Parker DavidOVERSEAS INVESTMENT AMENDMENT BILL (NO 3)First ReadingHon DAVID PARKER (Associate Minister of Finance): I move That the Overseas Investment Amendment Bill (No 3) be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. This is the second of two bills that between them cover the territory that was in the Overseas Investment Amendment Bill (No 2) which was introduced on 19 March 2020 which has been sitting before members of the House now for close to two months. That bill as I previously described has effectively been split into two parts. One part was in the last bill and the other part is in this bill. The only addition to the first part was this new lower screening threshold during the COVID period. In terms of briefings being offered to the members briefings were offered when it was originally tabled but of course COVID interrupted and—through no fault of the Opposition or anyone else—those briefings weren't given. And they weren't re-offered until earlier today when we had been re-meeting under level 2 for reasons that the members understand as to where those briefings have to be.On this side we believe that the changes already outlined in the prior bill plus the changes that are in this bill together with the prior reforms that we had during this term of Parliament are a suite which improve the integrity of our foreign investment screening regime. If I could just recap on the changes that we've already had: we introduced new screening requirements for foreigners buying residential homes which from the point of view of the Government was necessary to ensure that the housing market is set by New Zealanders for New Zealanders and not by foreigners who don't live here.The second thing we did was we reformed the overseas investment regime for forestry and we did two things there. Firstly we screened forest registration rights as the Rt Hon David Carter mentioned because they previously weren't screened by the scheme and it was being used as an avoidance mechanism and effectively meant that the forest regime was ineffective. At the same time we simplified processes for forestry because although we wanted to have a screening regime for the future we wanted to encourage more investment in forestry which we did by enabling a more permissive screening regime for all classes of forestry.The combined changes of the Overseas Investment (Urgent Measures) Amendment Bill that we've just put to the Finance and Expenditure Committee plus those prior changes plus this bill complete that package of reform. And I'm confident that these bills combined will not only leave us well positioned to navigate through this current crisis but in the long term they support the sustainable and productive investment that we need to improve New Zealanders' living standards.While we've sought and been given by the House permission to have a short select committee period for the urgent measures bill because we need that to pass into law quickly—and I would again remind the House that Australia did that by statutory regulation overnight and Canada and Europe have already done it—my intention is that the select committee and Parliament be able to fully consider this bill in a normal select committee process a full process. And that will include interaction of the parts of this bill with the parts of the urgent bill that remain i.e. the national interest test. So we want the select committee to have the full time under the second bill to properly consider all of those details of the national interest test because I agree that they are worthy of that scrutiny. The only difference between the No. 2 bill that's been there for two months and these two bills combined is actually the short-term intervention in respect of COVID that takes the threshold down to zero for that COVID period.As prior speakers on both sides of the House have noted overseas investment does benefit New Zealand. It creates jobs brings new technology boosts productivity drives growth brings international connections and our economy is built on openness to trade and productive investment and the Government wants to ensure that this continues. At the same time we know that some overseas investment can bring risks or disadvantages and we think it's appropriate that the overseas investment regime can manage these. In respect of the survey that I think one of the members was referring to when he said that New Zealand's international rules relating to overseas investment are already quite strict that is only true in respect of land-based investments. It's actually not true in respect of business investments.The balance that we need is of course always a matter for debate and we think the balance is not currently right. This particular bill has two main parts. Firstly it codifies into the primary Act the effect of existing regulations about investments in rural land and we think that it's appropriate that that sit in primary legislation rather than be able to be changed by Ministers from Government to Government by statutory regulation. It is of course the right of any Government to change those if they can convince Parliament that they should but we think they should have to come to Parliament to make those changes rather than do it by statutory regulation and I'll give a point to illustrate why that's necessary.Following the controversies when the Rt Hon David Carter—I'm not sure if you were still Minister of Agriculture at the time or whether you were in the Chair but there were controversies around the sale of the Crafar Farms to overseas interests. At the time the National Party said that in response to the public outcry they were going to make it harder to buy rural land and they introduced a rule that they said was going to achieve that purpose. What it said was through a side letter they sent to the Overseas Investment Office please look favourably and approve applications to buy farms up to 10 times the size of that type of farm. So you could buy 10 times the size of an ordinary dairy farm get approval and then get turned down on the 11th. You could do the same with sheep farms or sheep and beef farms. Now we thought that that was really pulling the wool over the eyes of New Zealanders and didn't think that was right. We removed that we changed the letter of expectations but we're now saying that those changes and the existing regulatory standards should in effect be brought into the primary Act.The second thing it does is it has further measures to cut red tape to streamline the process for most people investing in New Zealand which will help our attractiveness. In terms of the red-tape cutting we're building greater flexibility into the consent process for both prospective and repeat investors of good character. This will enable investors to complete transactions more quickly with lower compliance costs having met the simplified good character relationships either as part of previous transactions or in advance of a current transaction. We're removing short-term leases and some other less-than-freehold interests in land from screening. As I've said in respect of land we don't really think that there's any economic benefit in selling our farmland to overseas interests. We think that our farmers are amongst the most efficient in the world and it's interesting that most of us at the moment are very thankful that our farming industries and our farm processing industries which are dominated by New Zealand ownership are actually still performing for us through COVID. I think we should reflect on the fact that the status quo is actually performing very well for New Zealand and that we ought not to put that at risk by selling land-based assets overseas.So this codifies those positions rather than lets a future Government by regulation effectively by stealth after not having campaigned on the issue—just doing it by Government regulation in a way that would cause more of our farms to be overseas-owned and for us to be tenants in our own land. There are some changes in there relating to bottled water on sensitive land where discretion is allowed to ensure that there's not going to be an impact on water quality and sustainability. In conclusion we think that as always the role of productive investment is important to lifting New Zealand's wellbeing and productivity. I actually agree with some of the comments that were made by the Hon Gerry Brownlee—that we have to be careful that we don't become so restrictive that distressed assets can't be sold when there's a proper reason to do so. But we also need to be careful that we have the appropriate protections in so that the Governments of the day can protect the national economic interest as they see it as part of their right to govern. I recommend the bill to the House.