one hand screening negative investment in sensitive and iconic land—and the Finance and Expenditure Committee has further developed the screening factors that will allow that—and on the other hand encouraging foreign investment and lowering compliance costs in areas where that is clearly in the net national interest to do so. That is the appropriate balance. 
Talk about a lack of principle—that member is from a party that when it gets out on the hustings rails against foreign investment and the country being flogged off overseas. Then its members come into this Committee and fail to support a sensible moderate amendment by my colleague that would protect an iconic space around riverbeds and marginal strips. Well they cannot have it both ways. Are they the defenders of the little guy or are they what they proved themselves to be last time—God forbid it happen again—they ever got near the Treasury benches: “… full of sound and fury Signifying nothing.”? 
ROD DONALD (Co-Leader—Green) 
: 
 That was rather an abrupt end to that speech but it was because I think David Cunliffe the Minister in the chair had run out of anything to say. It is very hard to defend this legislation particularly because it is a con job as I said in my second reading speech. It is a con job in a number of respects and I would like to focus particularly on the purpose clause to emphasise my point. 
Clause 3 “Purpose” is very cuddly-feely. It talks about it being “a privilege for overseas persons to own or control sensitive New Zealand assets”. It then states that that privilege will be acknowledged by requiring overseas investments in those assets to meet criteria for consent and by imposing conditions on consent. Then we have to go to the small print to see that while the purpose talks about assets the only real test will apply to sensitive land. There are b-all tests on anyone buying businesses other than a good character test so there is no expectation that a business buy-up will do anything other than tell us whether the person is supposedly of good character and there have been numerous examples of business buy-ups where the foreign purchaser has not been of good character. So as I said in my second reading speech if the Government is serious about overseas persons owning or controlling our sensitive assets being a privilege then it should give some teeth to that purpose. 
It has not; therefore the Green Party will endeavour to do what the Government has failed to do and will propose some amendments to the purpose clause. We will leave what is there as it stands because it goes part-way but we believe that it needs to be strengthened by making clear that any ownership or control must be in the national interest for the long-term benefits of New Zealanders. I ask the Government whether that is too much to expect of foreign investment legislation. If the Government does not support our amendment then in effect it is saying that it is happy for foreign investment not to be in our long-term interest and not to be for the benefit of New Zealanders. That is an indictment on a Labour Government. It is what one would expect of National if that party were in Government. Of course when National was in Government it did make it very easy for foreign investors to gobble up a lot of our strategic assets particularly State-owned assets. But for Labour to make that even easier under the smokescreen of saying that it is a privilege for overseas persons to own or control our sensitive assets is an indictment. 
The Government of course is doing this because it has an agenda and the agenda is very clear. The Government would dearly love a free-trade agreement with the United States of America and we know full well that it is high on the US shopping list that any restrictions on overseas investments be reduced or eliminated. The Government has locked itself into the General Agreement on Trade in Services (GATS) and I have to ask it whether it is just a coincidence that one of the major demands from our trading partners during the current GATS round is for New Zealand to scrap the Overseas Investment Commission. Clearly the Labour Government has done the bidding of our neighbours overseas—to the disadvantage of our own citizens—because the Government is scrapping the Overseas Investment Commission and transferring it to Land Information New Zealand. It will be even easier for foreign firms and individuals to buy up our land our buildings and our businesses and Labour is therefore doing exactly what those Governments representing multinational corporations that already own a fair chunk of New Zealand want it to do. 
So our other amendments to this part will tighten up the scrutiny on foreign investors by reducing the threshold from 25 percent ownership to 10 percent ownership. That actually brings us into line with the IMF the OECD and the United Nations Conference on Trade and Development in using 10 percent as a criterion for the standard international definition of foreign ownership. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
BRIAN CONNELL (National—Rakaia) 
: 
 When I took a call in the debate on the first reading of this bill I said that the National Party has no problem with the concept of foreigners pouring their hard-earned cash into New Zealand subject to certain rules of engagement. I went on to say that everyone wins: overseas investors get to live in Godzone and we get money for education and infrastructure. That is how citizens of New Zealand get to grow their wealth and that is the contribution that foreign capital makes to our economy. 
I was very much of that opinion when I came down to the House to talk on the second reading of this bill until I struck the “Mugabe clause”—the “Parker Pimpernel clause”. That is the clause that says—and this is from a rural member the member for Otago—it is OK to take people’s private property rights and it is OK to take the best part of their land and annex it without even offering compensation. The man’s true socialist agenda came pouring out and he is wearing it on his sleeve. He wonders why he will not be coming back to the House after the next election. Bye-bye Mr Parker. 
We should not be surprised that this is the type of thing the Government is doing. The same Government that is promoting this legislation is suggesting that the public can roam at will across private property. When Michael Cullen was on his feet he slapped a sneaky little left jab into my colleague Nick Smith—below the belt as is Michael Cullen’s way—by suggesting that this is the type of nonsense that the National Party would support. What he conveniently overlooked is that this is a Government bill sponsored by Michael Cullen and this sneaky nasty little clause is in the name of David Parker the soon to be former member of Parliament for Otago. But we should not be surprised because this is— 
Pansy Wong 
: Jacqui Dean is coming here. 
BRIAN CONNELL 
: Jacqui Dean is coming. I know her. She is working hard and knocking on a lot of doors in Otago and she will be here very soon. 
But we should not be surprised that this Government would embark on this type of rhetoric. I was at a public meeting in Timaru where the Minister of Agriculture—a Minister of the Crown—got up and in a public forum said that the annexing of private property can be justified in the public good. That is the sort of thing one would expect to hear from the leaders of some Central African countries. But to hear it from someone in the New Zealand Government who represents the Crown is simply unsatisfactory and not acceptable. 
It is all right for people like Mr Parker to say: “This land is everyone’s. We’ll put a value to it. No one’s going to miss it.” but that is the worst type of interference in the property market that I can think of. The member from the ACT party I thought made this point particularly well. Why is it that we have been seduced by minority groups into thinking that foreign ownership of our land means that New Zealanders will not be able to enjoy it? The facts do not stack up. Of the land that has been sold in the high country around mid-Canterbury six of the 11 stations sold in the last 2 years went to New Zealand interests. So much for the argument that they have been priced out of the hands of Kiwis. Fifty percent of those that were resold over the last 10 years went to New Zealand interests. 
Michael Cullen himself stood in the Chamber a few minutes ago and said: “You can’t take the land with you.” That is right. One cannot. It is always going to stay here. Yet that same Minister is sponsoring a bill that says it is OK to steal other people’s property. That is simply unacceptable. The great shame of all this is that rather than attract capital to New Zealand we are now getting ourselves into a situation where potential investors are starting to become gun-shy. Instead of welcoming those people and instead of using their capital we are losing that opportunity. I can think of an example in mid-Canterbury where a five-star beef block— 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the question be now put 
. 
ROD DONALD (Co-Leader—Green) 
: 
 I appreciate having a few more minutes to speak as I had not even got on to supporting my good colleague David Parker on his excellent initiative. But before I go there I want to finish talking about the amendments to the purpose clause that I have proposed on behalf of the Green Party and I am pleased to see that the Minister of Finance is with us to hear those. One of our fundamental concerns with the legislation as it stands is the extent of influence that the Minister has through his letter of direction to the Overseas Investment Commission. Although I have made considerable criticisms of the secretary of the commission in terms of how he has acted I recognise that the ministerial directive has pretty much determined how the commission operates. That has basically been—without quoting the letter in full—to facilitate overseas investment. The scrutiny function has very much taken a second-class position; the thrust has been to making it even easier for foreign investors to buy up our land our businesses and our buildings and we need some balance to that. 
Hence the amendment we are putting up to the purpose clause that public participation in decisions around overseas investment will be encouraged. I believe it is vital that the people of New Zealand have a say in whether overseas investments are appropriate rather than the regulatory authority simply carrying out the wishes of the Minister of the time—although given that the Minister is usually Labour or National there is very little difference between them in terms of their determination to make it even easier for foreign buy-ups. 
I say this not only as a citizen but also with the benefit of information from Mark Dunlop who made a submission to the Finance and Expenditure Committee. I think he was very brave to do so as a former member of the Overseas Investment Commission staff. He said in his submission that the bill is fundamentally flawed and that it does not provide the framework including supporting structures and safeguards necessary to facilitate or ensure only positive and high-quality overseas investment that is beneficial to New Zealanders. He goes on to talk about the role of the regulator and said that it is simply unacceptable that the same body can act as both a compliance and enforcement agency and an advisory and facilitative one. On the one hand the commission is trying to encourage overseas investment as per the directive letter; on the other hand it is meant to be trying to ensure that compliance is maintained. Hence our amendment and hence our criticism of the commission’s job now being handed over to Land Information New Zealand. 
I finish my call by saying that I thought it was an excellent move on the part of David Parker to use this legislation to enable statutory marginal strips to be created when a foreign investor buys up land that adjoins our foreshore our significant lakes and our significant rivers. It is a great step forward for public access in New Zealand. It recognises that the lakes the rivers and the foreshore are public should be open space and therefore should be accessible. I am extremely disappointed that some parties in this House that I thought supported public access and the ability for people who enjoy the great outdoors to get access to that public space are now voting against this provision simply because there is no provision for compensation. 
There is no provision for compensation when a subdivision takes place either. Will United Future now be demanding that landowners be compensated when they proceed with a subdivision? I hope not. I hope that they will see sense. I hope that the outdoor recreation lobby and its party actually get some benefit from having its name attached to United Future and I hope that United Future will change its position on these amendments—that it will not force the Government to move its Supplementary Order Paper and backtrack on what would have been a great step forward for New Zealand and for New Zealanders especially those who enjoy the great outdoors. I am very sorry to see Dr Cullen have to back down on these provisions. They were successfully negotiated by the Labour member for Otago in the best interests of not only his constituents but also people throughout New Zealand. 
LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 51 
New Zealand National 26; New Zealand First 13; ACT New Zealand 5; Green Party 7. 
Motion agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 3 be agreed to: 
to omit this clause and substitute the following clause: 
3Purpose 
The purpose of this Act is to acknowledge that: 
(a)It is a privilege for overseas persons to own or control sensitive New Zealand assets by— 
(i)requiring overseas investments in those assets before being made to meet criteria for consent; and 
(ii)imposing conditions on those overseas investments. 
(b)Any ownership or control must be in the national interest for the long term benefit of New Zealanders. 
(c)Public participation in decisions about overseas investment will be encouraged. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 20 
New Zealand First 13; Green Party 7. 
Noes 92 
New Zealand Labour 51; New Zealand National 26; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (1) the expression “25” in both places where it occurs and substitute the expression “10”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 105 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (4) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: Rod Donald’s amendments to clause 6 to omit and substitute an expression in paragraphs (a) (b) and (c) of subclause (4) are now out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (5) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The next amendments to clause 6 in the name of Rod Donald to omit and substitute an expression in paragraphs (b) and (c) of subclause (5) are out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Rod Donald to clause 7 be agreed to: 
to omit from subclause (1) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The next amendments to clause 7 in the name of Rod Donald to omit and substitute an expression where it occurs several times in subclause (2) are out of order as they are inconsistent with a previous decision. 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of the Hon Dr Michael Cullen to Part 1 and the following amendment in his name to clause 6 be agreed to: 
to omit from subclause (1) the definition of  
computer register 
. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 100 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; United Future 8; Progressive 2. 
Noes 12 
ACT New Zealand 5; Green Party 7. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 87 
New Zealand Labour 51; New Zealand National 26; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 7; Maori Party 1. 
Part 1 as amended agreed to. 
Part 2 Consent and conditions regime 
The CHAIRPERSON (Ann Hartley) 
: The debate on Part 2 clauses 10 to 79 includes debate on schedules 1 and 2. 
PANSY WONG (National) 
: 
 Madam Chair I hope that you will be very generous about accepting many calls because Part 2 is basically the bulk of this legislation. 
First of all I would like to raise some questions for the Minister in the chair Michael Cullen to answer because I really really want to get some assurances from him. As I pointed out in my second reading speech a lot of the resentment and negative public perception towards overseas investors particularly those purchasing buildings or investing in business is a result of some high-profile cases. There was some disproportionately bad publicity about some company that was supposed to move in and start mining or carry out some other operation and after many years nothing came of it. Officials came before the Finance and Expenditure Committee and said their hands were tied because the previous enforcement monitoring regime did not provide enough tools for them to be able to carry out their task. 
Part 2 Subpart 4 “Monitoring” talks about the role of the regulator. The select committee as a whole was quite concerned about the wording and the use of “may” as in clause 39 “Regulator may require consent holder to provide information for monitoring purposes” and clause 40 “Regulator may require any person to provide information for statistical or monitoring purposes”. I would like the Minister to take a call and explain to us whether it is really true in the past that the regulator found it difficult to obtain information or to actually monitor or to just pick up the phone to see why some of those investors’ plans had lapsed or whether the conditions had changed and what the reasons were. I think that created a lot of negative perceptions for the public which has not been helpful. 
So if the Minister can assure us that the word “may” in the legislation will be interpreted as an encouragement now that the regulator will be placed under Land Information New Zealand and that he or she will carry out the monitoring and enforcements that will relieve a lot of the negative perception towards overseas investors. In some cases the failure to fulfil the original conditions could be beyond the investors’ capabilities or circumstances could have changed. 
The select committee also requested that there be action on additional information and activities such as starting the collation of statistical information and the release of that for the public. Sometimes it is a fact that when information is not available people tend to have suspicions about what is happening. If information is available for public inspection that would be helpful for the public perception towards overseas investors. 
Of course the other thing I noticed was that 10 pages have been struck out of the bill— 
Brian Connell 
: The “Mugabe clause”! 
PANSY WONG 
: My colleague the very very learned hard-working and robust representative for Ashburton says it is the “Mugabe clause”. 
David Parker 
: I raise a point of order Madam Chairperson. Some people here have had relatives murdered by the Mugabe regime. That is true. I take offence at having a clause that is being associated with that despotic regime and would ask that you bring the member to order. 
The CHAIRPERSON (Ann Hartley) 
: Would the member withdraw reference to that please? 
PANSY WONG 
: I withdraw. Suddenly this bill will become a lot skinnier. Ten pages of it will be struck out. They relate to clause 21 which is entirely the effort of the member for Otago David Parker who is soon to be replaced by National’s Jacqui Dean. He put in 10 pages of legislation to create marginal strips without compensation. I could not believe it. The member explained this to us in the select committee. He said that it did not matter and would not affect the value of the property just because a marginal strip had been created. 
That is very very strange and I think the member might like to take a few calls. He seemed to be quite anxious to explain this himself and I invite him to do so. This is the Committee stage and all members are invited to explain and defend their position. So I invite the member to do that. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The provisions relating to the marginal strip of course will be removed by Supplementary Order Paper. That is the condition of United Future’s support for the bill. It also enables the National Party to vote for it. 
But I have to say I think Pansy Wong should not push her luck too far in terms of her moral outrage on the provisions that the Finance and Expenditure Committee put in. First she voted for Nick Smith’s member’s bill which did exactly the same thing and that was only last year; and second the current provision for a marginal strip after subdivision on coastal property was put in place in 1991 under the previous National Government. So Ms Wong’s “shock-horror” reaction lacks a certain amount of “probe” at the end of it I think one could say! Her whispering in Brian Connell’s ear is not going to help the matter in that respect; it will just confuse him I think more than he is already confused on most of these matters. 
The substantive issue that she raises is important. It is fair to say that under the current legislation the Overseas Investment Commission has insufficient capacity to follow up in terms of monitoring but more important the current Act which this legislation completely replaces is quite inadequate in terms of the penalties and enforcement regime. This legislation will provide for a much more effective penalties and enforcement regime should a purchaser fail to fulfil the conditions of consent. At the moment what one ends up doing is forcing such purchasers to sell. That is actually at the extreme end of the spectrum in terms of the appropriate solution that ought to be followed through. 
Although I think that has been part of the cause of public concern I think there are wider issues of public concern. There is a widely held belief which is not actually true that foreign purchase leads to greater restriction on access over and through property. For some peculiar reason people think foreign purchase means land is not subject to other laws around planning etc. and is outside the New Zealand legal framework. That is completely untrue. I am always opposed to any move to import into this legislation attempts to impose regulatory procedures if one likes in terms of planning etc. What we are doing quite consciously in this bill is providing mechanisms whereby as part of the consideration we can take into account national-interest considerations around access conservation etc. and we have already begun to do some of that. The Young Nick’s Head agreement was exactly one of those. The Shania Twain agreement was another one of those kinds of agreements. We were able to get public gains in terms of access in terms of conservation and in terms of historical protection which could not have presented themselves if the sale had occurred to a New Zealand citizen or to a New Zealand resident person. 
I think we are engaged in an important balancing act. Naturally enough my colleague from Otago is concerned about the proportion of high-country land in the Queenstown Lakes District that is owned by overseas owners. 
Brian Connell 
: Quite high. 
Hon Dr MICHAEL CULLEN 
: It is quite high. Even the member for Rakaia when he raised the issue told us that 50 percent of land transferred in mid-Canterbury was transferred to foreign ownership. But there is actually quite a high— 
Brian Connell 
: I raise a point of order Madam Chairperson. If the Minister is going to refer to what I said at least I expect it to be reported accurately. I said that 50 percent of the land that had been resold went back into New Zealanders’ hands. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. It is a debating point. 
Hon Dr MICHAEL CULLEN 
: If I could be more precise the figure was slightly less than 50 percent. The member said that of the 11 properties sold six were bought by New Zealanders which by a very simple piece of arithmetic that is not beyond the member means that five were not. That is pretty close to 50 percent of the total being passed into foreign hands in a relatively brief space of time. 
There are some countries in the world where that could not happen at all—where foreigners are not allowed to buy land. In Australia for example there are still some pretty strange rules about non-Australian citizens buying urban property and they would apply to some of the most senior chief executives in Australia. I think we have to bear in mind that balance is required in this respect so that there is public confidence. The fact I think that the so-called two tired old parties are combined against the fringe elements in this House on this matter is not one that gives me great cause for concern. It gives me some degree of confidence that probably there is a sustainable consensus that will be reasonably stable moving forward into the future. 
GORDON COPELAND (United Future) 
: 
 I want to take a call on clauses 21O and 21T of Part 2 of this bill because I want to make United Future’s position on the matter of marginal strips etc. very very clear indeed to the Committee. I do so firstly to clarify what the Minister Dr Michael Cullen has just advised the Committee and secondly to completely rebut and debunk the comments that the co-leader of the Green Party Rod Donald has made to this Committee about our position. It is amazing how other people in other parties think they know more about United Future’s position than we do. 
 I go first to the Minister’s comments. It is not true that United Future asked the Government to remove marginal strips from this bill—we did not. We said to the Government that we could not agree to clause 21T and the provision that no compensation would be payable to any person. My specific suggestion in that regard was that the bill should provide for an appropriate access fee to be paid to the New Zealand land seller. United Future’s position in relation to this matter was very very clearly set out in the commentary on the bill that came back from the Finance and Expenditure Committee which stated: “United Future although supporting the creation of marginal strips next to rivers lakes and foreshores does not agree that private land should be acquired for this purpose without the payment of just compensation. If the creation of such marginal strips is seen to be of value to the people of New Zealand then the Crown on behalf of its citizens is duty bound to pay compensation.” I advise the Committee that the decision to remove marginal strips in their entirety from this bill was the decision of the Government but one that we acceded to. I think that is a slightly different story from the one given to the Committee by the Minister. 
I now turn to the Greens’ comments. Clause 21O states that a marginal strip put aside under this legislation is to be put aside until the end of time. It is a permanent alienation of the use and enjoyment of a piece of private land currently owned by a New Zealander. It is State interference in use and enjoyment if it forces people to share something that they may not necessarily want to share. Clause 21T then states—and I want to get this very clear because it is quite obvious to me that Rod Donald has the wrong end of the stick completely—that no compensation will be paid to New Zealanders who own private land if they are selling it to a foreigner. Mr Donald has told the Committee that we think that compensation should be paid to foreign purchasers. Obviously he has never read a sale and purchase agreement. He has no idea how they work because that is a ludicrous comment. That has never been our position and in fact it is a total misrepresentation of everything we stand for and believe. We are not as stupid as that. 
I shall talk also about our affiliation partner Outdoor Recreation NZ. I advise the Committee and particularly Mr Donald that Outdoor Recreation NZ’s position in regard to access strips in general which it is strongly in favour of as is United Future is that they should not be created at the expense of property rights. That is the point of difference is it not between Outdoor Recreation NZ the common-sense Greens—the practical Greens the intelligent Greens the logical Greens—and the party in this House called the Green Party which masquerades in that colour when in fact we all know it is just like a watermelon inside. The Greens are as red as it gets just like a watermelon. I am not at all surprised that the Greens are quite comfortable with the no-compensation clause. They back it to the hilt. The Green member Mike Ward spoke in this House on my member’s bill. His attitude was this: if he Mike Ward personally or any of the Greens disagreed with what someone was doing on his or her property they reserve to themselves the right to stop the person from doing it and to force him or her to do something else. That is what Mike Ward of the Greens told the House in respect of my private property bill and that is the Greens’ attitude. That is outrageous. It will not be tolerated by New Zealanders. Really when New Zealanders understand that that is the Greens’ agenda they will make sure that they disappear from Parliament. Such views override the Magna Carta and all the rights we have worked for over about 1000 years in terms of private property. To have those rights overridden by such ridiculous nonsense and sheer arrogance is unacceptable. 
ROD DONALD (Co-Leader—Green) 
: 
 I appreciate the opportunity to take a call or two on this part because it is the substance of the bill. As I said in my second reading speech I would like to give the Government some credit for some improvements to this part of the bill and to thank the officials for their assistance in achieving those improvements—particularly such things as adding a definition of “good character” and so forth. In our view the bill is still remiss and therefore we have put up a number of significant amendments that I would like colleagues in the House to give some serious consideration to. 
The first amendment is to clause 10 where it refers to “an overseas investment in significant business assets”. We want to make it very clear that in our view significant business assets should include aquaculture. Aquaculture is an increasing business on our coastline. In fact it is a business that in our view involves people in businesses being able to make a private profit from an activity conducted on and in the public commons. Therefore the coastal marine environment in our view is just as sensitive as the offshore islands the high country the lake fronts and the riverbanks that have particular restrictions placed on them under this legislation. 
We believe that aquaculture should be covered by this legislation and it is not. That is a significant deficiency in the legislation so we want clause 10 amended to extend to aquaculture. I have proposed that amendment because this concern was reinforced by the Royal Forest and Bird Protection Society in its submission that stated the bill failed to protect public open space in the coastal marine area and because there was no screening of purchases by overseas persons of their resource consents or application for resource consent to use the coastal space for aquaculture. We think that it is absolutely vital that any foreign investor who cannot prove that such an investment is in the national interest should be disallowed from investing in applications for coastal permits and associated resource consents. 
Therefore we would like to see this bill include some weighty environmental criteria to ensure that those wanting to use our public commons our coastal marine space which is scarce and is sensitive need to pass a hurdle as least as high as the hurdle that is required of those wanting to buy the high country or an offshore island. 
But we are well aware why the Government is opposed to that amendment. It is because successive Governments have given away this Parliament’s right to protect our coastal environment. They have given it away through their negotiations on the General Agreement on Trade in Services. Way back in 1994 a National Government basically gave away our power to protect our coastal space and then the Labour Government made it even worse through the Singapore free-trade agreement where it basically did not exclude aquaculture from that agreement. Therefore it is included and it would be regarded as a breach of that agreement if the current Government or the current Parliament were going to protect our coastal marine environment. I think that that is extraordinarily sad and it is outrageous that one Government has chosen to bind all future Parliaments in this way. 
I contrast that with the fact that even what the Government has signed up to with the OECD has at least left the door open by reserving commercial fishing. Commercial fishing could be interpreted as aquaculture but because of the Singapore closer economic partnership Labour signed up to I think without due consideration we are locked into forever in the future allowing more and more of our coastal areas—areas that New Zealanders value as a place to go fishing for themselves a place to just potter around in their boats—to be taken up by marine farms of one sort or another to the detriment of our ability to enjoy our great outdoors. 
 The next amendment we will be putting forward to this part relates to the threshold at which an overseas investment should be scrutinised. As I said during the second reading debate Jim Bolger in the dead of the night lifted it from $10 million to $50 million and then this Labour Government reinforced the $50 million threshold in the Singapore closer economic partnership and they want to multiply it up to $100 million whereas we want to cut it back to $10 million. I am hoping we will get some support from New Zealand First on that at least because they supported a figure of $10 million at the select committee review in 2002. 
We also have an amendment that would require all pastoral leases to go through a tenure review process before any of the high country can be sold. That was another recommendation from the Royal Forest and Bird Protection Society which we believe has a lot of merit and therefore we are putting forward an amendment to achieve that goal. 
But the most significant change we want to see in this part and the one I hope I have the chance to elaborate on is that we want to see clause 18 applied to significant business assets. Clause 18 as far as it goes is quite a good clause. It does require somebody wanting to purchase land to demonstrate that he or she will achieve a number of things such as the creation of new job opportunities the introduction of new technology and business skills and an increase in export receipts for New Zealand and that in the process there will be adequate mechanisms to protect or enhance existing areas of significant indigenous vegetation. I appreciate that the Government has added at my request on behalf of Fish and Game New Zealand that exotic species will also be covered in terms of taking account of or protecting or enhancing them in the case of trout salmon and gamebirds but also that public access will be enhanced. 
But these provisions do not apply to business purchases and that is ridiculous. Why apply them only to land? Why not extend them to significant business assets? So we have put forward amendments that say clause 18 should apply to business buy-ups. It is actually business buy-ups that are having much greater impact on our economy than land purchases by foreign investors. It is not enough that those businesses only have to meet a “good character” test. They should have to demonstrate that buying a business is going to lead to more job opportunities bring new technology to New Zealand and will look after the environment. We would add by way of an amendment that they should increase domestic substitution of imports into New Zealand to balance the export receipts the Government has put in. 
It is absolutely vital that business buy-ups are greenfield investments not asset stripping which so many business buy-ups have been in past. Tranz Rail was a classic example of foreign investment leading to this Government having to bail out the rail network in New Zealand because it was stripped of any worth and left in a very dangerous state. So the Government ought to back extending clause 18 to include significant business assets. Without that this bill has no substance. It is completely gutless. It will not achieve the intent the Government claims it will achieve and it will certainly not meet the expectations of New Zealanders for tighter scrutiny of applications for foreign investment let alone scrutiny of their activities when they come to New Zealand. 
It is also remiss of the Government not to have any reference in this part to the Treaty of Waitangi and we have suggested an amendment to clause 18(2) so that there are adequate mechanisms in place to ensure that any decision is made with reference to the principles of the treaty. We think that the Government should not back off its commitment to the principles of the treaty and therefore we seek that amendment to this part. 
We also want to pick up on the submissions that came from many people that any regulatory agency should be keeping a full and correct record of all land business and building sales to foreign investors. Something that came through and was I think virtually unanimous around the table was that we do not know the extent of foreign ownership in this country and even if the scrutiny threshold is higher than zero the monitoring should be set at a base level. 
DEBORAH CODDINGTON (ACT) 
: 
 That is one of the nuttiest proposals I have ever heard. How could the principles of the Treaty of Waitangi be applied to an overseas investor who is seeking to purchase a business in New Zealand? I thought I had heard everything! We have heard a lot of things today. We have heard about assets and about how foreigners are gobbling up New Zealanders’ land. We have heard that the Labour Government has brought in this bill to suck up to the Americans so that we can have a free-trade agreement. I have heard so much racist and xenophobic claptrap that I am getting to stage where I wonder why any foreign investor would want to come here in the first place. We are very unwelcoming. People in the Green Party think that the Berlin Wall was built to keep the Westerners out. 
I come back to Part 2 and specifically to clause 18 and the tests that need to be passed before foreign investors can purchase and invest in a business—in particular in land with assets or important assets. May I just remind the member from New Zealand First that no assets were sold. No State assets have ever been sold in this country. They were all liabilities. If that party is to be consistent in its constant raving about the selling of the New Zealand post offices and Telecom etc. why does it not put its money where its mouth is? Why does it not buy them all back take away everybody’s cellphones put everybody back on a waiting list where they had to wait for 6 months to get a new phone connection have the New Zealand post office own all sorts of workshops etc. have $90 million of taxpayers’ money going into it every year and stop bleating on about the downside of selling to foreign owners things that were liabilities to the taxpayer? One could put up a good argument for the railway by the way that it was the New Zealand owners who stripped it and the foreign owners who at least tried to do something with it. 
Rod Donald 
: Ha ha! 
DEBORAH CODDINGTON 
: I just remind the member of the wine-box inquiry. How many foreign investors were involved in that? Not one. 
I come back to clause 18. 
Rod Donald 
: How many of them gave money to ACT? 
DEBORAH CODDINGTON 
: None. How can we force people to share? That is what the Green Party says we should do. It says that everybody should share and it wants to force them to share. We will regret going down this path. What right do we have to force somebody who is purchasing a piece of land to put in walkways? What right do we have to force people to support the registration of historic places wahi tapu or historic areas under the Historic Places Act? 
Rod Donald 
: Demolish the lot then. 
DEBORAH CODDINGTON 
: That member has very little faith in human nature—no faith at all. Why does he think that just because he would demolish the lot everybody else every other private landowner in New Zealand would cut down every piece of bush and destroy every archaeological site? Just because he has the view that he would do so that is no reason to believe that every landowner in New Zealand will do so. If we have public walkways set aside and if we allow access for people to go trout fishing and salmon fishing how long will it be before the Department of Conservation with its current philosophy of “humans bad no humans good” bars all public access to those areas? I predict that it will not be very long at all. 
It is bad enough that anybody in New Zealand has to go through the tortured Resource Management Act process to get anything done without foreign investors having to be subject to all the conditions and tests set out in the bill. And what happens then? We have seen what happens when they do pass the tests. We have seen what happened with regard to Motutapu Station where the Minister of Finance Dr Cullen talked about the agreement the Government was able to get there with walkways etc. What have those purchasers got out of that? We can look at the tortured process Elaine Lange otherwise known as Shania Twain is going through in order to get her house built even though she has agreed to put in walkways and register significant sites. We should subject everyone to the same process. 
BRIAN CONNELL (National—Rakaia) 
: 
 I have to start by responding to Michael Cullen. He is turning into a sensitive wimp. I do not know what is causing it but I suspect that the political tide is going out and his true character is emerging. 
Simon Power 
: He’s brittle. 
BRIAN CONNELL 
: He is brittle that is for sure and it is starting to show. If he is going to quote me I expect him to do it accurately. What I said was that there had been 11 high-country sales. Six of those had been sold into Kiwi hands and five had gone to international interests. The five international owners have subsequently turned over those properties. Fifty percent of them—actually three of them—were sold back into Kiwi hands. My maths are much better than Michael Cullen’s because I know that that does not add up to 50 percent of the 11 original sales. That probably explains why today the Government announced a monumental cock-up to the tune of $1 billion over what are now New Zealand’s carbon liabilities instead of the $500 million positive position it tried to tell New Zealanders their country would be in when it ratified the Kyoto Protocol. 
Mr Cullen then took a cheap shot at my colleague Pansy Wong when he said that it was a National Government that drove subdivision legislation. Well there is a huge difference in driving subdivisions. Subdivisions actually add value because people want them. Then he took another cheap shot—it was a threat really—at my colleague Pansy Wong when he said that she should be very careful with her moral outrage because of something Nick Smith had done. 
Pansy Wong 
: He tried to intimidate me. 
BRIAN CONNELL 
: He tried to be intimidating. Well one does not intimidate Pansy Wong as easily as that. In fact one does not intimidate anyone from the National Party as easily as that. If the Minister is so sensitive and if he is so sure in regard to the 10 pages of provisions the member for Otago put into the bill that state one can compulsorily take private property from New Zealand citizens without any compensation then will he please explain why he is moving a Supplementary Order Paper to take them out? Will the Minister take a call and explain that fact? I bet he will not. What he will do is to rage on about Pansy Wong and Nick Smith take cheap shots and try to deflect from the fact that it is his bill—a Government bill that he is sponsoring—that proposed the clause in the first place. 
It was only when he had to bow to public pressure because the tide was going out for the Labour Party and the rest of his cronies who are associated with it that he thought: “Oops I’d better try to do something.” 
But for that Supplementary Order Paper the National Party could not have supported this bill and that would have been a shame because the essence of overseas ownership of New Zealand lands subject to reasonable conditions is something I strongly support. 
I have to ask where the negative sentiment comes from that says that overseas investment is bad that it is hurting New Zealand. Overseas investors wanting to invest in New Zealand’s economy is a vote of confidence in our economy. It is not a negative sign. For goodness’ sake we are now a multicultural society! We cannot build a wall around us to try to keep the rest of the world out. It simply does not work like that. We are all immigrants starting with Kupe. Let us not forget that fact. 
I am a strong believer that investors coming to New Zealand with their hard-earned cash and wanting to invest here is something we should welcome with open arms. Arguments to the contrary are simply arguments from people with their heads in the sand who hope the world will pass them by. 
I can think of some practical examples to share with members of this Committee. I can think of a Japanese investor who bought a farm near the foothills of Rakaia who spent $600000 buying it and who everyone thought was mad— 
The CHAIRPERSON (Hon Clem Simich) 
: I call Craig McNair. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. The point the National Party would like you to clarify is about Mr Connell being obviously interrupted in mid-sentence by the bell. That exact same set of circumstances occurred when Mr Donald was speaking and the Chair granted him an immediate second call despite the fact that other members of Parliament were seeking the call. Mr Connell was interrupted in mid-sentence. He sought a second call but he was not given it. I guess that what members on this side of the Chamber are now asking themselves is this: under what circumstances are second calls being granted back-to-back to some parties and not to others? 
DAIL JONES (Junior Whip—NZ First) 
: 
 New Zealand First has the utmost faith in your decisions on these matters Mr Chairman and would not want to question them at all. But I presume there is a practice that where there is a spokesperson he or she is entitled to get a second call. I think it was part of the Standing Orders some time ago that spokespersons were supposed to get a second call if possible. I am sure that Mr Rod Donald is the spokesperson for the Green Party on this issue but I do not think Mr Connell is the spokesperson for National on it. In any event I am sure you are working out the proper apportionments and New Zealand First has every faith in your decision to give the call to Mr McNair. 
BRIAN CONNELL (National—Rakaia) 
: 
 Perhaps Mr Jones could point to the Standing Orders that state that only spokespersons get back-to-back calls. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank members for that. It is entirely up to the Chair. Yes Brian Connell was in mid-sentence. There are quite a few calls to come yet and I have no doubt the member will get some of those. I tried not to cut him off. Mr Donald was given consecutive calls because he has a great number of amendments. I think it will be fair all round. I did not want National to sneak too far ahead of New Zealand First at this stage. 
CRAIG McNAIR (NZ First) 
: 
 This afternoon I want to focus on clause 21T “No compensation for marginal strip” and to get my case clear on this issue. Either we let overseas owners have the land or we do not. It does not really matter what side of the argument we are on—whether we are for this bill or against it whether we are for foreign ownership or against it—at the end of the day what this clause and David Parker’s amendment were about was taking something away from somebody. They are saying: “We’re going to let you have it but once we’ve let you have it we’re going to take some of it away from you.” We should make up our minds at the beginning. Either we let the person have it or we do not let the person have it. That is the deal and that always should be the deal. That is the problem New Zealand First had with the clause and with David Parker’s amendment—the smokescreen amendment. I think it is outrageous that the Government was even considering that clause and still to this day Government members get up and passionately advocate for it. 
We all know the reason why the Government is pushing this issue. An election is on its way in the next 1 2 or 3 months. Government members looked at each other and said: “What are we going to do? We have to do something to make it look like we are the true Labour Party of the old days.”—and by that I mean the Labour Party before 1984; the same Labour Party that went up and down this country signing a petition pledging that it would— 
Jill Pettis 
: Where was that member in 1984? 
CRAIG McNAIR 
: Admittedly I was quite young. This is not from memory; this is from learning a bit of political history. The facts are that the Labour Party of old would not have supported this bill. 
New Zealand First says: “Make up your mind. Either let them have it or not.” New Zealand First says that at the end of the day this bill is wrong it is fundamentally flawed and it is not putting New Zealand and New Zealanders first. This bill allows foreign investors to come here flog off our country’s assets in a huge way and have no regard for New Zealand and New Zealanders whatsoever. That is what New Zealand First says. There is $12 billion going out of this country every year because of the dealings of Labour and National in the 1980s and 1990s. 
There is another point on this issue that I want to talk about before I move on. Who will be next? That is the question I want to ask. Labour Party members put their heads together thinking that here is a situation whereby they can make it look like they are being tough and looking after New Zealand’s interests and put in an amendment to say that they will allow foreign investors to buy land in this country but then they will take some of that land away from them. That is what Labour members did. They put their heads together and said: “Let’s do that.” and then they said: “We will push this little part for now and in the future we will start taking New Zealand - owned land off New Zealanders once we have got this amendment through.” So who will be next? 
Labour is very very disappointed. David Parker was almost devastated by the fact that his amendment could not be rammed through today. He was devastated. Labour has a hidden agenda on many issues and on this issue those members jacked it up. They thought they had it all ready set to go but they were not able to do it. That is why they are devastated—because they have a hidden agenda on this issue. They want Kiwis to be next. They want to start taking Kiwis’ land off them. They want to start initiating the “Mugabe clause” right through our legislation. 
BRIAN CONNELL (National—Rakaia) 
: 
 When I was speaking previously I was about to share with the Committee the story of a Japanese investor who bought property in the Rakaia Gorge back in the 1990s. He paid $600000 for a property and everyone concluded he was absolutely mad. The locals were laughing out of the sides of their mouths. They could not give the land to him quickly enough. They thought they had caught themselves a mug. This investor has subsequently turned that farm into one of the pristine golfing environments in this country. It is now referred to as Terrace Downs. Terrace Downs is favoured by people on the golf circuit as one of the three best golf courses in this country. That investor has gone on to spend $80 million and his initial investment was $600000. 
People from Christchurch have invested in Terrace Downs in their droves. The subdivision legislation that was introduced by National which Dr Cullen took umbrage with has enabled Christchurch investors to invest in Terrace Downs in their droves. Some of the houses there are outstanding. The landscape is outstanding and the golf lodge is also on the circuit of “must visit” places for people who are holding a function of any sort. The number of tourists who come through Terrace Downs on any given day is contributing huge amounts of capital to the local community as well as to New Zealand more broadly. 
But—and there is a but—one or two of the holes I can think of go down to the water’s edge. We were told by the member for Otago to accept that that investor having contributed something like $80 million to this iconic location should have that value taken from him. He should have that land taken from him so that people could no longer play the 10th hole on the Terrace Downs golf course. That is what he implied. That is what he was trying to do. 
Michael Cullen can take all the moral high ground he likes. This is a bill that he is sponsoring. But he got the nod from the New Zealand public to say: “Hey the tide’s on the way out. You had better pull your horns in.” That is what Dr Cullen and David Parker were trying to foist on this House and on the people of this country specifically. 
I can think of another example but before I go there I just want to say that this country needs people like that investor. We need people who are visionary who are prepared to take risks and who are prepared to have the courage of their convictions and come to New Zealand and invest. But I fear that a lot of the anti - overseas investor sentiments which are driving some of the debates I am hearing today are simply based on racial grounds. We have to accept now that we are a multicultural society and we need people like that to come here and invest. 
I said I could think of some other examples and I can. Another example which also includes Japanese capital is Five Star Beef Ltd in Ashburton. It houses 18000 cattle which are destined for high-value restaurants in Tokyo. That investment has about $30 million of Japanese capital and without that capital it would not have happened. It would not be sustainable. That beef lot example underpins three local transport companies underpins the local barley price supports two freezing works in the district and employs I do not know how many people but it runs into hundreds. If we listened to the arguments that have been put forward those investors would not be welcome in this country and that is an absolute nonsense. 
GORDON COPELAND (United Future) 
: 
 I want to speak a little further to the substance of the Supplementary Order Paper amendment that withdraws the marginal strips provision. I think it is very important to explain to the Committee that the Supplementary Order Paper amendment will not bring to an end the possibility that marginal strips alongside rivers and lakes will be set aside when a New Zealander decides to sell land adjoining lakes and rivers to non-residents. 
 I say that because in clause 18 “Factors for assessing benefit of overseas investments in sensitive land” subclause (2)(ba)(ii) states that one of the things the Minister will do in deciding whether to approve such a sale is to look at “providing protecting and improving walking access to those habitats” of indigenous vegetation and indigenous fauna. Paragraph (d) of the same subclause states that the Minister will also ensure that adequate mechanisms are in place for walking access over the relevant land or a relevant part of the land by the public or any section of the public. Notwithstanding the Supplementary Order Paper amendment the Minister will still in deciding whether to approve the sale of sensitive land to an overseas buyer take into account the whole question of walking access along rivers and lakes. 
Here is what will happen. If the New Zealand seller decides that he or she can get a better price for the land by selling it to an overseas person and both the seller and the purchaser know that that is a condition of the sale then of course the New Zealand owner will agree to allow access. On the other hand if the overseas buyer would not pay any more than a New Zealand buyer would then the question will not even arise and walking access will not be given. In substance notwithstanding the Supplementary Order Paper amendment I believe that marginal strips will still be created in the great majority of cases and it will all be done without breaching the important principle that compensation should be paid when land is confiscated. We have a win-win situation. 
I go back for a moment to a remark that Rod Donald made about the Ruby Bay cliffs. I am very familiar with the situation of the Ruby Bay cliffs. For those who do not know Ruby Bay it is on Tasman Bay in the province of Nelson. It involves a piece of land known as the Copeland block because it is the place where I was blessed to grow up when I was kid and a beautiful piece of land it is. That block has now been sold to a family who have built a multimillion-dollar house on the land and it is now the subject of great controversy. Why is it controversial? It is controversial only to a group of Greens really. It is controversial because the people who now live there who are New Zealand residents were born in California. Guess what they have had the audacity to do? They have cut down a whole lot of  
Pinus radiata 
 trees that were growing along the top of the cliff.  
Pinus radiata 
 happens to be a native of California but this particular Californian family who have come here who have decided to quit California and want to become Kiwis are cutting the pine trees down and are spending thousands of dollars on planting thousands of native plants on those cliffs. There will be indigenous plants on the cliffs. 
Rod Donald 
: The cliffs are falling down. 
GORDON COPELAND 
: They will not fall down once the growth starts I say to the member. When I look at that with any objectivity I conclude—as any reasonable person has to—that there are two things happening. One of them is xenophobia because the people happened to be born outside this country and the other one is just sheer envy. End of story. 
MAHARA OKEROA (Labour—Te Tai Tonga) 
: 
 I move  
That the question be now put 
. 
JOHN KEY (National—Helensville) 
: 
 I rise to take part in the debate on Part 2 of the Overseas Investment Bill. I want to reflect on the issue around the size of companies and the reasons for which the current threshold for a company to be required to give notice of an intention to acquire a New Zealand company which is around about $25 million will be extended up to $100 million. 
Rod Donald 
: Shocking! 
JOHN KEY 
: No it is a wonderful thing. I want to talk about why it would not make sense for acquisitions involving amounts of less than that to be referred to the Overseas Investment Commission. As members will probably be aware there has not been a situation where the commission has turned down an application from those companies. 
I want to put a slightly different spin from that of the Green Party on what takes place when foreigners make an acquisition here in New Zealand. In particular it relates to the criteria and factors that will be considered. They are the issues around job creation business skills development of export receipts market competition and additional investment and development. I say that because last Friday I met with a group of investors who have invested about $50 million so far in New Zealand but who have ambitions to invest a further $150 to $200 million over the next 2 to 3 years. It was interesting to talk to them about the role they have been playing in the companies they have been acquiring in New Zealand. It has been a role of quite active management which is slightly different from the normal venture capital situation in which a lot of the investors will come along and supply some finance but essentially leave the status quo in place—the companies concerned are left to get on with it. 
In fact the investors I met have done something a lot of commentators have argued is a real benefit of overseas investment. They have come to New Zealand and invested not only their capital but also—maybe this is more important—their time and their contacts in their international networks. In many respects that is quite similar to the situation that operates domestically in New Zealand with “angel investors” who are involved I guess more in the infancy of the development of a company. They may not put in very much capital at all but it is very often the case that they agree to lend their experience skills know-how and knowledge to small companies that are looking to develop. 
What was interesting about the investors I met with last Friday was that they told me that in the case of a number of New Zealand companies that they have bought into with a significant investment they have managed to double and treble the size of the exports of those companies in a very short space of time—within months of acquisition. Members may ask themselves why it is that a foreigner is able to come to New Zealand and supply something that is more than just capital which we accept is reasonably freely available here in New Zealand. The answer is that the companies that are being acquired often operate here in New Zealand in a niche area. They are built on the backs of entrepreneurial New Zealanders who have developed some good ideas technical know-how and skills. But those people lack the ability to have access to the marketplace and to other suppliers along the food chain who may buy their products. So what is hugely valuable about those investments is not so much the ability of the company to get access to capital but its ability to get access to those vertical chains. 
Navman New Zealand is quite an interesting example. At one level I was concerned about Navman being sold offshore because I think it is producing fantastic technology and I do not want to see that company picked up relocated to Los Angeles and lost to New Zealand. The real challenge for New Zealand is to prove that it is an incubator and also a developer of great companies. It has been quite interesting to see that Navman has at this stage at least managed to take the foreign capital that has come out of the Brunswick Corporation and develop the company on by building greater market access and penetration of its goods—by building a world-class company with world-class products on the back of that technical know-how. 
Gerry Brownlee 
: That’s right. 
JOHN KEY 
: That is right. For those who stand up to speak on this bill and say that foreign investment is bad— 
Gerry Brownlee 
: Who are they? 
JOHN KEY 
: The Green members for one and the New Zealand First members as well. They do not want a bar of anyone from overseas. They actually forget the other things those people may bring outside of capital which are much more important than capital. I refer to things like knowledge and know-how and access to markets. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 I move  
That the question be now put 
. 
DAIL JONES (NZ First) 
: 
 I think this bill highlights what is happening in New Zealand to a large extent. Once again we are in danger of drifting back to the situation we had between 1984 and 1990 when Labour came into office and sold off New Zealand and between 1990 and 1999 when National came in and sold off New Zealand. Now we see Labour and National once again combining forces to establish a situation whereby they can once again sell off what little is left. 
I think the preceding speaker could quite easily have been speaking about the wine industry in New Zealand. Small vineyards have been developing in New Zealand. For example Sauvignon Blanc is grown in the Matua Valley area which is where Sauvignon Blanc started in New Zealand. The Matua Valley Wines company is the result of wonderful work done by the Spence brothers. Of course people can reach a certain point at which they ask where they go to from here and inevitably if their family do not want to stay on in the business they ask themselves who will give them the best deal. The best deal may come from an overseas company. 
Deborah Coddington 
: What’s wrong with that? 
DAIL JONES 
: The company loses its New Zealand feel; what is “New Zealand” about it is being sold off. [ 
Interruption 
] What is the name of the company now? We are gradually selling off New Zealand in that sort of way. In the first instance it sounds good but if people think those big international companies are here for the benefit of New Zealand they really have another think coming. People are so naive. Deborah Coddington and Gordon Copeland are so naive. If they think those big overseas companies are here for the benefit of New Zealand they are dreaming. It is absolute dreamtime. They should be with Michael Jackson in never-never land. They are never-never land people if they believe that the big overseas companies are here to help New Zealand. Those wine companies are here only to help their shareholders get all they can out of the New Zealand wine industry. If necessary they would move on tomorrow if there was no more profit and it would be to heck with New Zealand. 
I give members that as an example. I think it is so appropriate to the Helensville electorate and to the sort of thing that happened in West Auckland in the past. We are losing the New Zealand person being involved in and running the business. Those companies are now run not by New Zealanders but by foreign people. Foreign people come to New Zealand and run the companies now and New Zealand jobs go begging. It may be that a New Zealander can get into the company and work his or her way up to the top somewhere in New York or wherever but we have to ask ourselves if we are New Zealanders where is New Zealand in all of that? I raise that as an issue. It is a classic example that I have come across. 
Brian Connell 
: Where’s Ralph Norris going? 
DAIL JONES 
: He is gone; he is lost to New Zealand. He is not here for New Zealand any more. It is a culture thing of course. The National Party member talked about foreigners coming in and it being a racial thing. It is not; it is a pro - New Zealand thing. That is something the National Party does not understand. Those members are here only to talk to the big boys who want $50 million or $150 million deals. We wonder what else can flow on from that to a particular political party. 
New Zealand First does not want a bar of that type of thing. We are here for New Zealand first. We do not want that situation created which is the danger we see in this legislation. Deborah Coddington does not want to stay in Parliament any more and does not have any regard for trying to protect the interests of New Zealand any more. She is going; she is gone. But New Zealand First is here. We make the point that we should not pretend that any of these big companies are here for New Zealand. They are big internationals; they are in New Zealand today and in Chile tomorrow. If the Chilean wine industry booms they will be in Chile tomorrow and in Argentina the next day if they can. That is the way it goes. They would be in South-east Asia if they could grow wine there but it is very very difficult to grow wine from grapes in South-east Asia. 
All the ideas that some of these people come up with sound great but I say to Mr Copeland that I am afraid that he is really out of touch with what big business is about. I am sure that when he was with the oil company it was not working for New Zealand. It was working for its shareholders and its big interests. New Zealand First says we do not want to fall into the trap once again of National and Labour doing a deal and taking turns to sell off New Zealand. That is where New Zealand First comes in. We are in the middle. We want to make sure that everything is straight and fair and that New Zealanders in any deal that is done are protected. New Zealand First’s role is to look after New Zealanders first. 
Hon MITA RIRINUI (Minister of State) 
: 
 I move  
That the question be now put 
. 
ROD DONALD (Co-Leader—Green) 
: 
 I say to those members who like Mr Power are concerned about the extent of time the Chairperson has given me that this will be my last call. I am grateful for that time because apart from New Zealand First the Greens are the only party opposing the liberalisation of foreign investment in New Zealand. I know that ACT would like absolutely no rules on foreign investment but at least it holds no sway in this debate. 
As far as wanting to introduce tighter controls on foreign investment—something we think most New Zealanders support—I have a few more amendments that I would like to explain to the Committee and to the people of New Zealand who are listening. The first is to clause 32. It relates to the whole issue of compiling and maintaining a full and correct record of all land business and building sales to foreign investors—something that I think is absolutely vital and should be a responsibility of the regulator to do and to report on annually to Parliament. 
I am pleased to say that most of the members of the Finance and Expenditure Committee recognised that there is a paucity of information about the extent of foreign investment in New Zealand. The Government officially acknowledges that somewhere around 1 million hectares of land is foreign owned that a certain amount of our coastline is in foreign ownership—approximately 57 kilometres—and that around 2720 hectares of offshore islands and around 150000 hectares of high country are in foreign ownership. But absolutely no records are kept of land that is owned offshore that falls below the various thresholds contained in the schedules. All the members of the select committee acknowledged that there is some concern in the community about the extent of land purchases in particular areas by foreign buyers even when most of the individual purchases are below the threshold. 
I was pleased that the whole committee agreed with this statement in the commentary on the bill: “High demand by overseas persons increases house prices and can make it unaffordable for some New Zealanders to own property in such areas. There is currently no means for determining the extent of overseas ownership where the properties purchased are below the applicable threshold”. The majority of the committee went on to state: “… the collection of information regarding the residency status of property owners would be valuable.” I am pleased that that recommendation is in the commentary along with an encouragement to the Government to consider implementing a pilot programme to collect that information. 
That is good as far as it goes but we simply say it should go further and be obligatory. The Greens are concerned about two matters. One matter was raised by the whole committee and that is the fact that foreign investors are outbidding Kiwis. We are not just talking about the bach at the beach or the family farm both of which we think Kiwis should be able to buy; we are talking about that first home which is so vital in order for Kiwi families to get the start in life they deserve. The dream of owning one’s own home is now turned into a nightmare because so much foreign capital is coming into New Zealand particularly from Australia. Investors are buying up cheap residential properties and making it impossible for young Kiwi families to buy their own homes. So much for National’s property-owning democracy or Labour’s ownership society! The fact is foreign investors are allowed to outbid Kiwis when it comes to buying that first home. 
We have evidence of that. We have anecdotal evidence from around the country—from Kaitaia to Invercargill. In terms of specific evidence when I was on a select committee exchange to Australia last year we met a New South Wales Labor MP who was coming to New Zealand to buy up properties in Huntly and Ngaruawahia. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I want to take a brief call to rebut some of the nonsense New Zealand First decided to inject into the debate and in particular its criticism of the National Party. We know that New Zealand First is one of this Parliament’s parasites— 
Dail Jones 
: I raise a point of order Mr Chairperson. A member cannot call another member a parasite surely. 
The CHAIRPERSON (Hon Clem Simich) 
: Not even a party no. 
Dail Jones 
: Thank you. I ask the member to withdraw and apologise. 
GERRY BROWNLEE 
: I withdraw and apologise. Some will notice the parasitic behaviour of New Zealand First in the constant comments of its members about the National Party. Although I use the term “parasitic” one may say also that that behaviour is somewhat symbiotic because without the National Party there would be no New Zealand First. It is quite galling to find the New Zealand First politicians— 
The CHAIRPERSON (Hon Clem Simich) 
: Order! 
GERRY BROWNLEE 
: I was just coming to the bill. If I had not been disturbed by the point of order I would have been in only my first minute or so of rebutting the issue at hand: the misrepresentation New Zealand First chooses to put on National’s support for this bill. 
Although we have reservations about the bill in essence we recognise that facilitating overseas investment in a country like this is important. That does not mean selling everything off I say to Mr Jones. It does not mean entering into the sorts of shonky lease-type arrangements that the Government has entered into over the Transpower assets. 
Pansy Wong 
: What is that about? 
GERRY BROWNLEE 
: Members ask what that is all about. We would all like to know what it is all about. It would be helpful to Parliament if Dr Michael Cullen were to come down here and explain exactly how it is that this Government which is so committed to keeping State assets in the hands of the State has allowed such a transparently shonky deal to be put together. It is transparently shonky but is not transparent as a deal. Although we know that the assets are now in someone else’s hands and that the various parties in this Parliament who support the Labour Party have allowed that type of investment we do not know exactly the nature and structure of that deal. 
Brian Connell 
: Why don’t we know? 
GERRY BROWNLEE 
: Dr Cullen will not tell us. I have to surmise that that is probably because Dr Cullen himself does not know what has been done under his nose. Dr Cullen himself probably does not know what has been slipped into the pile of papers on his desk and what he himself has signed off on or exactly how much the New Zealand tax base has been rorted as a result of that particular transaction. 
Brian Connell 
: What did Treasury say? 
GERRY BROWNLEE 
: It would not matter what Treasury said because the Labour Government simply rubbishes everything that comes out of Treasury. It does not treat Treasury at all seriously. 
One of the most interesting points in this bill is the matter of the investor tests. It is good to see that we are making sure that those who choose to invest in this country are well qualified to do so and that locals will not pay the price for their inability to get together the capital they need. I ask the New Zealand First members to tell us what is so wrong with having foreign investment in this country. Has there ever been a time in our post-1840 history when we have not been heavily reliant on foreign investment? There has probably never been such a time. Certainly the places of origin of the capital that is invested in this country have changed dramatically. There was a time when New Zealand was largely owned by British insurance companies and British banks. That of course has substantially changed. Many New Zealanders now through international share portfolios share in overseas investment in this country. 
JILL PETTIS (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 50 
New Zealand National 25; New Zealand First 13; Green Party 7; ACT New Zealand 5. 
Motion agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 10 be agreed to: 
to insert in paragraph (b) of subclause (1) after the words “business assets” the words “including aquaculture”. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: The next amendments are to clause 14 in the name of Rod Donald and are to omit the expression “25” and substitute the expression “10” in subclause (1)(a)(i) and (ii). These amendments are inconsistent with decisions already taken and are therefore out of order. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from subparagraph (ii) of subclause (1)(a) the expression “100” and substitute the expression “10”. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from subparagraph (ii) of subclause (1)(b) the expression “100” and substitute the expression “10”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from paragraph (c) of subclause (1) the expression “100” and substitute the expression “10”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 17 be agreed to: 
to omit from paragraph (e) of subclause (1) the words “either subparagraph (i) is met or subparagraph (ii)” and substitute the words “subparagraph (i) and subparagraph (ii) are met”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 17 be agreed to: 
to insert after subparagraph (iv)(e) in subclause (1) the following new paragraph: 
(f)the relevant land includes pastoral lease land and a tenure review must be completed. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 18 be agreed to: 
to insert in the heading to this clause after the words “sensitive land” the words “and significant business assets”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 18 be agreed to: 
to add to paragraph (a) of subclause (2) the following new subparagraph: 
(vii)increased domestic substitution of imports into New Zealand. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to 18 be agreed to: 
to add to subclause (2) the following new paragraph: 
(g)whether there are or will be adequate mechanisms in place to ensure that any decision made is consistent with the principles of the Treaty of Waitangi including: 
(i)provision made for settlements to claims made under the of Waitangi including return of land; 
(ii)capacity retained for the establishment of Maori and Crown resource co-management structures. 
(iii)protection of the right to benefit from enjoy and exercise authority over Maori taonga. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 15 
Green Party 7; United Future 8. 
Noes 96 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 19 be agreed to: 
to add to subclause (1) the following new paragraphs: 
(e)the relevant overseas person or (if that person is not an individual) all the individuals with control of the relevant overseas person are New Zealand citizens ordinarily resident in New Zealand or intending to reside in New Zealand indefinitely; and 
(f)the overseas investment will or is likely to benefit New Zealand (or any part of it) or group of New Zealanders as determined by the relevant Ministers under section 18; and 
(g)if the relevant investment involves aquaculture the relevant Ministers determine that that benefit will be or is likely to be identifiable and substantial. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: An amendment in the name of Rod Donald to clause 20 to omit and substitute an expression in subclause (1)(a) is out of order because it is inconsistent with decisions that have already been made. 
The question was put that the following amendment in the name of Rod Donald to clause 32 be agreed to: 
to add the following new paragraphs: 
(i)compile and maintain a full and correct record of all land business and building sales to foreign investors. 
(j)report annually on the extent of foreign ownership in New Zealand. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 35 be agreed to: 
to add to subclause (3) the following new paragraph: 
(f)the content of any Code of Responsibility for Foreign Investors. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 43 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 43 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 44 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 44 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 45 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 45 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 47 be agreed to: 
to add to subclause (3) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. I seek your advice in respect of Standing Order 120 which reads: “An amendment must be put into writing signed by the mover and delivered to the Clerk at the Table.” I have just noted that the amendments we voted on in Mr Donald’s name that were moved by Mr Donald have not been signed by Mr Donald. In fact they were signed by Mr Locke. That places us in an unusual position unless the Standing Orders can give us further elucidation on the application of Standing Order 120. I would appreciate that advice. You would see the difficulty which at face value is that the amendments have not been signed by the mover as required by Standing Order 120. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes thank you for raising that. That would be the impression one would get. But the explanation is that the amendments were all submitted in writing and all signed on behalf of Mr Donald by Keith Locke and that signature is on the original submission of the amendments. 
SIMON POWER 
: I want to be clear about that Mr Chairperson. The Standing Order very clearly states that the amendment is to be signed by the mover. In this case we have several amendments and the amendments we have just voted on begin: “Rod Donald in Committee to move …”. That makes Rod Donald the mover of those amendments. Mr Donald has not signed those amendments; Mr Locke has. What is the standing of those amendments? 
Rod Donald 
: I think that Mr Power has raised a very interesting point and had the Clerk pointed that out to us at the time the amendments were submitted then we would have taken them off the Table and a member such as Mr Power would not have had the benefit of seeing our amendments in advance of the Committee stage debate. I could have signed them after 2 o’clock when I returned to the House from Dunedin this morning. So perhaps the Chair would like to consider whether the Standing Order intends that it be required that the actual mover sign an amendment or whether another member can sign it. 
In the same way I understand the procedure at the moment is that other members can sign for example the cover sheet for a member’s bill without the actual mover of that bill needing to sign it. For that matter another member can sign off an oral question without the actual member asking the question being needed to sign it. I think the liberal interpretation has been such that other members of one’s own party can sign on one’s behalf and if we change that interpretation for this purpose I think it would create some problems for parties having to find members to sign their own oral questions and other documents when they are not necessarily available to do so. 
SIMON POWER 
: I accept the points made by Mr Donald. I also accept the practicalities of having to deal with the tabling of oral questions and members’ bills when proposing members—I guess that is the right phrase—are not available to annex their signatures. The difficulty we find ourselves in here is that a specific Standing Order relates directly to amendments. It is my submission—and this is not a difficulty for Mr Donald in the sense that it is probably more a difficulty for the Clerk that the matter has got to this point—that it seems on the surface that Standing Order 120 has been breached because the amendments have not been signed by the mover. There is no reference to “the mover or his or her nominee” “his or her appointed person” or “his or her substitute”. The Standing Order is very clear that it is the mover of the amendment who must sign the document. Now I seek guidance from you as to whether we have just wasted 25 minutes of the Committee’s time in voting on amendments that are out of order—in fact that probably breach the Standing Orders by the fact that we even considered them in the first place given that as I say on the face of it Standing Order 120 has been directly breached. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member. I need no further assistance; the matter has been very clearly laid out by the person who raised the point of order. Yes on a literal reading of the Standing Orders it would appear to be correct. However it is a very longstanding practice in the Committee and in the House that with consent a member can sign on behalf of another member. That is what has happened this time and it is for the convenience of members. But I think it is an issue that needs to be looked at and I will get a proper ruling from the Speaker as to this practice. 
GORDON COPELAND (Whip—United Future) 
: 
 I raise a point of order Mr Chairperson. I fully accept your ruling in that regard but I would like to say that I have checked Standing Order 365 which relates to the lodging of oral questions. It specifically states that such a question must be “signed by the member or by another member on the member’s behalf”. So there is a distinction between Standing Order 120 and Standing Order 365 which is contrary to what Rod Donald advised. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes. Thank you for pointing that out. That was not part of my ruling. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. Thank you for your ruling. I do think that it would be worth the Speaker clarifying the difference between Standing Orders 365 and 120. I concur with my friend from United Future on that point and I thank you Mr Chairperson for your guidance on it. But that still leaves us in a difficult position and I think we owe it to the Committee to determine now what status is to be accorded the amendments we have just spent 25 minutes voting on. 
The CHAIRPERSON (Hon Clem Simich) 
: No I do not need any assistance on that. I have accepted those amendments based on the longstanding practice of doing it in just that way. All the amendments were put and they were dealt with. Decisions were made and the votes were all lost. So other than to urge the Speaker to give a clear ruling on that—as I am sure the Speaker will—so that we can incorporate that longstanding practice through the Standing Orders I cannot take it any further. 
DAIL JONES (Junior Whip—NZ First) 
: 
 I raise a point of order Mr Chairperson. With regard to the Minister’s amendments I presume they will be put en bloc so that we cannot say just have a vote on the amendment to omit clauses 21A to 21V and the heading above clause 21A as a separate vote? Some of us want to support that amendment but oppose everything else. We have supported the omission of the clauses dealing with marginal strips but here we will seem to be voting against their omission. Is it the practice that there will be just one vote and that we have no choice in the situation? 
The CHAIRPERSON (Hon Clem Simich) 
: That is a good point. 
DAIL JONES 
: Do I have to seek leave to have that done separately? 
The CHAIRPERSON (Hon Clem Simich) 
: That is the normal practice. 
DAIL JONES 
: In that case I seek leave that we first vote separately on the provision in relation to clauses 21A to 21V and the heading above clause 21A. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be objection. 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of the Hon Dr Michael Cullen to Part 2 and the following amendments in his name to Part 2 be agreed to: 
to omit from paragraph (b) of clause 42(1) the words “produce to the regulator” and substitute the words: “provide the regulator with”; and 
to omit from subclause (1) of clause 70 the expression “2004” and substitute the expression “2005”; and 
to omit from section 57(1)(b) in clause 73 the expression “57H” and substitute the expression “57HA”; and 
to omit from section 57F(2)(c) in clause 73 the words “Minister or”; and 
to omit from section 57G(1)(b) in clause 73 the words “the relevant overseas person is or (if that person is not an individual) all the individuals with control of the relevant overseas person are” and substitute the words “all the individuals with control of the relevant overseas person are”; 
to omit from section 57HA(1) in clause 73 the words “Minister or”; and 
to insert in subclause (1) of clause 78 after the words “exemptions granted under” the words “the 1973 Act or”. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 86 
New Zealand Labour 51; New Zealand National 20; ACT New Zealand 5; United Future 8; Progressive 2. 
Noes 20 
New Zealand First 13; Green Party 7. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 7; Maori Party 1. 
Part 2 as amended agreed to. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. Prior to the dinner break the Chairperson went through with members the concerns we had regarding amendments and Standing Order 120. That Standing Order refers to the fact that an amendment must be put into writing signed by the mover and delivered to the Table. Prior to the dinner break we discussed the fact that Mr Donald had moved amendments but they had been signed by Mr Locke. We had a discussion about whether that affected the validity of the amendments and what would become of them in terms of their standing now that the vote had been taken on them. The Chairperson prior to the dinner break indicated that he would get a ruling from the Speaker and I am asking at this point whether that ruling is forthcoming. 
ROD DONALD (Co-Leader—Green) 
: 
 Mr Power is right to the extent that the Chairperson said he would seek advice from the Speaker on the issue but the Chairperson also clearly ruled that he accepted the amendments. There was no doubt about that. So that particular issue is resolved as far as I am concerned. 
The CHAIRPERSON (Ann Hartley) 
: What did he say then Mr Donald? 
ROD DONALD 
: Mr Simich accepted the amendments. 
The CHAIRPERSON (Ann Hartley) 
: The ruling is that a member can sign on behalf of another member if the member had that member’s permission. So I ask Mr Donald whether he had given his permission to Mr Locke to sign on his behalf. 
ROD DONALD (Co-Leader—Green) 
: 
 I did indeed give my permission to Mr Locke to sign those amendments. 
The CHAIRPERSON (Ann Hartley) 
: That is the end of the matter. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. During the points of order about this matter Mr Copeland raised a very interesting point which was that the matter raised by Mr Donald by way of comparison was to draw an analogy with oral questions being signed by another member of Parliament. Mr Copeland’s contribution to the debate was quite right when he referred to Standing Order 365 which specifically makes provision at 365(1)(a) for oral questions to be signed by a member or by another member on that member’s behalf. In other words there is an express an explicit authorisation for another member with the consent of the member lodging the question or the moving member to do that on his or her behalf. No such explicit reference to another member signing on behalf of a mover in respect of an amendment exists under Standing Order 120. One of those Standing Orders relating to oral questions clearly makes provision for another member to sign on behalf of a member; Standing Order 120 makes no such allowance expressly or impliedly. Although I certainly do not want to question your ruling is it now the case that Standing Order 120 is amended by a Speaker’s ruling so that a member with another member’s consent may actually sign an amendment moved by the original member? 
The CHAIRPERSON (Ann Hartley) 
: No that is not correct. It is a longstanding practice that a member may sign amendments on behalf of another member if he or she has that member’s permission. That is the ruling. 
Schedule 1 
The question was put that the following amendment in the name of the Hon Dr Michael Cullen to schedule 1 be agreed to: 
to insert in the second column of Table 2 in Part 1 for the item relating to any regional park created under the Local Government Act 1974 and for the item relating to land that is listed or in a class listed as a reserve a public park or other sensitive area by the regulator under section 38 the words “0.4 hectares” in each case. 
A party vote was called for on the question T 
hat the amendment be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 8. 
Amendment agreed to. 
A party vote was called for on the question  
That schedule 1 as amended be agreed to 
. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8;.Maori Party 1. 
Schedule 1 as amended agreed to. 
Hon RICHARD PREBBLE (ACT) 
: 
 I raise a point of order Madam Chairperson. I apologise. I was looking at the voting instructions for the evening and forgot of course that the House resumed at 7 p.m. not 7.30 p.m. I ask to correct the ACT vote from six to five. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that purpose. Is there any objection? There is not. Thank you. The vote will be corrected. 
Schedule 2 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of Hon Dr Michael Cullen to schedule 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8; Maori Party 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 2 as amended be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8; Maori Party 1. 
Schedule 2 as amended agreed to. 
Clauses 1 and 2 
JOHN KEY (National—Helensville) 
: 
 I am happy to rise on behalf of the National Party to address this part of the Overseas Investment Bill. If commentators on this bill take nothing else out of it they will know one thing—that is the tide is going out for this very tired Labour Government. It is on the way out big time when its coalition partner United Future will not even support its tired old Labour policy. Even if Labour does not think that people with property rights should be respected and rewarded at least United Future was smart enough to understand the issue and left the Government on its own—on its tod—with nobody else in the entire Parliament supporting it. The Government could not convince the Greens who are opposed to everything and it could not convince New Zealand First members who are opposed to everything in this field. The Government did not get support from United Future members who could at least see it National’s way. It did not really care about the Progressives and ACT would not support it on this measure also for some very good reasons. Labour members were “Johnny-no-mates” and they have come to Parliament in the incredibly embarrassing position that they cannot even pass their own legislation. 
David Parker was quoted in the  
Otago Daily Times 
 telling the people of Otago that he had a victory. He said that he had won and declared victory. That reminds me of Michael Cullen and Helen Clark declaring victory a few months ago—well they are not smiling quite so readily tonight. David Parker will be looking for a new job post - election day 17 September. He will be looking for a new job but it will not be in this sort of area. No wonder Government members look a downtrodden and disheartened lot; they cannot even pass their legislation. 
I want to refer to one thing that Mr Parker said in the Chamber recently. He took offence that National wanted people who owned something to be paid for it when it was taken off them. Then he said our position was inconsistent because when it came to the foreshore and seabed issue we were not prepared to give Maori anything for taking it off them and that inconsistency was the problem with our position. I hate to tell Mr Parker but he may not be aware that in National’s view Maori did not own the foreshore and seabed in an exclusive situation. They owned it along with all other New Zealanders and they have not had anything taken off them. They are in the same position that they were in beforehand regarding the foreshore and seabed legislation. 
So Mr Parker might be a bit confused about National members’ position on marginal strips but we are not confused and we do not intend to send the message to anybody who invests in New Zealand—a domestic person or someone from offshore—that we will somehow legislate to have that person’s property rights taken off him or her anytime we like just because the people in power think it is a really good idea on the day. We have seen that system operating in various other regimes. It has not worked tremendously well in Zimbabwe and I doubt that it would work terribly well here in New Zealand. So we will not be supporting that notion. [ 
Interruption 
] That is right. 
I do want to refer to the investment in companies that come here from offshore and I think lifting the threshold does make sense. There are some very sound and credible reasons why foreigners who invest in New Zealand companies can actually add some real value beyond just the capital they invest in those companies. They can bring knowledge and skills and more importantly they can bring a gateway to take those New Zealand products and really grow them in offshore markets. I think we sometimes look with far too much scepticism at companies that come to New Zealand and invest. New Zealand is a country born out of entrepreneurs and people with a number eight fencing wire mentality of doing things and we want to encourage that. 
The last point I want to make—if I can make it in the 37 seconds that I have available—is about the purpose of the bill. I think it makes sense. The purpose clause of the bill states that it is a privilege for someone from overseas to buy land in New Zealand and that when they do so they should meet and honour some criteria. One of the other things I heard when I sat on the Finance and Expenditure Committee was that all foreigners who invested in land in New Zealand were bad and all New Zealanders who invested in land were good. That is not true; plenty of New Zealanders actually stop access in any form to their land. But foreigners who come here do have to recognise that they are playing in our playground and that New Zealanders have a right regarding that situation. 
ROD DONALD (Co-Leader—Green) 
: 
 It is with some sadness that I speak to the title of this bill because the bill has gone in the wrong direction in the Green Party’s point of view and it has even gone in the wrong direction from the point of view of the Labour members who were on the 2001 select committee inquiry into the activities of the Overseas Investment Commission. In that inquiry the Labour members and the New Zealand First member backed a number of Green Party recommendations that would have tightened up the control on foreign investment in New Zealand whereas instead this bill actually liberalises the foreign investment regime. Yes there is the smokescreen that so-called iconic sites will be more difficult to buy but nothing in this bill will actually stop them from being purchased by overseas investors and there is now every encouragement in this bill for foreign investors to come in and buy up more of our land buildings and businesses. 
I think the complete removal of any land threshold in central business districts is extraordinary. It means that there will now be absolutely no control on land and buildings being purchased in the central business districts of Auckland Wellington and Christchurch. Dr Cullen has realised his dream which is to make New Zealand one of the most liberal foreign investment regimes in the world. This legislation makes us consistent with the United States’ requirements for a free-trade agreement with it and it brings us into line with what the multinational corporations have been pushing for under the General Agreement on Trade in Services. So the title of this bill really ought to be the “Overseas Investment Liberalisation Bill” because it does nothing to achieve the stated purpose which—as the previous speaker acknowledged—is to provide that it should be a privilege for overseas persons to own or control sensitive New Zealand assets. 
I have moved one amendment to clause 2 “Commencement” to ensure that no commencement date appointed by the Governor-General by Order in Council can take effect before 30 June 2006. That is to provide a cooling-off period if you like for the Government to think about the merits of this legislation or perhaps to give an incoming Government that is more progressive in its outlook than this Government the chance to amend this legislation. I think it would be entirely consistent for the Government to support that amendment because it dragged the chain over the amendments that Winston Peters managed to negotiate some time ago. They were not gazetted during the life of the National - New Zealand First Government nor during the balance of the period of National-led Government after New Zealand First left that coalition. To give some credit to Dr Cullen he did finally gazette those changes which have at least required farmland to be publicly advertised for sale in New Zealand before it is flogged off overseas—never mind how small the advertisement is. 
It is quite consistent with overseas investment legislation for the Act or regulations not to come into force straight after the Governor-General has signed them. So I would urge other parties to support delaying this legislation until at least 30 June 2006 to provide something of a cooling-off period—a buyer-beware period—so that the people of New Zealand do have the chance to vote on this issue at the election without the country being locked into a foreign investments regime that means basically that we are like the Wild West but with a sheriff who is working hand in hand with the outlaws rather than on behalf of the good citizens of this country. 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise to speak to clause 1 of the Overseas Investment Bill on behalf of the ACT party and I think that the bill is incorrectly named. It should be called the “Attack on Private Property Rights Bill” because one of the fundamental rights one has when one owns property is to be able to sell it but here the Government is claiming the right to dictate to citizens about who they can sell it to. 
 They have not actually given any reasons. Most of the speeches have been incoherent like Mr Donald’s speech in which he was talking about the good citizens of New Zealand versus the outlaws. What an amazing statement! He is prepared to claim that anyone who is not a New Zealander is an outlaw. If statements like that were being made overseas he would immediately condemn that as xenophobic but then with no shame at all he is prepared to make xenophobic statements himself and also demonstrate a complete lack of history. This country was actually built with overseas investment. This country was built by people who came and invested in this nation and we still need their capital and expertise today. 
I listened also with some confusion to Mr John Key’s speech because while he was attacking the Government in the Committee stage it appeared to me that the two old parties were voting together for this piece of socialist— 
Hon Member 
: The great coalition! 
Hon RICHARD PREBBLE 
: Maybe I misunderstood or maybe Mr Key did not know how his party was voting but it appeared to me that the two old parties were voting together for this legislation which is clearly a nonsense. Intellectually it does not stand up. It is correct as Mr Donald said that there are some clauses in the bill that will in fact result in some liberalisation. But there are other measures for which there is no intellectual or moral basis. If a person selling his or her land is required to provide a walkway for citizens and if that is desirable why are only foreigners required to provide that walkway and not people born in New Zealand? That is a complete nonsense. 
Dail Jones 
: That is the next step. 
Hon RICHARD PREBBLE 
: Maybe it is the next step. From the ACT party’s point of view if the community wants to own a piece of land then the community should pay for it. To just take it is communism. That is socialism. I am amazed—well actually I am not amazed. I would like to think that one should be amazed that the National Party is voting for such a measure but I am not because the National Party members were going around the country today saying they were opposed to attempts to take farmers’ land and then we have Nick Smith’s bill—and Nick Smith should actually be in the Alliance—which is a socialist measure. That was being put forward. 
The party that has been—and I think it would be fair enough to say this in the House—consistently in favour of private property rights does not believe in this type of intervention and says that it is morally wrong that this Parliament has no moral right to be placing restrictions on citizens’ private property rights— 
Gordon Copeland 
: That’s United Future 
Hon RICHARD PREBBLE 
: Well I have not actually noticed United Future being consistent on that matter. I think in fact the only party that has been consistent on that question has been the ACT party. I have looked at the minority reports and I do not see a minority report from United Future making a strong stand on behalf of private property rights. Indeed I have not been hearing such speeches on behalf of them. I hear Mr Peter Dunne making speeches on behalf of some sort of outdoor group that claims to have the right to trample over people’s private property rights. Am I right there Mr Copeland? 
Gordon Copeland 
: Fourth paragraph page 11. 
Hon RICHARD PREBBLE 
: Fourth paragraph page 11. 
Rod Donald 
: No heading. 
Hon RICHARD PREBBLE 
: Fourth paragraph no heading. What does it say Mr Copeland? 
Gordon Copeland 
: I have read it out to the House. 
Hon RICHARD PREBBLE 
: Oh the member has read it out to the House. Does the member want me to read it again? All I can say is that it is so pathetic I cannot even find it. What I am interested to know is and given all these speeches how is this bill going through? The National Party is opposed to it. The Greens are opposed to it. The United Party— 
Brian Connell 
: National is for it. 
Hon RICHARD PREBBLE 
: I heard Mr Key say he was opposed to it. Now if he is going to vote the way that he says he believes how can this bill be passing? There must be some extraordinary mathematics going on. 
BRIAN CONNELL (National—Rakaia) 
: 
 Thank you for a call on the title clause of this bill. One knows when one looks around this Chamber that a Government is on its way out when it is relying on people like the Greens who want to stop all investment in this country to come not into caucus but into Cabinet with it. Then it wants the same Cabinet to coalesce with the Maori Party which wants to send everyone out of New Zealand. The Government expects that it will then have the support of a nation and wonders why the tide is going out for it. 
Mr Prebble said he was confused. I cannot speak for Mr Prebble’s state of mind but what I can say is that if Mr Prebble had been here throughout the course of the debate he would have known that National was strongly opposed to the bill before Supplementary Order Paper 376 was tabled which precludes the Government annexing private property without even offering compensation. So with that cleared up I am sure that Mr Prebble will accept that investment in this country through foreign capital is what this country needs and to send signals that that is not important as the Green Party is doing supported by the New Zealand First Party would be totally unacceptable. 
Now we have some Luddites here who are trying to turn the clock back. After years of market reform through the 1980s and 1990s we now have a strong-performing economy that people want to invest in. That is a vote of confidence in this economy and we should embrace people who want to come to this country and invest here. Capital creates jobs prosperity and confidence. I tell Mr Donald and others that if we want to share wealth then first we have to create it and creating it depends on getting capital and on getting people to invest their hard-earned dollars in things like infrastructure and property. 
Dail Jones mounted an argument earlier in the debate that all investors coming to New Zealand are large companies and they are going to suck every bit of goodness out of this country. They are here just to rape and pillage. Well I have to say to Mr Jones that the vast majority of foreign investors in this country are not— 
Peter Brown 
: The member admits that there are some people of that view. 
BRIAN CONNELL 
: Well yes New Zealand First members are of that view. We are in agreement. 
The majority of investors who come to this country are small investors who come here to live and to invest their time and their money—they have kids—exactly the same as Mr Jones and Mr Brown did not so long ago. It is good enough for them but they want to chase everybody else away. Reasonable people know that in order for New Zealand to continue to prosper we need capital. Throughout the course of this debate I have given numerous examples where foreign capital has created infrastructure and jobs for hard-working New Zealanders. I do not think that people listening to Mr Jones talk about the people who have risked their capital to create jobs will agree with his argument that foreign investors do not create any value in New Zealand. That is an absolute nonsense. I know that when Mr Jones was saying it he had a smile on his face but unfortunately people listening across New Zealand cannot see the smile on his face and some—a very small number admittedly—might in fact take him seriously which would be a travesty. 
The other thing that has been noted throughout the course of the debate is that a number of investors have come here and bought high-country stations. Well that is a crime is it not? That is an absolute crime. The hysteria is that they will close all the roads up. 
DAIL JONES (NZ First) 
: 
 Having been drawn into the debate I could not resist a call and if I have a smile on my face it is because really the National Party just cannot understand what happens when people invest $50 or $100 million in New Zealand as the previous National speaker mentioned this afternoon. They invest that much money in New Zealand to take control of companies for the benefit of their overseas shareholders. They may export goods but they also export the profits. The profits do not stay in New Zealand. The profits go overseas. [ 
Interruption 
] Mr Carter and Mr Connell can laugh. Overseas shareholders want their money sent to them overseas. It is elementary. It is as simple as that but the National Party just cannot understand that situation at all. 
The National Party says “What about investment in New Zealand?”. New Zealand First supports New Zealanders investing in New Zealand products. The way we say that should be done of course is through the New Zealand Superannuation Fund—something the National Party opposed constantly and vigorously until it did one of its flip-flops and now supports it. But if we want New Zealanders to invest they have to save and one of the ways in which they save is through the superannuation fund. That is how one gets New Zealand investment in New Zealand businesses and how the profits are kept in New Zealand. What is bleeding New Zealand to death and will bleed New Zealand to death is that if the world economy changes all the money goes overseas in profits and does not stay here. We have seen it before in New Zealand on many many occasions in New Zealand’s fiscal history but the National Party just cannot see it at all. 
What we have here tonight is a clear example of the two old parties as Mr Prebble was saying searching for a coalition partner. When one thinks about it one realises that Labour’s best coalition partner on tonight’s performance is the National Party. I do not know why the commentators have not woken up to that. Mr Connell talked about the market reforms of the 1980s and the 1990s with the greatest enthusiasm. Those were the Labour reforms of the 1980s and the National reforms of the 1990s and now he wants to get in bed with the Labour Party. The polls show—and that is what he was looking at—that that is the only way the two of them can get into Government. One has to add up the two parties’ totals. If one adds either of them to any one total of the other parties neither of them can do it. Members know how much the Labour Party loves power and how much the National Party loves power and boy they will do just about anything to share that power or to have that power. 
Some of the commentators should look more closely at what is happening in this House especially on bills like this when members of each party talk about how successful the reforms of the 1980s and the 1990s were. Those parties are positioning themselves as they look at the way in which the leadership poll results change. Some people go up all the time and some people come down all the time. It is interesting to see how the National Party and the Labour Party are positioning themselves for a situation that might arise after the election. It is so important for the people of New Zealand to realise that if those two parties got together again as they did with the 1980s and 1990s reforms New Zealand will be in trouble. As I said the only way that can be prevented is by New Zealand First being two or three times stronger in this House after the next election. We were founded on the mistakes of the National Party and the Labour Party in the 1980s and the 1990s and I think that Mr Connell has given away the game tonight. 
PANSY WONG (National) 
: 
 Chairman Mao of former Communist China would have been proud to have Dail Jones as a member because in those times China closed its door to foreigners absolutely. Chairman Mao would have been proud to hear that speech from Dail Jones. I wonder whether Mr Dail Jones is also telling the public that New Zealand First does not want to be in power—as he has apparently just declared. New Zealand First has already declared itself to be in a permanent Opposition position. That is interesting. 
As a member of the Finance and Expenditure Committee I would like to share the views of some of the submissioners who came before that select committee who believe that this bill has gone too far. I particularly want people to hear from a very important group—and my learned colleague the Hon David Carter would agree—Federated Farmers. I think they put a very credible counter-balance to the overwhelming submissions opposing the bill that came before the select committee. They were very very anxious about the lack of overseas investment. Federated Farmers shared that with us. They are a very reputable group that we all know. 
Farming is the backbone of the New Zealand economy. They were saying that people build up a business in a farm through their lives so do we want to deprive them when they reach the well-earned retirement stage in their life of getting the best price for their hard work of building up their business? The Greens would Labour would and New Zealand First would because they want to shut out people’s options. Any New Zealand - owned businesses and landowners can sell to anybody. They do not have to sell to foreign investors. They have the absolute freedom to choose who they sell to. 
It is wrong for the Government to restrict that right—to artificially put in legislation and say that people should not be allowed to sell their hard-earned businesses that they have built up over a long period of time to the best offer. But what the Government does need to do is to introduce legislation that puts down criteria so that if overseas—or even domestic—investors want to purchase properties and businesses they will be subject to legislation and will have to conform to conditions. I think it is fair that people who enter a transaction should give an undertaking and be held to fulfil those conditions. That is why National has supported this legislation after the sensible Supplementary Order Paper to remove the creation of marginal strips without compensation was tabled during the Committee stage. 
I hope I have shared with the members of the Committee and also the public who are listening to this debate that it is a matter of striking a balance. No Government has the right to restrict New Zealanders who have built up a business or who own a piece of property from accepting the best offer given that the purchaser will have to fulfil a set of conditions. That is a pretty balanced outcome. 
It is a very emotive issue. A large number of submissioners came before the Finance and Expenditure Committee. I emphasise once again that a lot of those negative feelings were generated because they felt that the law was not being enforced. 
Hon DAVID CARTER (National) 
: 
 I rise to support the bill and to follow from Pansy Wong’s good contribution with another rationale before other members—particularly Dail Jones—speak as to why National supports this legislation now it has been amended. I refer to the process by which foreigners have the opportunity to buy land in New Zealand—[ 
Interruption 
]—and that for the benefit of Craig McNair is an absolute privilege. Having been lucky enough to invest in New Zealand they do so on the conditions imposed by New Zealand law and by the rules at the time of the Overseas Investment Commission. 
What I have found particularly galling are the many cases in which foreigners have been allowed to purchase in New Zealand under conditions imposed by the Overseas Investment Commission and then have completely thumbed their noses at the impositions imposed on them at the time they were given permission. I understand that this legislation significantly tightens the enforcement provisions. That is necessary because some foreign investors coming to this country have not been prepared to abide by the rules and the legislation that existed previously meant that it was difficult for New Zealand to do much about that. 
My second point is particularly in response to the very interesting commentary from Dail Jones when he argued that we do not need foreign investment and that there is suitable capital in New Zealand to provide all the investment capital that this country needs. I suggest to that man that he should get real. Capital in this world is in very short supply and New Zealand must develop by attracting capital. We know that New Zealanders have historically not been good savers and I do not see that in the foreseeable future they would ever be in a position to provide enough capital by themselves. In other words if we are to progress this economy foreign investment becomes essential. 
I refer now to some of the papers tabled before the Finance and Expenditure Committee which show that over the last 3 years the number of people interested in applying to invest in New Zealand has continually declined. That is something the Minister at present in the chair the Hon Dr Michael Cullen—the Minister of Finance—should take particular note of. He accepted my argument a minute ago that this country was in need of foreign capital. Therefore questions need to be asked as to why there was considerably more interest in foreign investment in New Zealand in 2002 than there was in 2003 while there was considerably more interest in 2003 than there was in the last year for which we have figures—2004. I suggest to Dr Cullen as the Minister of Finance that an issue associated with declining confidence in overseas investment is the legislative framework imposed by this country not only on foreign investors but also on New Zealand investors. I refer to issues such as the ratification of the Kyoto Protocol which we now find to be a miscalculation by Pete Hodgson of somewhere between $1 billion and $3 billion. 
Brian Connell 
: That’s good maths! 
Hon DAVID CARTER 
: The maths are fascinating in themselves but the really interesting thing is the risk that it now puts this economy in for future generations. I happened to see Pete Hodgson rambling on in a TV interview tonight saying that the reason the Government had ratified was for future generations of New Zealanders. He has now saddled New Zealand with such a huge international commitment that he is risking the very standard of living not only of future generations of New Zealanders but also of current New Zealanders. 
The other point I want to comment on is the fascinating provision that has been completely removed from the bill following its process through the select committee. It is the issue whereby the bill had suggested we should take the opportunity as part of the approval process for foreigners purchasing land of ensuring that public access is guaranteed by the creation of marginal strips. I have some sympathy for doing that. Provided it is upfront and explained to investors before they purchase in New Zealand it could become part of the rules that they fulfil for the privilege of being a landowner in this country. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 We have had three speeches from National Party spokespeople and I can say that I do not think any of them understand what they are talking about—not one. I listened very carefully to all three members and they advocate an open-door policy to anybody coming here with a suitcase full of money which will enable such people to buy anything they want. That is effectively what those members said. [ 
Interruption 
] Does the member disagree with that? 
Hon David Carter 
: Absolutely. 
PETER BROWN 
: Thank you. Then what— 
Brian Connell 
: Read the  
Hansard 
. 
PETER BROWN 
: I have read the member’s  
Hansard 
—well I listened to his speech. Let those members answer this question: are they prepared to put any restrictions on foreign capital coming in? 
Hon David Carter 
: That’s what this bill does. 
PETER BROWN 
: I know what it does. What those members are saying is that because we do not accept this bill and we are not drawing the line in the same place as they are then we are—what did the member call us? Was it “Mao Tse-Tungites” or something? The fact is that we are not drawing the line where those guys are drawing the line. Of the three speeches made by the members who are sitting there in sanctimonious glory Brian Connell was the winner. He made the most stupid speech of all of those members. He said effectively that people could come here buy the land and live anywhere else in the world. I say to members that if we go back a few years this was a high-wage economy in which one could afford to sell land knowing that New Zealanders could compete for it. But they are prepared to put land on the world market knowing that New Zealanders cannot compete for it. 
Brian Connell 
: Oh poppycock. 
PETER BROWN 
: By and large they cannot compete for it. There are a few who can compete for it but by and large the average New Zealander cannot buy a house or a farm in some areas of New Zealand if they are put on the world market and those members well know that. 
Brian Connell 
: Build a wall. 
PETER BROWN 
: I tell my good friend that we are not building a wall. He has already admitted that he wants some restrictions. We are just telling him that he has not worked out where the restrictions should be. 
Brian Connell 
: Build a wall! Keep them in. 
PETER BROWN 
: If the member says during the election campaign that he wants to enable anybody to come to this country and buy anything from anybody I will say to him that he has got it totally wrong and the average New Zealander will say to him that he has got it totally wrong. 
New Zealand First stands for restrictions and controls on people who want to invest here. We say that unashamedly. We have seen this country sold to the lowest bidder—let alone the highest bidder—and members opposite were part of it. That crowd—despite saying that no ifs buts no maybes they would change the lot—carried on. In 1984 $16 billion worth was sold in this country. Can members tell me one benefit that we have got from that? We have had to buy back our airline and our railways. 
Hon Richard Prebble 
: No we didn’t. We didn’t have to buy it back. 
PETER BROWN 
: At least one member realises that we did not have to buy it back but if we wanted it we had to buy it back. 
We could have let Air New Zealand go to the dogs. We could have let Tranz Rail go to the dogs. It might be too late—it might have already gone to the dogs. The crowd sitting behind me here are saying: “Let ’em come in. They’ve got a suitcase of money let ’em come in and they can buy anything we have for sale.” I had thought that the Labour Government had learnt from its experiences. Clayton Cosgrove puts his hands up. He may treat this as a joke but I can tell him that there are many people in his electorate who will agree totally with New Zealand First. They are sick and tired of someone planting a for sale notice in the land of New Zealand and saying: “Come here and buy it.” 
It may not have been Richard Prebble but I have certainly heard ACT members say that the land cannot go away. Dr Cullen said that the land cannot go away but for the average New Zealander in many cases that is just what happens. It goes away. It might as well be 12000 miles away as average New Zealanders will not be able to afford to compete on the open market. 
Hon Dr Michael Cullen 
: When did the average Kiwi own a high-country farm? Ha ha! 
PETER BROWN 
: The member laughs. He might laugh a little bit later when he gives the low-paid people their 67c and tells them to go and buy the land they want and have saved up for when foreigners come in and buy it at some exorbitant sum. I can tell the Committee about a situation where a house was sold on the Internet at three times its value. 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 46 
New Zealand National 19; New Zealand First 13; ACT New Zealand 6; Green Party 8. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 28 
New Zealand First 13; ACT New Zealand 6; Green Party 8; Maori Party 1. 
Clause 1 agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 2 be agreed to: 
to insert in subclause (1) after the words “Order in Council” the words “but not before 30 June 2006”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 27 
New Zealand First 13; ACT New Zealand 6; Green Party 8. 
Noes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 28 
New Zealand First 13; ACT New Zealand 6; Green Party 8; Maori Party 1. 
Clause 2 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the Overseas Investment Bill be now read a third time 
. The Overseas Investment Act has not undergone a thorough review since it passed in 1973 and I thank members of the House for their cooperation in progressing this important bill through the House. I particularly want to thank the members from ACT the Green Party and New Zealand First who demonstrated how powerful the arguments in favour of this bill are. 
At the commencement of this long-overdue review two objectives were identified as being of paramount importance. These were to ensure the regime focused on sensitive assets of critical interest and to further reduce compliance costs in areas where that is feasible. The bill does that. Indeed the second part of that has not been focused on at all during this debate. 
I want to say quite clearly that it is critical for the future of this country and for our social and cultural development that we have a welcoming and open attitude towards inwards foreign direct investment. Indeed I have to point out that today the Government announced new rules for the entrepreneur category and it was attacked by the New Zealand First leader in his first press statement as being an attack upon inward-bound investment by foreigners. It is true that 45 minutes later he put out another press statement saying we were simply pinching New Zealand First’s policy but nevertheless his first statement showed that party’s confusion on the issue of inward-bound investment. If this country relied on its own capital resources alone we would not just not grow; this economy would shrink because our investment levels would be insufficient to maintain our current level of economic activity. It is a bit like Arsenal which had to bring in a Frenchman to be a decent coach because it could not find anybody from its home area—I remind Peter Brown. 
The second point I want to make is about this issue of reducing compliance costs. Today I have been going through as usual some Overseas Investment Commission recommendations on purchases. What the members opposite who voted against this bill might need to know is that the largest single category of investment that I have to approve at the moment under the law relates to for example—today—the purchase by a supermarket chain which is foreign-owned of 1¼ hectares of land for a new supermarket in a small North Island town simply because the land backs on to a drainage reserve or something similar. 
Clayton Cosgrove 
: Iconic drainage area! 
Hon Dr MICHAEL CULLEN 
: Yes an iconic drainage reserve no doubt—in Dargaville if one could imagine such a thing being possible. That requirement is stupid. It is stupid that we have a Government agency going through such stuff and Ministers’ time being consumed in approving things of that sort. This bill wipes out the requirement for approval in that kind of case. I have to approve time after time redevelopments in terms of urban subdivisions because the initial purchaser of the land for subdivision is a Singaporean company and again if it is a large subdivision the chances are that it backs on to a recreation reserve or a drainage reserve. And those subdivisions are going to be sold off to New Zealanders at the end of the day but we have to have Overseas Investment Commission approval for that to go through. It is a nonsensical piece of compliance cost and business cost which we need to strip out of the system. 
I make no apology for driving this measure through the policy process and driving it through Parliament. I thank those parties that have supported it for their sanity in that respect because bluntly I have to read through all the pages of these reports—although having read the first page I have pretty much come to a conclusion—before I go any further. I am grateful that Ministers in the future will not have to do that kind of silly stuff. 
Simon Power 
: We’re here to help. 
Hon Dr MICHAEL CULLEN 
: Indeed and we appreciate that help when it comes rarely from the National Party; a party of course that celebrates the fact that it is only 4 percent behind in the opinion polls which is a sort of interesting commentary on the modern National Party. 
Then we come to the issues of sensitive land. What Peter Brown tells us—from that vast North London farming experience he comes from; those broad acres of high-country sheep farms in Highgate which are actually his background or in Baskerville Hill or wherever it was that he comes from—is that somehow or other because foreigners have been allowed to purchase New Zealand land the ordinary average Kiwi bloke can no longer buy a high-country farm. As we all know in that good dim distant golden age of the 1950s good average Kiwis down there in Sydenham could go down to the good old Post Office get the 3 percent loan and go off and buy themselves a decent property somewhere around Cromwell or Queenstown or wherever it might be and sadly that is no longer true. 
 It is a bit like those people who write in the  
Listener 
—the true magazine for those with memories of the 1950s that are somewhat rose-coloured—that no longer can the average person own a seaside bach. Well actually in the 1950s it was always the middle class that owned the seaside baches; it is just that the seaside baches have become a lot bigger and more posh in the last 50 years than they used to be and cost a lot more to buy. I grew up in Burwood and people there did not have seaside baches. It was the people in Fendalton and Cashmere who had them. So let us not weep for a golden past that never was which has always been the basic foodstuff of populist parties. 
This bill gives us the capacity when considering those applications to ensure that we can address a range of important issues such as access conservation values historic values and so on and that is very very good indeed. It can turn into a win-win situation. 
Let me also make this point because I am sick and tired of both the Green Party and articles in the  
Listener 
 getting a fundamental point wrong. When foreigners purchase New Zealand land they are subject to New Zealand law in every respect just like a New Zealander is. They do not have a separate Resource Management Act regime. They do not have a separate regime in any other sense. The people who are fighting improved land access up sensitive waterways for recreational purposes are not a bunch of foreigners; they are fifth-generation Kiwi farmers most of whom inherited their properties. Let us be clear about where the problems are in that particular respect. I have no time at all for this golden age rubbish and this strange xenophobia that insist that a New Zealand - born landowner is somehow kinder to New Zealanders than an American a Canadian or some other landowner might be. We have a damn sight more chance of tramping our way across Shania Twain’s property than we have of tramping across those owned by New Zealanders in that particular area. What is more she can sing a damn sight better than most New Zealand landowners can and if I am allowed to say so in these PC days she looks a damn sight better than most New Zealand owners. [ 
Interruption 
] 
I knew that would upset New Zealand First. It is not for me to mention that Craig McNair that great New Zealand nationalist worked for United Airlines flying the friendly skies on behalf of Americans and is an American citizen. It is not for me to mention these facts about our comrades opposite—Peter Brown that well-known North Londoner like myself; Dail Jones who was born in Pakistan. My friend opposite is still trying to be quite sure about where he came from in the first place. We have all these sorts of things going on from these latter-day converted Anabaptist New Zealanders over there. 
The final point I want to make is that the bill transfers the administration of this very strange Overseas Investment Commission which has a board comprising four people and about five employees into Land Information New Zealand which will have the capacity to do the follow-up work. The bill improves enormously the penalties regime so that we can actually enforce the conditions that are imposed which we have had great trouble doing in the past. I think this is very good balanced legislation. I thank those members who have supported it with coherent arguments. I thank those members who have opposed it with incoherent arguments. 
PANSY WONG (National) 
: 
 The Minister of Finance is certainly enjoying himself! I invite him to treasure the dying moments of his role as Minister of Finance because our good member John Key is waiting in the wings to take over. 
As a member of the Finance and Expenditure Committee let me share with the House some of the proceedings at the select committee. [ 
Interruption 
] The chairman calls out; I hope Clayton Cosgrove is going to take a call because we have not heard enough from him. He must be falling short of being a favourite member over there. I have to share with the public that overseas investment is a very sensitive topic. Many many submissioners came before the Finance and Expenditure Committee showing signs of anguish and insecurity at the loss of control of New Zealand business particularly farmland and scenic icons. Part of that unfortunately was brought about because of a few very high-profile cases; the public perceived that the enforcement agent did not do its job did not hold the overseas investors to fulfil their purchase conditions. I think some genuine grievances have been caused by the enforcement agent the Overseas Investment Commission not enforcing the law. 
The enforcement agent assured the Finance and Expenditure Committee that that was due to the fact that it does not have a set of effective tools to monitor the situation. I raised this issue in the Committee stage with the Minister of Finance. I am still not happy with some of the wording in the legislation: the regulator “may” require information to enable it to monitor those investments; it “may” ask for information. I am assured by the Minister of Finance that the Overseas Investment Commission or the regulator—which from now on is to be transferred from the Reserve Bank to Land Information New Zealand—will use this legislation to enforce the conditions that the investors agreed to. 
To say that some of the arguments offered by New Zealand First were entertaining is to be charitable. The New Zealand First member seemed not to understand that successful people who invest in business do not want to dismantle the business do not want to lock up the business. They want to expand it. If they make an investment they want a return. When overseas investors purchase a business in New Zealand they employ people they use consultants and they purchase supplies from New Zealand. If the business makes a loss they have to take that loss. If it makes a profit—why not? I do not think New Zealand wants to be known as a country where every investment will return a loss. Of course we want to show New Zealand as a country where people who invest will find it profitable. They will pay their fair share of tax because we have tax legislation; we have legislation that all businesses have to comply with. 
But there is another issue that we have to think about. I am sure that Peter Brown would take another call in this third reading. What if the Government passed a law to say that Mr Brown is allowed to sell his property to a certain sector only or is not allowed to sell his property to anybody— 
Ron Mark 
: What does China do now? 
PANSY WONG 
: Well actually I have just complimented Dail Jones. He would have been a proud member of Communist China under Chairman Mao. Chairman Mao would have been proud of Dail Jones and the New Zealand First members’ speeches. 
Ron Mark 
: What does China do now? 
PANSY WONG 
: I am not too sure why that member keeps asking me about Chinese legislation. I can answer that I know New Zealand law much better. The member consistently has a problem. That member of Parliament apparently is not interested in what is going on in New Zealand. I feel really happy that New Zealand First takes so much interest in China and is pro-Chinese and pro-China. What a wonderful thing to discover tonight. One can always discover something. New Zealand First is pro - Chairman Mao and pro-Chinese. I think that is a wonderful discovery. 
The only complication in the passage of this bill was self-imposed by David Parker. At the select committee David Parker had this great idea about how to lose his seat of Otago to National’s Jacqui Dean. Jacqui Dean will be a great member in the next parliamentary term. David Parker introduced a provision to create marginal strips around sensitive land such as lakes and rivers. But there is a problem. Labour wanted to create a marginal strip and give no compensation. Members should just imagine that a New Zealand landowner is trying to sell a piece of land from his or her farm to an overseas investor when suddenly a marginal strip is imposed on the property. How would that affect the selling price? David Parker seemed to think it does not matter. And I was told he is a lawyer! That is when I thought that maybe the next Parliament should welcome in more accountants and economists. Maybe they would understand the issue better. 
At this stage I acknowledge that at least United Future woke up to that even if belatedly. Its members said in the select committee that they did not like it but they were not prepared to stand up for their principles at that point in time and they let the bill go through the select committee. But belatedly they did closed-door negotiations with Labour and Labour has backed off from the provisions to take a marginal strip without compensation. 
I finish by sharing why National can see some point in marginal strips being imposed on land purchased by overseas investors. My good colleague the Hon David Carter said that overseas investors might not understand that under New Zealand culture landowners allow access by the public particularly to iconic sites. Marginal strips can be justified on that basis but imposing them without compensation is simply not acceptable. 
We welcome the introduction of the Supplementary Order Paper amendment that removes that draconian provision of creating marginal strips without compensation and now National will support the passage of this bill. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I rise to meet the challenge of Mr Simon Power and to support the bill as the chair of the Finance and Expenditure Committee which considered the bill. I draw on a couple of points. This is a good bill because as Dr Cullen said it tightens the enforcement regime in respect of the purchase by foreigners of New Zealand lands and other assets and investments. 
I want to touch on one thing which is that the Overseas Investment Commission will now be absorbed into Land Information New Zealand. This is a good thing because as the Minister pointed out the commission has a staff of about five. Once it goes into Land Information New Zealand of course there will be a greater resource of personnel who will be able to enforce the provisions in the agreements that are put in place for overseas investors. 
One of the biggest concerns from submitters to the Finance and Expenditure Committee was that when overseas purchasers come to do the deal to build the lodge or whatever to employ X number of people and to create economic growth and wealth those commitments are not necessarily met. I think that concern has historically been quite valid. One of the committee members Janet Mackey pointed out that there was an investment in her patch where those commitments as written in the agreements had not been met. I think even the odd member of New Zealand First—or one member—would agree with that. Historically overseas investors have come over and invested said they will employ people and said they will create jobs. They have done the deal if you will but have not lived up to the obligations. The feedback we got from a lot of the Kiwis who came to the committee was that they do not mind overseas investment but if overseas investors are obligated to do certain things then they should do them. So this bill seeks to tighten up that enforcement mechanism. 
I see that the Greens are opposed in their minority report to the Overseas Investment Commission being absorbed within Land Information New Zealand. I have to ask why. Land Information New Zealand has more people more resources and more specialists to enforce agreements—to stomp the country if necessary and ensure that investors have lived up to and are meeting their obligations such as employing people building the lodge creating some jobs and creating some wealth for the country. I would have thought it was difficult to argue against those tighter enforcement measures. 
Then we have New Zealand First which is opposed to any purchase by any foreigner of any asset investment or land in New Zealand. As the Minister pointed out that is totally illogical. The last one out switches the lights off if we call a halt to any international investment in land in this country. The New Zealand First members say no. Again I think most Kiwis would not agree with them. 
This bill in total seeks to lessen the bureaucracy. It seeks to lessen day-to-day ministerial intervention in minor land purchases—over whether someone can purchase a piece of land to put a supermarket on as the Minister said. I think this is a good bill. The Finance and Expenditure Committee members on both sides worked very very hard to try to meet some of the concerns that New Zealanders put up. I think citizens in this country do not mind foreign investment if obligations are met by the investor. One of the things the committee has been at pains to do is to ensure that there are mechanisms in the bill that will meet that. 
I conclude on one other point. There was a bizarre occasion at the committee when the Green member Rod Donald put up the following proposition. Say a foreign investor bought a flour mill—I think that was the example Mr Donald used—and then the market for flour went belly up. That investor was obligated to employ people to grind and produce flour but could not meet those obligations because the market had gone belly up. Mr Donald said that if the foreign investor wanted to close the factory down and turn it into a different business—a shoe-making factory for example—it should not be allowed. I have a couple of colleagues here who were on the committee and I have to say that we found that proposition rather bizarre. 
This is a good bill. It meets a lot of the concerns that New Zealanders have and I support it. 
CRAIG McNAIR (NZ First) 
: 
 In speaking in the third reading debate of the Overseas Investment Bill I point out to the House that apart from the Government which has to keep its numbers up New Zealand First is the only Opposition party that has been keeping its numbers up and it is the only Opposition party that is truly passionate about fighting against the Government on this bill. The National Party has been voting at about 19 or 20 all day long. The Greens ACT and United Future are voting down at about five. It is just ridiculous that they get up in this House and say how passionately they are against this bill in so many ways. The National Party which has been saying how bad the bill is went and voted for it. What they are doing—and my colleague Dail Jones alluded to this earlier—is positioning themselves for a coalition. The National and Labour parties are showing New Zealand that they really are together on these issues and that they really are in unison as far as foreign ownership is concerned. The chairman of the Finance and Expenditure Committee Mr Clayton Cosgrove has not been here all day as we have been speaking to this bill. He is in the same boat as the other parties and is just as bad as the other parties that were voting down— 
Simon Power 
: I raise a point of order Madam Speaker. I know that Mr Cosgrove does not need my assistance on these matters but it is completely contrary to the Standing Orders for a member to refer at any time to the absence of any member from this Chamber. The member should be reminded of that. 
Madam SPEAKER 
: I thank the member. He is quite right on that. Perhaps the member would like to address the bill. 
CRAIG McNAIR 
: I appreciate your ruling Madam Speaker as far as that is concerned but I felt I was addressing the bill in the sense that New Zealand First is the only party that has voted consistently with its full numbers all day long. It has been putting its money where its mouth is. 
Gordon Copeland 
: I raise a point of order Madam Speaker. I know that in this Chamber the convention is that we cannot question a member’s word but it will clearly be recorded in  
Hansard 
 of course that United Future has consistently voted 8 which is our number of members all day. 
Madam SPEAKER 
: That was not a point of order but it was an interesting point of information. Maybe we could get to the substance of the bill if the member would like to continue. 
Peter Brown 
: Speaking to the point of order— 
Madam SPEAKER 
: I have ruled on the point of order but if it is a new point of order— 
Peter Brown 
: I raise a point of order Madam Speaker. I just draw the House’s attention to the fact that the honourable member is not in the Opposition—he actually supports the bill. 
Madam SPEAKER 
: I am sorry; this is getting a little silly. Let us get on with the substance of the debate please. 
CRAIG McNAIR 
: In terms of National and Labour—Tweedledumb and Tweedledumber—being the same and joining together in coalition on this issue I have to say they are not voting together just on this bill. The Hon Dr Nick Smith from the National Party has put up a member’s bill—it is in the Local Government and Environment Committee at the moment—that basically makes the same amendment that David Parker has tried to implement into this bill. David Parker probably agrees with me on that. It is basically the same issue. That was one issue in this bill that National said it would vote against but a member of National has put up a bill which National has voted for that makes basically the exact same amendment that David Parker has put up. [ 
Interruption 
] I say to Mr Parker that New Zealand First voted against that. New Zealand First does not change its position for political expediency. We do not do those kinds of things. Mr Parker put forward the amendment probably after the call-up from Michael Cullen and the spin doctors up on the ninth floor. They would have said that Labour was in trouble on this bill and that they needed to put their heads together to make it at least look as though they were trying to be tough on foreign ownership and trying to protect New Zealanders and New Zealand’s interests. They decided to have a look at Nick Smith’s bill. David Parker thought he would tweak it a little bit and tinker with it so that it could be slightly different then Labour chucked that in this bill. It is quite ironic that National and Labour—Tweedledum and Tweedledee—are joining together and doing the same thing they did in the 1980s and 1990s. It is just like when they jointly sold $16 billion worth of State-owned assets and $10 billion per year in profits went overseas. The National and Labour members think that that was a great thing for New Zealand. 
I want to say one other thing about David Parker’s amendment. Whether or not one agrees with the amendment—Richard Prebble will probably agree with me; he can tell me whether he does or whether he does not—the fact is that Labour should have decided whether it would let foreign investors into our economy or buy certain pieces of land. It should have made up its mind and decided—yes or no. But it did not. It has tried to find this halfway house—this kind of “Mugabe amendment”—and say to foreigners that they can come in and buy our land but that the Government will take a little bit of it back. It should decide—yes or no. That is what I am saying. That is what this Government has tried to do. That is what the National Party is trying to do with Nick Smith’s bill. National members are trying to say that they do not agree with this but they do because they have shown their true colours in Nick Smith’s bill. 
I want to highlight another issue. It takes us back to the first reading debate when the Labour member Dover Samuels the member for Te Tai Tokerau talked about this great utopia this great amazing thing that is going on in Northland. Foreigners are coming in and buying golf courses up in the far north. He was saying how great it is because they are employing Maori to mow the lawns and cut the trees and hedges. He thought that that was a great thing. As I was hearing that I could not believe it. Labour wants to make New Zealand a little Mexico. That is what this Government wants to do. This Government along with the National Party and other parties in this House want to subject the people of the far north—the people whom Dover Samuels represents—to being just the hired help. That is what they want to do. That is just what happens in Mexico City. 
I flew into Mexico City myself quite a few times a few years ago. We saw Mexicans running around in their little Coca-Cola vans and big beautiful Coke signs were all around the place. Those Mexicans were earning 50c an hour—and where did the money go? It went straight back to the United States where the wealth is. That is what this Labour Government and the National Party—Tweedledumb and Tweedledumber—want to do. That is what they are proving with this bill. They are showing it to the people of New Zealand. The Government has come up with some stupid amendment—some “Mugabe clause”. It is in the name of Michael Cullen but we know that David Parker pushed it. It is some kind of “Mugabe clause”— 
Madam SPEAKER 
: I am sorry; I must intervene here. I understand that offence has already been taken at a reference to Mugabe in a previous speech in the debate. I ask the member to withdraw that. 
CRAIG McNAIR 
: I withdraw. I am trying to say without using the exact name of that person that Labour is basically trying to— 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. I am sorry but I am having great difficulty understanding that particular ruling. The member said that the amendment was a “Mugabe clause”. Are we protecting Mr Mugabe by not using that phrase because he is another member of the Commonwealth? Is that the reason for the ruling? 
Madam SPEAKER 
: No the reason for the ruling is that previously in this debate offence was taken by a member at a reference to Mugabe and the member who made that other reference was asked to withdraw it. So in the interests of consistency it seemed to me that that was appropriate. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. It is a new point of order. I would really like you to think about it because it appears to me that one can describe a clause of a bill in the strongest possible terms. It seems to me that a member could describe a clause as being a “Mugabe clause” and that it would not be out of order to say that an honourable member is supporting a “Mugabe clause”. What would be out of order is to say that an honourable member is a Mr Mugabe or is a Nazi or something. But to say that the clause is a “Mugabe clause” appears to me to be valid. I raise this because I think it is quite important to be able to do that. In fact I disagree with nearly all of Mr McNair’s speech except the statement that the clause is a “Mugabe clause” and I think the honourable member should be allowed to say that it is. 
Madam SPEAKER 
: I thank the member for that comment. If Mr McNair had just left it at that it would have been fine. But he linked the remark with a specific member and that member had previously objected to that reference. If Mr McNair had just left it at that you would be quite right and I would not have intervened. I ask the member to continue. 
CRAIG McNAIR 
: This is the kind of outrageous bill we are talking about. I want to finish up with what United Future and Labour voted for in the commentary on this bill which states: “The majority does not consider it necessary that all of the overseas investors involved in a particular transaction have relevant business experience and acumen.” Further down it states: “Such an appointment may be made to recognise local customary roles and traditions”. This is the kind of craziness that we find in this bill. There are no rules. The Government does not care who comes in. They will find any excuse to let whomever in. That is what this Government is all about. That is what this Government and the National Party—the coalition parties Labour and National—are doing with this bill. New Zealand First says it is outrageous. 
DAVID PARKER (Labour—Otago) 
: 
 It will take less than 30 seconds to show the illogicality of the previous speaker’s statements. He criticised amendments to the bill that would have imposed preconditions on eventually permitted sales to overseas parties as being improper but he backs the total prohibition of the same sales. New Zealand First backs the total prohibition of sales of rural land to foreigners yet it opposes the imposition of conditions relating to access. The two positions are irreconcilable. That took 30 seconds. I support the bill. 
Hon RICHARD PREBBLE (ACT) 
: 
 I am sorry that Mr Parker did not take longer. It is not often that one gets an opportunity to speak at one’s own funeral and I think he should have taken it. 
Jill Pettis 
: Oh! 
Hon RICHARD PREBBLE 
: Oh this bill most certainly is Mr Parker’s funeral. Here is a member who is so ideological he does not understand what is in the best interests of his own constituents. I do not know whether Mr Copeland would like me to quote him so perhaps I will not but I will say that other members have questioned whether Mr Parker is aware of the fact that property values in his electorate have gone up because people have been able to sell their land to whomever they want. The passage of this bill will damage not just one person who was unable to put through a property sale; it will damage the value of every property in Central Otago. We need to ask on whose behalf Mr Parker thought he was acting. That is his first problem. 
His second difficulty is that he was prepared to support an amendment whereby the State would take away property without paying compensation. That is one of the criticisms that is made of Mr Mugabe. Indeed I am sure Mr Parker is aware of that and I am certain that when it comes to Zimbabwe he is strongly opposed to the actions of Mr Mugabe. That is the contradiction that has been drawn to his attention. He has managed with this bill to offend every single constituency. He has offended the liberals the conservatives and those who own property—he has managed to offend everyone. I understand that the National Party has a rather good candidate in his electorate. I cannot remember her name but I am told she is pretty good. 
Brian Connell 
: Jacqui Dean. 
Hon RICHARD PREBBLE 
: Her name is Jacqui Dean. I am sure she would not take just 30 seconds. Then again given Mr Parker’s position 30 seconds was probably the longest he could speak without making a further fool of himself. 
David Parker 
: 1.8 percent. 
Hon RICHARD PREBBLE 
: The member thinks that the truth of a proposition is in its polling numbers. If that is so then he will accept his defeat with grace will he not? 
Let me turn to the bill itself. Firstly the Minister of Finance is correct in saying that some provisions in the bill bring about some liberalisation. The law at present requires Ministers to plough through proposals that everyone knows will be agreed to. Who thinks a supermarket in Dargaville is a bad thing? Only someone who does not live in Dargaville or in another area without a supermarket would think that not having one was a good thing. 
Brian Connell 
: Woolworths did. 
Hon RICHARD PREBBLE 
: The supermarket operator’s opponents may object but apart from another supermarket operator everyone would agree that such a proposal is desirable. It is desirable to have a law that does not involve that sort of nonsense. But having said that I must say that a great deal of this bill is completely irrational. The ACT party finds itself opposing the bill not for the reasons given by New Zealand First which are frankly xenophobic— 
Rod Donald 
: I’m not. 
Hon RICHARD PREBBLE 
: The Green member interjects—and I am not objecting to that—to say that he is not xenophobic. I hate to break it to him but in fact the Green Party has expressed exactly those sorts of sentiments. I join with Mr Trotter in saying that it is a great disappointment to see that a party that was elected to this Parliament as a green party on environmental issues has decided that it wants to keep itself here by making ridiculous xenophobic statements against foreigners and suggesting that foreigners and foreigners alone are somehow an attack on the New Zealand environment. 
I say to Mr Donald that overseas investors actually have a better record than New Zealanders on a whole range of things. Let me give just one example which New Zealand First may identify with. We had a case known as the wine-box case in which a number of companies entered into a number of interesting arrangements to get out of paying taxes. Not one of those companies was an overseas company. All of them were New Zealand companies. 
Gordon Copeland 
: Including State-owned enterprises. 
Hon RICHARD PREBBLE 
: Of course—State-owned enterprises are well known for trying to avoid tax. When I was the Minister for State-owned Enterprises I discovered that a number of State-owned enterprises had gone into the sorts of tax arrangements that made the wine box look like nothing at all. 
The point I am making is that overseas investors tend to be much more careful about obeying the law. There are some quite logical reasons why they should be. Just because a large number of submitters came before the Finance and Expenditure Committee and said that overseas investors do not obey the law does not make it true. Repeating a lie does not make it true. The evidence shows that overseas investors follow our laws. The evidence shows also that New Zealand is a much wealthier country today as a result of overseas investment. Dr Cullen is absolutely right—New Zealanders do not save enough. If we were to follow the logic of New Zealand First and the Green Party this country would be much much poorer today. I tell Mr Donald that there is no doubt about that at all. 
Rod Donald 
: I agree. 
Hon RICHARD PREBBLE 
: Mr Donald now says we should save more. He thinks that by preventing overseas investment coming here somehow we will be able to pull ourselves up by our own bootstraps. That is nonsense. 
Firstly the ACT party is opposed to restrictions on private property. If one owns a property one ought to be able to sell it to whomever one chooses not just to those to whom Mr Donald and Mr Peters think it should be sold. 
The second thing is this. We already have in this country a Securities Commission monopolies laws and a Companies Act. We have no shortage of regulations and controls that exist on investment. No case has been put up by any member including those from the Government or the National Party as to why there should be extra restrictions on people just because of their passport. No such argument has been raised and that is why the ACT party is totally opposed to the bill. 
We can see absolutely no reason for it and it is a matter of regret that the bill can go through only because the two old parties support it—for electoral reasons I think not because they believe it. Dr Cullen does not believe in the bill and John Key certainly does not believe in it. The bill will go through because the two old parties looked at the polls and saw how well Mr Peters does in his anti-foreigner rants—helped by the Green Party which is disgraceful in the case of that party because at least it is a party that claims to represent principle; Mr Peters never hides the fact that he is a straight-out populist. The two old parties are pandering to the fact that there are many people in the country who have an irrational fear of foreigners. Shame on both those parties. 
That is the reason why the ACT party is voting against the measure. We do not actually need it. 
ROD DONALD (Co-Leader—Green) 
: 
 The Green Party is opposed to the plans of Labour and National to make it even easier for foreign investors to buy up our land our buildings and our businesses. We are not alone. Most New Zealanders remain opposed to the sell-off of businesses like Telecom New Zealand and Contact Energy to foreign investors. Most New Zealanders can see what a mess our rail network ended up in after foreign investors milked it dry. Most New Zealanders are not happy that more and more iconic land such as Young Nicks Head is being bought up by foreign investors who treat our country as a plaything. Young farmers are upset that the dream of owning their own farm is receding because increasing overseas investment means farmland is being priced out of reach and beyond its agricultural earning capacity. Holidaymakers are finding that their favourite camping spots at the beach are no longer there because foreign investors have bought them up and built their mansions where Kiwis used to play. First home buyers are being deprived of their dream of owning their own home because foreign investors are outbidding Kiwis at the bottom end of the property market as well as at the top. 
So much for Labour’s ownership society. Any assistance the Government provides first home buyers fades into insignificance when one considers that property purchasing power which is measured in terms of average house price versus average wage is half what it was 25 years ago. That is because foreign capital has artificially inflated house prices and that foreign capital has also driven up New Zealand’s current account deficit which has made mortgage interest rates 1 to 2 percent higher than they otherwise would be. This double whammy is a direct result of the liberal foreign investment regime of National and Labour. 
It is extraordinary that this Labour Government is proud that New Zealand has such a liberal regime. Dr Cullen said so in New York last November. That position is in stark contrast with the statement of Labour leader Helen Clark on 4 June 1995. Then she said: “Labour would be strongly opposing the National Government’s efforts to liberalise restrictions on the foreign purchases of New Zealand land.” She also said that the Government of the time—a National Government—was completely out of touch with the strong views of the overwhelming majority of New Zealanders who considered that encouraging more foreign purchases was unacceptable. As far as the Green Party is aware—and that is backed up by the 7000 people who signed our petition calling for tighter rules on foreign investment—New Zealanders are just as opposed to increasing land sales to foreign buyers as they were 10 years ago. Now it is the Labour Government—not a National Government—that is out of touch and is pushing an unacceptable agenda on to the public. 
We can only speculate—and I will in a minute—as to what has induced Miss Clark to change her mind so radically on this matter. In the Green Party’s view she was right then and she is wrong now. Indeed there is even more reason to be opposed to increasing foreign ownership as the last 10 years’ bitter experience can attest. Only yesterday Dr Cullen admitted to the Finance and Expenditure Committee that it would cost the taxpayer much more than the $200 million already allocated to fix the rail network which was left in a decrepit state by its former foreign owners who ran down the network milked all the profits they could and took the money and ran. Surely that costly experience should be enough for Labour to understand that New Zealand’s foreign investment rules are not tight enough. 
The so-called good-character test is a sham. Foreign buyers of businesses should have to meet at least the same national interest test that foreign land buyers need to pass. If companies like Juken Nissho had to sit even the weak national interest test we have now they would fail. Juken Nissho operates wood-processing plants in Kaitaia Masterton and Gisborne. It has a horrifying health and safety record. It had 269 serious harm notifications from 1995 to 2003 and 11 convictions under the Health and Safety Act with fines ranging from $6000 to $10000. In 1997 Juken Nissho was prosecuted for exceeding permitted emissions at its Kaitaia plant. There are numerous complaints from neighbours about the effect on their health. An analysis of Juken Nissho’s New Zealand accounts from 1999 to 2003 shows that it reported losses and paid no tax. It was totally debt-financed and under normal circumstances it would be insolvent. Many of the company’s transactions appear to occur through related parties and may provide a way to shift profits offshore and to avoid tax. 
So why does Labour want more investment from companies that behave so badly? Why does Labour refuse to introduce a code of corporate responsibility that would hold the Juken Nisshos of this world to account? A responsibility code for foreign investors is neither a radical idea nor a new one. New Zealand is already a signatory to the OECD guidelines for multinational enterprises. Indeed our Government has undertaken to promote the guidelines although there has been little noticeable activity. This is unfortunate because the June 2000 revisions contain in the words of Australian Treasurer Peter Costello who was chairman of the ministerial committee “far-reaching changes that reinforce the economic social and environmental elements of the sustainable development agenda.” Given that the Government endorsed those OECD guidelines at the time the Greens believe that the Government should incorporate them into even more explicit legislation that must also include penalties—and not the light-handed ones in this bill—for corporations that do not meet their responsibilities. Those penalties should be serious so that corporations that do not meet their responsibilities are held to account. 
Labour will not do what most of its own supporters want because it wants to keep onside with the big boys’ club rather than with the citizens of New Zealand. That is clear because we know from the General Agreement on Trade in Services negotiations that a major demand of our trading partners is for us to scrap the Overseas Investment Commission. That is exactly what the bill does and it will allow foreign firms and individuals almost unrestricted access to New Zealand property and businesses. So the big boys’ club will be happy as will the United States which made it clear in its free-trade negotiations with Australia that it wanted to reduce or eliminate restrictions on overseas investment. If the United States wanted it for there it will want it for here as well which means that Labour is in a better position to do a deal with George Bush and to cuddle up to the Americans for a free-trade deal. 
In the meantime we should not forget that foreign investors already control half of the New Zealand sharemarket that 41 of the top 100 companies operating in New Zealand are 100 percent foreign-owned that over 1 million hectares of land is already foreign-owned including at least 157000 hectares of high-country leasehold 2720 hectares of offshore islands and 57 kilometres of coastline. Those figures do not disclose ownership below the threshold or undeclared purchases. As a former Overseas Investment Commission staff member Mark Dunlop said in his submission his experience has left him “with the distinct impression that there is widespread evasion of our overseas investment rules relating to land.” That revelation highlights the need for a proper monitoring regime so that the true extent of foreign ownership is disclosed. We know from Statistics New Zealand that foreign investment in New Zealand now exceeds $208 billion and that the cost of that investment in the form of interest and dividends reached $8.9 billion for the 2004 calendar year. It is no wonder that New Zealand’s current account deficit was $9.3 billion for the same period. That is unsustainable. 
I do agree with Dr Cullen on one thing—we Kiwis need to increase our savings rate if we are ever going to reverse that appalling situation and get our economy out of the red and back in the black. 
In closing I have to say that for all New Zealand First members’ bluff and bluster they acted like lambs when it came to this bill. They did not put up any of their own amendments and they did not support the majority of my amendments. The Green Party proposed improving the scrutiny on foreign investment by changing the rule from 25 percent ownership to 10 percent; New Zealand First opposed that. We wanted to extend the coverage to aquaculture; New Zealand First opposed that. We wanted to reduce the threshold from $100 million to $10 million; New Zealand First opposed that. We wanted to bring in Crown pastoral leases; New Zealand First opposed that. We wanted to extend the national interest test to significant business assets; New Zealand First opposed that. We wanted to bring in import substitution as a criterion; New Zealand First opposed that. All in all New Zealand First is all bluff and bluster. 
GORDON COPELAND (United Future) 
: 
 I would like to use my third reading speech on the Overseas Investment Bill just to tie up a few loose ends from my point of view. 
The first I would like to mention is that during the Finance and Expenditure Committee’s consideration of this bill I spent quite some time wrestling with the good character test set out in the bill—namely that one of the criteria that has to be satisfied is that foreign people who are buying business assets of more than $100 million in this country are of good character. I wanted to explore the possibility of putting something in the bill that would actually stop a repeat of the disastrous New Zealand Rail sale. In other words I wanted to think of a way whereby we could maybe safeguard ourselves to ensure that we would not sell our large companies again to investors who were merely asset-strippers. 
The officials working on the bill were very patient in that regard. They went away and got a lot of information. They came back and they told us about our World Trade Organization obligations our various free-trade obligations and so on and so forth. But the clincher for me in the end of course was just to realise as the Hon Richard Prebble pointed out that the problem with the New Zealand Rail sale was not that it was made to overseas buyers or foreign investors but that it was made to a consortium that included Fay Richwhite—New Zealanders. It was Fay Richwhite—and I say this under the privilege of this House—that then led the charge disgracefully to strip out every single dollar that New Zealand Rail had and to leave our rail system in disarray to the great detriment of New Zealand and its citizens. It was a disgraceful action but it was actually perpetrated on New Zealanders by other New Zealanders who had given in to unbridled greed and who were quite prepared to make money at the expense of their fellow citizens. I believe that that was a disgraceful episode in New Zealand’s history. It was the unacceptable face of capitalism yet it was not done by foreigners but by New Zealanders. 
Rod Donald mentioned that 41 of our top 100 corporations in this country are foreign-owned— 
Rod Donald 
: 100 percent foreign-owned. 
GORDON COPELAND 
:—100 percent foreign-owned and I would like to ask him whether there is any problem with that. Are any of those companies asset-stripping? I think most of them are doing a very very good job. They are good corporate citizens and they are making a huge contribution to this country. We do not need in any way to restrict their operations. 
I want the New Zealand First members to think this through for a moment. Why do they conclude that people born in this nation somehow have superior characters and business ethics to people from overseas? Really when I analyse it I tell those members that the bottom line is that it is xenophobia—it is xenophobia pure and simple and they cannot escape that conclusion. 
Ron Mark 
: I raise a point of order Madam Speaker. Given that the member has just specifically addressed his question to New Zealand First could I ask through you that he yield the floor and allow me to answer that question? 
Madam SPEAKER 
: There will be an opportunity for New Zealand First to respond. That is not a point of order; it is a debating matter. 
GORDON COPELAND 
: As we all know in life sometimes the truth hurts. The other thing I really want to recognise though as a New Zealander is that one of the great things about growing up in this country and being a New Zealand citizen is the freedom we have. We have the freedom to leave this country at any time. I have the freedom to leave here if I want to to go overseas and live there and hopefully to buy a home there and so on and so forth. That is something we value when it comes to us but we do not seem prepared to extend the same freedom to other people. 
When we think about it we realise that a restriction on freedom like that in any part of the world is a danger to world freedom world democracy and basic fundamental human rights. We saw that kind of thing existing in the world under communism where those countries built walls to keep their people in. It exists in Cuba today. Cubans cannot go overseas and until quite recent times most Chinese could not go overseas. That is actually what we are talking about here—the basic fundamental human right for people to be able to travel freely invest freely and interconnect as equal human beings with equal dignity and I resist very very strongly any attempt in this House or in New Zealand outside this House to categorise people on the basis of nationality origin race colour or language. Such categorisation is seriously wrong and needs to stop. I hope one day that more of our fellow citizens will come to that simple conclusion and will start to treat all people in the world with the dignity and respect that is their inherent God-given right. 
I want to make another point too which I think was unconsciously made by Rod Donald. He said this bill is such a terrible animal that the day could come when people from overseas could buy up all the assets New Zealand has. It just showed me how much he misunderstands the process of buying and selling assets. Because of course if that were to happen the net result would be that we New Zealanders would be the wealthiest people on the face of the earth. We would have sold our assets at top dollar to other people and would have greater wealth and huge assets. I make that point because people seem to misunderstand that if we try to stop foreign investment at the same time we deny New Zealanders the right to get a decent price for their properties. There are two sides to the equation and it is time I think that the Greens in particular and New Zealand First woke up to the fact that when one buys and sells there are two parties to the process. It is mutually beneficial which is why people buy and sell by agreement and the funds that swap hands are going from out of the pockets of foreigners into the pockets of New Zealanders. How that can be bad for this country is beyond me to understand. It simply leaves me to say that the analysis and understanding that go into that opposition are shallow in the extreme. 
One other loose end I would like to mention is to do with the Hon Nick Smith’s Overseas Investment (Queen’s Chain Extension) Amendment Bill which arose out of the unsatisfactory situation on D’Urville Island. As Clayton Cosgrove has pointed out this bill ensures that that unsatisfactory situation will not be repeated in the future. It brings in a very very strong enforcement regime with powers given to the court powers to set aside contracts etc. to ensure that non-resident New Zealanders who buy sensitive land in this country will be forced to carry through with the conditions that apply to that privilege. I think that is a very very good move and I think that the situation that arose in D’Urville Island was totally satisfactory. We did not have legislation previously with enough teeth to ensure that people who undertook obligations were forced to actually carry them through. There were no consequences of departing from the terms of the approval given and that has now been fixed in this bill. If we really think it through we know that it makes Nick Smith’s member’s bill redundant so we should bring it back to the House and discharge it. The problem he identified—quite correctly by the way—has now been fixed. 
BRIAN CONNELL (National—Rakaia) 
: 
 Here we are on “14 June” at 9 o’clock and I thank the Government for taking us into urgency because it enables the National Party to build the collegial spirit that is so important when a party is about to go into Government. National members are very appreciative of that opportunity. We support this bill for the reasons I am about to outline. I cannot understand the attack that was made upon me by Gordon Brown. 
Hon Maurice Williamson 
: He’s the Deputy Prime Minister of Britain. 
BRIAN CONNELL 
: Mr Brown I apologise—Peter Brown. Members can see how badly he has wounded me; I cannot even remember the member’s name. However I said I could not understand that attack and I still struggle with that. 
Peter Brown said I had built an argument that anyone can come to New Zealand regardless of any criteria invest in this country and then take those resources out of this country and suck the country dry. I refer the member to my  
Hansard 
 record which will specifically state that I welcome foreign investment into this country subject to it meeting strict criteria and those criteria were set down in this bill. That is why National agrees with the thrust of this bill. It was not lost on me that Peter Brown was building an argument that there should be no foreigners or foreign capital coming into New Zealand. There he was espousing that in his strong English accent. The irony of that might have been lost on the members of New Zealand First but it certainly was not lost on me. I notice that Dail Jones has not jumped up to make an argument either given that he was born in Pakistan as I recall. Of course members of the National Party are not as difficult to deal with as some members of New Zealand First. We welcome the New Zealand First members to New Zealand and to Parliament because their diversity adds to our rich tapestry. 
Some of the arguments I have heard from members who are opposed to this bill remind me of Luddites who would like to turn the clock back. People who want to come to New Zealand to invest— 
Peter Brown 
: I raise a point of order Madam Speaker. The honourable member opened his speech by attacking Gordon Brown I think it was the Chancellor of the Exchequer in Britain but he then went on to say that in very short order he would explain why National supports this bill. He is running out of time and we are sitting here keenly waiting to hear that. 
Madam SPEAKER 
: No that is not a point of order. I do not need any assistance with this. [ 
Interruption 
] That is not a point of order either but I am sure the member is about to get to the bill. 
BRIAN CONNELL 
: I will now turn my attention to the bill. The bill will guarantee that New Zealand’s assets will be protected not just for the benefit of the current generation but also for future generations because it will continue to build on New Zealand’s reputation for encouraging foreign investment in this country. Those members who would build the argument that foreign investment is not important or that it has not made a contribution to New Zealand really do not have a very good understanding of economics. 
Arguments were built that New Zealanders were missing out on the ability to buy high-country stations. As Dr Cullen pointed out—and I do not find myself agreeing with him very often but he was right on this occasion—how many ordinary blokes can run down to the South Island and buy a high-country station? Very few ordinary blokes can. A few people get together form syndicates and buy high-country stations but very few ordinary people can do that. There are some clear exceptions and they were detailed in my earlier calls when I spoke on this bill. 
Ron Mark 
: The Hon Lockwood Smith could buy one! 
BRIAN CONNELL 
: I would not say he is an ordinary bloke. He is a strong contributing member of the National Party which does not make him ordinary—it makes him outstanding. The point I want to make is that despite who was buying high-country stations in New Zealand before foreign capital took over some of them the stations were underperforming. They were hardly economic units. In short they were undercapitalised. I say to Mr Mark that he and I know very well that a farm cannot be turned into a productive unit unless there is sufficient capital. As a result of foreign capital being introduced to some of the high-country stations they are now strong contributors to the local community. They are employing not just one or two people but significant numbers of people and are contributing to not only the farming economy but also the tourism economy of the area because they have been able to diversify. That is what foreign capital does for the high-country farming areas around Canterbury for example. 
I ask this question of members: where has the hysteria come from that says it does us harm when people come from overseas and buy our land? If one looks at most examples— 
Craig McNair 
: $10 billion a year going out of New Zealand. 
BRIAN CONNELL 
: We have listened to the member make a fool of himself so he should just be quiet for a while. If one looks at most of the examples of land purchases one sees the very converse of that takes place. Foreign investors come into New Zealand risk their capital and as a consequence jobs are created infrastructure is developed and no harm is done. The arguments presented by some members tonight are xenophobic. I am afraid that knowing some of those members as well as I do I find it difficult to say that about them but in this case I think it is very very true. 
Let us also talk about the idea that people are coming to this country and closing up high-country properties. The very converse of that is happening in fact. The people who close the gates in high-country stations are members of the Department of Conservation not foreign investors. Another example that Michael Cullen furnished was that of the singer Shania Twain. What has she done for access to the environment for people around Cromwell? She has created walkways and opened up that environment so people have more access to that countryside than they ever had before. 
I just want to finish by drawing the House’s attention to the “Mugabe clause”. I termed it that and I will not back off that one iota. That clause ran to 10 pages in this bill and it suggested that the Government would annex private property from New Zealanders. I am not joking; that is what was being suggested. That in itself was bad but even worse was that no compensation would have been offered at all. I ask members of this House to run the rule of fairness over that. Which Kiwi voters would have said that was fair? Very few. I do not hear barracking from the New Zealand First members now because they know they could not get on to the hustings and say that they were defending that. It is simply not fair. Michael Cullen had to come to the rescue and introduce Supplementary Order Paper 376 in his name which took right out of the legislation the “Mugabe clause” that his colleagues in the Finance and Expenditure Committee were trying to foist on to the people of New Zealand. That is why the New Zealand National Party was strongly opposed to the bill in the first instance. Only when that clause was removed did National say it would lend support to what was otherwise a very sensible and well-argued bill. 
Madam SPEAKER 
: Before I call the next speaker I would ask members to keep the level of chatter down a bit please. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have to say that I do not know where that honourable member has been during this debate because New Zealand First opposed that clause as strongly and as strenuously as the National Party did. 
Hon David Carter 
: And you opposed everything else. 
PETER BROWN 
: We did but we certainly were not having that bill put through with that clause in it. 
A few speeches ago Clayton Cosgrove said that the average New Zealander does not mind foreign investment as long as there are obligations. 
Clayton Cosgrove 
: And they’re enforced. 
PETER BROWN 
: Actually he did not say that but he is adding to it—and they are enforced. That is exactly New Zealand First’s position. We do not mind people coming here with suitcases of money as long as they make a permanent commitment to this country to participate both economically and socially. 
Hon Maurice Williamson 
: Did the member have suitcases of money when he came in? 
PETER BROWN 
: No I probably did not—I had a trunkful. We live in a world where investment does advance the country but there are many organisations in this country. Let me name a few that have taken their money offshore—thanks in large part to the difficulties this Government imposes on them. Electricity lines companies cannot invest in electricity in this country except in a modest way. So what are they looking at doing? They are investing in Australia—as are some of our power companies. Maori corporations—and my colleague Ron Mark will tell people more about this matter in some detail at some other time—are looking at investing offshore because of the difficulties in investing here. Private fishing companies are looking at investing offshore. These are New Zealand entities that are keen to invest in this country yet this Government—helped by its old buddy the National Party—wants to open the door and let in anybody with any amount of money and they can then move out. They can leave the money and move out. The ACT member Deborah Coddington said this afternoon that she did not mind being a waitress in a cafe and that it would do us all good. 
New Zealand First stands for controls and restrictions on foreign investment. We oppose making it easier for foreigners to come into this country leave their money buy the businesses buy our homes and buy our land. 
Hon Maurice Williamson 
: Tell them to leave the suitcases and go. 
PETER BROWN 
: The member might make light of it but this is a serious issue and it will be an issue that the average New Zealander will show his or her support for come the next election. In the next few weeks average New Zealanders will show just where their thoughts are. 
Dr Cullen was so hard up in his attempt to substantiate his facts that he had to refer to the French manager of the Arsenal Football Club as a poor example. He had to refer to Arsene Wenger the manager of Arsenal as a poor example. Arsene Wenger has made an absolutely fabulous commitment to Britain. He lives there he has put his life on the line and he is doing a fantastic job for a major football club. I thought that that was actually a poor example to give when one is trying to illustrate where things are going wrong because in fact they have not gone wrong in that instance. [ 
Interruption 
] The members muttering away behind me have confused foreigners coming here with their money with people coming here who want to stay and invest in the country. New Zealand First has no problem at all with anybody coming here— 
Hon Ruth Dyson 
: What did you bring with you to New Zealand? 
PETER BROWN 
: The member has asked a question that would take me too long to answer. [ 
Interruption 
] 
Madam SPEAKER 
: Let the member continue. 
Hon Member 
: The member should answer the Minister for Disability Issues. 
Hon Member 
: Did the member ship the money out of the country? 
PETER BROWN 
: I will answer the member with a disability. Never have I shipped money out of the country for any ulterior motive. This is a serious issue and New Zealand First is very strong on having restrictions on just anybody coming here to take over our businesses and our homes. It raises the cost of business in this country the cost of homes and the cost of land and puts them beyond the reach of the average New Zealander. I think that much has been said in the debate on this bill but after this bill goes through it will make it harder for New Zealanders to buy land homes and farms—and it is hard enough now. [ 
Interruption 
] The member disagrees but I can tell him that he has got it wrong. New Zealand First opposes this bill. 
A party vote was called for on the question  
That the Overseas Investment Bill be now read a third time. 
Ayes 84 
New Zealand Labour 51; New Zealand National 23; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 6; Green Party 7; Maori Party 1. 
Bill read a third time.