Parker DavidOVERSEAS INVESTMENT AMENDMENT BILLThird ReadingHon DAVID PARKER (Minister for Trade and Export Growth): I move That the Overseas Investment Amendment Bill be now read a third time.If you've got the right to live in New Zealand permanently you've got the right to buy here but otherwise it's not a right; it's a privilege. We believe it's the birthright of New Zealanders to buy homes in New Zealand in a market that is shaped by New Zealand buyers not by international price pressures.There can be no doubt that international buyers are having an effect on the marginal price in some of our markets; perhaps less marked than it was when the property market was raging some years ago and when there were fewer controls on the outward flow of capital in some other countries. But nonetheless in a recent quarter 20 percent of the homes sold in central Auckland were sold to overseas buyers and 10 percent of homes in the whole of the Queenstown Lakes District Council area were sold to overseas buyers—two of our most expensive housing markets in New Zealand and it's no coincidence; these matters are linked. There can be a debate as to how much the effect is on price; there can be no doubt that there is an effect.This is a Government that keeps its promises. In 2013 the party that I'm from announced that we intended to ban foreign speculators from buying existing houses. Five years later we stand on the cusp of achieving it. In spite of all those sitting across from us who said it couldn't be done we're here today to take another step towards restoring the great New Zealand dream of homeownership.National said it could not be done. They said we had to trade off controlling who owns our homes and having access to trade agreements. They told us that we couldn't sign up to the Trans-Pacific Partnership or what became the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and protect the ability of the current or future Governments to control who bought our houses. They were wrong. We have proven them to be wrong. They said that during the election. They denied that there was a problem prior to the election. They couldn't even utter the words housing crisis" but we have shown that actually with clever policy and hard work from officials as well as the Government you can get to a sane place.This bill is a key part of the Government's plan to improving housing affordability which includes KiwiBuild tax policy to discourage property speculation—and of course we've announced ring-fencing of losses and we've extended the brightline test from two years to five years so that properties that are flicked on and a profit is taken within five years will be taxed on income account. We've got the Tax Working Group looking at further changes to discourage property speculation. All of these things together work to address the declining homeownership rates which are the lowest that they have been in New Zealand since the 1950s and are associated with the rise of inequality in New Zealand. Everyone knows that the largest asset that's owned by most people is their own home and if you have got decreasing rates of homeownership you have most certainly got a country where you have got decreasing inequality and that's what we've been experiencing in New Zealand in the last nine years.We're determined to fix that and one of the ways we're doing that is by ensuring that the prices of New Zealand homes are set on the domestic rather than international market. Under the Government's changes overseas speculators will no longer be able to purchase existing homes. These homes will generally only be able to be brought to be bought by New Zealand citizens and resident-class visa holders—and that includes permanent residents who spend or commit to spend the majority of their time in New Zealand; amongst other things that makes them a tax resident. So if they're here they're turning their shoulder to the wheel of the New Zealand economy then they can buy and if they're not well they won't be able to buy an existing home.Now the regime will work to channel foreign investment into the productive sectors of the economy rather than into the speculative sectors of the economy but it will also direct the foreign direct investment that is coming into housing into new supply rather than bidding up the prices of existing homes. That's why we're allowing foreign developers who commit to build large apartment complexes to get approval to sell a portion of the units to overseas investors off the plans without being required to onsell the unit once construction is complete. That's a limited exception that we've got to ensure the viability of these projects but it's also why foreign developers will be able to retain an interest in other large new residential projects as long as the dwellings are rented out or sold through shared equity models or outright sale. This too will assist first-home buyers.In addition to better directing foreign direct investment in the housing market the bill will also help channel more foreign direct investment into the forestry sector. This is an important ambition for the Government. Even in the committee stage last night it was obvious that members of the Opposition still do not get it. If we did not make these changes to include forest registration rights under the ambit of the Overseas Investment Act they would not be able to be included in the future. Any forest that is a freehold or leasehold forest can be sold by way of a forest registration right for multiple rotations—for more than 100 years if you wanted to. If your screening regime does not cover forest registration rights you have an ineffective—not you Madam Deputy Speaker; the country has an ineffective screening regime for forests.So we address that issue by enabling investors to purchase forestry through either freehold or leasehold or forest registration rights but then introducing a simpler process because we want that investment. We want it to be easier; we don't want to be clogged up by unnecessary lengthy processes and by the complicated counterfactual analysis that they need to complete at present following the High Court decision in the Crafar Farms decision which has also impacted upon forestry. We're taking an axe to the unnecessary red tape because we want to be stimulating further foreign direct investment into forestry.Now if a future Government wants to come along and change that or in a few years' time the current Government wanted to change that we can because we've preserved this policy space by including forest registration rights before the CPTPP comes into effect.Before I finish I want to reiterate that we remain a Government committed to being an outward-looking trading nation.Hon David Bennett: What a load of rubbish.Hon DAVID PARKER: Well actually—they say "a load of rubbish." on the other side. The last Government dropped exports from 30 to 27 percent of GDP in the face of a promise to increase to them 40 percent of GDP. Abject failure: speculating house prices rapidly increasing population poor per capita growth and a poor export performance.Now foreign direct investment is welcome to the economy where it adds—and this is not speculative asset classes like residential land or selling our pastoral farms. We don't think that will assist—Hon David Bennett: Trees.Hon DAVID PARKER: Actually we do think further foreign direct investment in trees will assist; that's why we want it but we also need foreign direct investment in other parts of the economy and we're open to that.I thank the staff of Treasury and the Overseas Investment Office. There has been a rush to do this because of CPTPP. In the final event we were able to leave it in select committee for six months—and I thank the Finance and Expenditure Committee for their efforts during that period—and to introduce a separate Supplementary Order Paper to deal with these forestry issues in a more fulsome way. But we were only able to do that because the officials worked long hours late at night in order to run the policy process in parallel with the select committee process. Otherwise this would not have been able to be achieved before the CPTPP comes into effect and I'm grateful to the officials for their work and for the work that was done by the select committee. Can I thank all members for their contribution to this important debate.Can I also say that I think it's appropriate that this bill also tightens up on monitoring and enforcement. I agreed with some of the comments that the Rt Hon David Carter made yesterday in the House that the enforcement and monitoring of overseas investment has been less than perfect in New Zealand and we need to improve upon that to maintain the integrity of the system and to maintain the support of the public. With that I'm happy to take my chair as I commend this bill to the House."