Smith DamienDAMIEN SMITH (ACT): ACT would like to support this bill at its first reading. It's worth putting in context how important this industry is forestry for New Zealand. It accounts for about 1.6 percent of New Zealand's GDP which equates to about $7 billion in September 2020. It's the third largest export product earner behind dairy and meat. There is a potential target to reach—an extra $3 billion to reach $10 billion. It contributes an annual gross income of around $5 billion and directly employs 38000 people in production processing and commercialisation. It accounts for around 11 percent of the land use in New Zealand.So a strong forestry industry contributes to many of the Government's priorities including regional development employment and mitigating climate change. The forestry sector is heavily dependent on inward investment with up to 70 percent of forestry plantations being foreign-owned. This means routes for screening such investments have a particular impact on the sector.At the moment the Crown's forest estate is roughly around 31500 hectares and the total land registered under the emissions trading scheme is 333000. So the overseas investment the results and the conversion of farmland or other land for forestry benefits New Zealand. I like the aspect of the bill that more risks can be managed here. New Zealand has consequently seen an increase in forestry investment since the period of Mr Jones.But making changes to this overseas investment regime is not without risk. For example a stricter overseas investment regime may cause a decrease in overseas investment generally. Overseas investors would probably likely see an increase in processing times for applications and increased uncertainties that come with this application.Overall any changes perceived as New Zealand tightening its investment regime to reduce overseas investment and therefore impacting New Zealand's attractiveness for foreign direct investment more generally would become an issue. Any reduction in overseas investment in New Zealand forestry may cause a decrease in the value of land held by landowners.There's also a clear risk to the Māori interests. Māori own at least 30 percent of the land containing New Zealand's plantation forests but not always the trees themselves. They're often partners for overseas forestry investors. So obviously at the select committee we must take that into consideration.It's amazing listening to Mr McKelvie offer a longer-term history but what has happened since 2018 has been remarkable in this industry. It was made quite easy before the economics changed to lots of farmland being turned into pine. So we've closed the loophole with this bill and subject forestry to the standard overseas investment test redefining to the benefits to New Zealand test.The major area of changes that I like as well is there's no more promise of special forestry test; it's New Zealanders who don't want foreign investment turning farmland into pine have got a voice. It's happened rather rapidly due to incentives and carbon pricing and foreign investors lose a permissive loophole into offshore forestry investment in New Zealand.So there's lots to be accredited here in the bill but certainly I think more work needs to be done on the economic impacts and not disrupting the industry whilst catering to local communities and satisfying the concerns that are actually in regional New Zealand. And to that effect ACT will be supporting the bill and we look forward to working on it in the select committee.