Davis KelvinOVERSEAS INVESTMENT (FORESTRY) AMENDMENT BILLFirst ReadingHon KELVIN DAVIS (Minister for Māori Crown Relations: Te Arawhiti) on behalf of the Minister for the Environment: I present a legislative statement on the Overseas Investment (Forestry) Amendment Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon KELVIN DAVIS: I move That the Overseas Investment (Forestry) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. I intend to move that the bill be reported to the House on or before 1 August 2022 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day where there is a sitting of the House and on a Friday in a week in which there has been a sitting in the House and outside the Wellington area despite Standing Orders 193 195 and 196.This Government welcomes sustainable inclusive and productive overseas investment. This investment improves New Zealanders' living standards and connects us with the world. This is why we have recently simplified the Overseas Investment Act 2005 cut unnecessary red tape and reduced the number of low-risk transactions being screened. We also want to make sure that overseas investment continues to strongly benefit New Zealand. This bill does just that. It ensures that forestry conversions by overseas investors continue to bring broad benefits to New Zealand. These investments will now be considered under the same rules as other investments in sensitive land known as the benefit to New Zealand test" rather than under the streamlined special forestry test. This will channel overseas investment into the right forests in the right place for the right reasons. This shows again that the Government is responsive to New Zealanders' views that overseas investment should be sustainable inclusive and productive. These changes build on our earlier action to ban overseas purchase of existing homes so that New Zealanders are not outbid by wealthy overseas investors to set a high threshold for the acquisition of farmland to reflect its economic and cultural importance and to provide new tools for better managing investment in strategically important businesses reducing risks to New Zealand's national interest or national security.In 2018 we made changes to the Act's forestry provisions. For the first time we brought into the regime overseas investment in forestry cutting rights. We needed to do that swiftly before the Comprehensive and Progressive Trans-Pacific Partnership came into force otherwise the opportunity would have been lost. Because we took action when we did future Governments will have the power to control overseas investment in forestry. At the same time we introduced the special forestry test. This reflected the country's economic context at the time where supporting forestry production and forestry investment was desirable for a variety of reasons. The economics of the forestry sector have since changed. The sector has become a much more attractive prospect to investors. This is resulting in increasing conversion of land into forestry some of which is coming from overseas investors. New Zealanders are concerned that forestry is not always being planted in the right places for the right reasons. We've heard these concerns. This bill will ensure overseas investment continues to benefit New Zealand. Forestry will always be a very important sector to our economy. It will make a vital contribution to our climate change goals. The Government recognises that high-quality foreign investment is important and continues to welcome this. But we need to get the balance right. This bill and a suite of related Government policy work under way—such as changes to the emissions trading scheme—will ensure we do. The bill does this by requiring forestry investments to demonstrate what benefits they will bring to New Zealand such as environmental and economic benefits. This will help ensure any investment supports our rural communities to thrive and that our overseas investment is productive and sustainable. This Government is confident these changes will not be barriers to productive and sustainable investment to our forestry sector. The special forestry test is still available for overseas investment in existing forestry. We are also making a range of minor and technical changes that will provide investors with clarity about the rules to help with their operation and effectiveness. The removal of the special forestry test only means that conversions are now treated the same as any other overseas investment in non-urban land. It's important to note that last year we made major changes to streamline and simplify the benefit to New Zealand test that will now apply to these forestry conversions. I mention this to assure you that we're not going back to the way things were prior to 2018. Major improvements have been made since then to how the Act works. The benefits of the proposed investment will only need to be compared against those of the current state of the land. Previously a complex and highly theoretical exercise was required to be undertaken. The benefit factors under the benefit to New Zealand test have also been streamlined to seven broad factors rather than 21 specific factors. This is much simpler and allows investors to make a holistic case for their investment. The seven factors are: (1) the economic benefits (2) the benefits to the natural environment (3) public access (4) protection of historic heritage (5) advancing a significant Government policy (6) oversight or participation by New Zealanders and (7) consequential benefits. And finally the benefits to New Zealand will need to be proportionate to the size scale and nature of the investment so conversion of highly productive farmland will be required to demonstrate proportionately higher benefits than conversions on land that is marginal or lower quality. Again this helps us ensure overseas investment continues to benefit New Zealand. More broadly we recently made other improvements to the Act including introducing statutory time frames for decision makers to make decisions where there was previously no time frame and repeated investors no longer needing to satisfy the investor test each time they apply for consent.So in conclusion the Government supports and welcomes high-quality foreign investment in forestry and will continue to do so. However as economic and regulatory contexts have changed we have taken action to make sure overseas investment continues to benefit New Zealand. In summary this bill ensures the Overseas Investment Act 2005 supports New Zealand with balancing the needs for forestation with the wider needs of local communities regional economies and the environment. It means we will have the right forest in the right place for the right reason. I commend the bill to the House."