Carter David; Tolley AnneRt Hon DAVID CARTER (National): Thank you Madam Chair. I'm delighted to take a brief call on the Overseas Investment Amendment Bill Part 3 and I particularly want to focus on the issue of enforcement. But first of all I note the Hon David Parker in the chair and as it has been some time since we debated this legislation late last week it is worth pointing out that this is of course the legislation where the Hon Shane Jones rolled the Hon David Parker. This is the legislation about which the Hon David Parker has said We're going to stop all overseas investment." then it went back up to Cabinet and the Hon Shane Jones suddenly realised that a billion trees would be impossible without some foreign investment so he won with a substantial Supplementary Order Paper and of course Mr Parker's here to try and tidy up the mess having been rolled again by New Zealand First.But I want to talk about the issue of enforcement and I want the Minister to answer this question. We were told as we went through the select committee that the Overseas Investment Office doesn't have sufficient resources for enforcement. We were equally told as we went through the select committee process that resources would be forthcoming to allow the Overseas Investment Office to do its enforcement properly. So my question is to the Minister: when will those resources be available? Once this legislation comes into play there are a large number of opportunities I think to rort the legislation and it's going to require more resourcing for the Overseas Investment Office. As a person associated with agriculture—and I'm sure the Hon David Parker himself knows of many many properties farm properties in particular which have been sold to an overseas investor they have gone through the process to get overseas investment approval they have made all sorts of promises about developing the property spending more money planting this and that employing more New Zealanders and from my local knowledge very infrequently do the purchasers comply. I can quote one or two examples—I won't because I think it's the Minister's job to know these examples—but I want the Minister to rise to his feet and give an absolute assurance—Dr Duncan Webb: You're making it up.Rt Hon DAVID CARTER: Dr Duncan Webb's just interjected saying it doesn't happen. He's a solicitor. He's a solicitor in Christchurch and probably helped formulate some of these applications for the Overseas Investment Office. He knows promises are made and he knows they haven't been kept. So that's the first question I have of the Minister: when will the resources be available?The second question I have—and this is one we teased out with the officials at the select committee without success. It is an issue whereby we can potentially see a real loophole with a forced marriage situation. Imagine an overseas investor wanting to buy an apartment in Auckland and this legislation makes it almost impossible—and if not almost impossible then very difficult. So this overseas investor says "Well I've got a way to do it. I'll shack up with some New Zealand person; make out it's a marriage. We will collectively buy the house in our joint names as joint matrimonial property." After three or five years the arrangement splits and there's a matrimonial settlement—Dr Duncan Webb: Oh come on!Rt Hon DAVID CARTER: Again Dr Duncan Webb will be the expert on this but he couldn't answer the question at the select committee. So then we get to the situation where a matrimonial property programme is established and I suspect if the original overseas purchaser is really really keen on that apartment he or she will have found a way to make sure that it ends up in his or her name. Now the officials couldn't answer how the Overseas Investment Office was going to handle that so I look forward to the contribution from the Minister and I see he is itching to get to his feet to make sure that loophole has been plugged. Now I have another loophole that I've thought of recently—Hon David Bennett: No there can't be another one.Rt Hon DAVID CARTER: No I think there can. I think there can. What about a significant farm property in the former electorate of the Hon David Parker the Otago electorate which he held briefly for three years.Hon Member: Did he?Rt Hon DAVID CARTER: He did. He did; it was unbelievable.Hon David Bennett: I can't believe it. Nobody would have voted for him.Rt Hon DAVID CARTER: No no people did vote for him in 2002 to 2005 and then they saw the error of their ways. But this situation would be if an overseas investor wanted to buy a property looked at it and said "That fulfils all my wishes—to have control of that property—but oh well I won't get it through the Overseas Investment Office." So what he does is he employs a New Zealand farm manager who has very little equity and he lends to that New Zealand farm manager 99 percent of the equity at very very generous interest rates to the overseas investor. So the property is for all intents and purposes as far as the Overseas Investment Office is concerned owned by a New Zealander but this overseas investor with 99 percent of the equity has absolute control and can tell the manager exactly what he or she is to do. The overseas investor then gets exclusive use of that property for as long as he or she likes. I think that's quite a feasible example and that would be a way to rort this legislation. So there are two examples I give to the Minister and he's busy beavering with his officials. "Oh we hadn't thought of that." the officials are saying so let's find out whether we've discovered two loopholes because I think we have. I think we have.While the Minister is seeking advice I'm going to resume my seat and I'm going to busy my mind with coming up with another couple of loopholes because I think there's heaps of them. I think this legislation won't work. We've got to bear in mind why the Hon David Parker said it was introduced and I remember when he took the call last week he said it had been introduced to drive down house prices. Well I saw a little piece on the TV news over the weekend where Sydney and Melbourne prices have declined by 5 percent. And if we listened to Adrian Orr as the Reserve Bank Governor last week when he came before the Finance and Expenditure Committee he said he'd express no surprise at all if they came back by 5 percent here in New Zealand with or without this legislation—without this legislation in fact.So I say to the Minister I now have another question for him. If he's introduced this legislation to drive down prices of houses in New Zealand I want him to take to his feet today in this committee and tell us what amount he wants to drive these prices down by. I say there will be a lot of heavily mortgaged—[Interruption] No no Dr Duncan Webb won't know anything. He's what you call cannon fodder in this debate. He's just being used. He won't know anything of significance. But I want to know from the Minister: he wants to drive down the price of housing throughout New Zealand particularly Auckland—at what stage and what amount does he want to drive it down by? Then at what level will he conclude that this dreadful legislation has been successful?The final point I'll make in talking about enforcement and other miscellaneous matters is I'll point out to the Minister that while he sees business confidence surveys as junk can I say to him it's the Overseas Investment Amendment Bill that is the sort of legislation that is driving business confidence low and it will drive it lower. This country needs foreign investment. A foreigner can't buy a farm in this country and take it away with them. Dr Duncan Webb: Is Teddington on the market?Rt Hon DAVID CARTER: I know Dr Duncan Webb probably thinks they can but they can't. Let me tell him; I've been around a bit longer than he has and they can't take it with them. They can perhaps farm it judiciously and make improvements. I think in too many cases as I pointed out with the very first question I put to the Minister they've bought the land and made the promises that they haven't fulfilled and therefore I want to know how this legislation's going to be enforced.Hon David Parker: Madam Chair?CHAIRPERSON (Hon Anne Tolley): The Hon David Carter."