Overseas Investment (Owning our Own Rural Land) Amendment Bill — First ReadingText is incorporated into the Bound VolumeOverseas Investment (Owning our Own Rural Land) Amendment Bill — First Reading[Sitting date: 22 July 2015. Volume:707;Page:5238. Text is incorporated into the Bound Volume.]Overseas Investment (Owning our Own Rural Land) Amendment BillFirst ReadingHon PHIL GOFF (Labour—Mt Roskill): I move That the Overseas Investment (Owning our Own Rural Land) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. As a provincial member Mr Deputy Speaker you will know that here in New Zealand we have a deep cultural attachment to owning our own land both our homes and our farmland. I guess that comes from nearly two centuries of migrants coming to this country to escape from being servants and tenants. People came here to make a better life for their family and the Kiwi dream was born of owning your own home and working your own farm. Our forebears did not come to this country to be tenants in their own land.As the ANZ bank pointed out in an analysis that it did a few years ago land is also important because that is where New Zealand’s competitive advantage lies. What our economy relies on is what we produce on the land. The bank itself noted that we have got a huge degree of interest in maintaining local ownership. I think it is for those reasons that many New Zealanders feel that Kiwi control of our land and the Kiwi dream is under threat. It is under threat from the increased acquisition of property both residential homes and farmland by overseas investors.I guess the first question to answer is: “What is the level of land being sold?”. The curious thing is when I looked up what the manager of the Overseas Investment Office said she said that she did not know how much of our land was in foreign ownership. Is this not typical of the Government? It does not know how many of our residential houses have been bought up by foreign investors and it does not know how much of our farmland is being bought up by foreign investors. Many people would say that it is not a case of not knowing; it is that the Government does not want to know—or rather more precisely it does not want New Zealanders to know. But some figures are available there. On the broadest definition of land approved for overseas sale the Overseas Investment Office records show that under John Key more than 1 million hectares of land has been approved for sale wholly or partially to overseas interests—1 million hectares since John Key became Prime Minister. On the narrowest definition which is of net farm sales solely—100 percent to overseas interests—the figure is over 300000 hectares.We should not be surprised about this because John Key and Bill English came to office in 2008 saying that they were going to open up our land for sale to overseas interests. Bill English said that the system was cumbersome and he was going to loosen it up. But then came along an organisation called Crosby/Textor. Crosby/Textor did some polling and lo and behold what did Crosby/Textor find out? It found out that New Zealanders fundamentally do not want to see their birthright their houses and their farmland sold to overseas interests that do not have at the forefront of their goals the betterment of New Zealand. So suddenly the rhetoric changed and John Key got up and said: “We do not want to be tenants in our own land.”Although the rhetoric changed what did not change was the practice. The political spin altered but not the reality. What happened? Very bravely the Minister of Finance altered the regulations and said that we should actually have oversight to safeguard New Zealand’s interests—very vague. What did that convert to? Absolutely nothing. Then in December 2010 Bill English sent a ministerial directive to the Overseas Investment Office. On the surface it looked like it was toughening up until you read the fine print. You know what the fine print said? The fine print said: “I want this office really to concentrate only on sales of farmland that are 10 times the average New Zealand farm.” That is a tiny percentage of the sales. What went under that does not seem to matter and the proof of the pudding is in the eating. These regulations have had no impact.In fact in the last 3 years the consents for sale of our farmland overseas have gone up not down. Another 140000 hectares has been alienated from New Zealand ownership—David Seymour: People with the right genetics.Hon PHIL GOFF: And wait for it Mr Seymour wait for it: Ministers have the discretion to decline sales. Of the 400 approvals in the last 3 years how many were declined?Pita Paraone: Zilch.Hon PHIL GOFF: Zilch. None. Not one. Not one time did New Zealand Ministers see fit to stop the sale of land to overseas interests. What the National Government is doing is simply rubber-stamping the approvals to sell land to every application from overseas to buy it.Who is buying that land? The biggest buyers are the Americans followed by the Canadians the Israelis the British the Australians Switzerland the Netherlands and Luxembourg. One thing that is actually quite interesting in this is that the accumulated sales of farmland to Chinese interests are very low but in 2014 the largest purchaser of farmland was China because of the changes that are happening in that country. But really it does not matter whom the land is being sold to; what matters is that ownership of more and more land is slipping out of New Zealand hands.I want to say that Labour allowed too much land to be sold—it allowed too much land to be sold. But to its credit it changed its policy 4 years ago and this bill is a product of our commitment to that policy. National pretended to change its policy but in reality nothing at all has changed.Why do I object to the sale of land overseas? Well the first thing is—and let us hear the National Party on this—it is not a level playing field. Young New Zealanders wanting to work up from being a sharemilker to owning their own farm are competing with overseas investors whom they cannot possibly compete with. They are competing with people with access to money where they are paying a fraction of the interest rates that the young New Zealand farmer would have to pay for borrowing to buy that land.The real worry is that with the dramatic fall in the New Zealand dollar over the last 6 months the cost of buying up New Zealand land from overseas is becoming cheaper and we will see the American pension funds buying up that land. We will see the farmers who are suffering from a downturn in dairy prices forced into mortgagee sales having that land go to people who will snap it up as a bargain from overseas. We will see the changes that are happening in China having an impact as well. I know China well. I know the Chinese Government has liberalised the investment rule for its investors. I know that investors in China right at the moment with a 50 percent drop in the Shanghai stock exchange are looking abroad for safe places to put their money and what better place to come to than a country that has no capital gains tax no stamp duty and where that land is certain to maintain its value over time?I am in favour of foreign direct investment but I am in favour of it in areas where it will benefit New Zealand. What this bill says is that investing in residential property and investing in our farmland is good for those overseas investors but it provides nothing for us as New Zealanders. In the residential housing area we have seen house prices in Auckland go up by 26 percent in the year to June 2015. Who thinks that overseas investors wherever they come from are doing us a favour in pushing those prices up? We will see overseas investors pushing out the young couple that want a life farming their own land and stopping them from having that opportunity. I say to those members shame on them.Mr DEPUTY SPEAKER: I am sorry to interrupt the member. His time has expired.MELISSA LEE (National): Thank you. [Interruption]Mr DEPUTY SPEAKER: Order cousin! I have called Melissa Lee who has the floor.MELISSA LEE: Thank you very much Mr Deputy Speaker but I almost feel like I have to give the opportunity to the front-bencher in front of me because he does actually have some wonderful lines about the member who just sat down Phil Goff.I rise to take a call as the Government benches’ first speaker on this the Overseas Investment (Owning our Own Rural Land) Amendment Bill. For a little while there while Mr Phil Goff was speaking I was thinking: “Maybe he’s actually unlike some of his other colleagues and he isn’t actually going to be having a go at you know the Asian migration and the house prices.” I thought this was about land. You know what? I understand the value of land. Korean people are very strong on landownership. They have an attachment to the land and they value the land. But one thing about land is that it stays in this country. It is not like they can package it up bag it and take it back to China or any other country that they could take it back to.I have to say that I am rather disappointed and actually surprised that the honourable member for Mt Roskill is the main proponent of this bill. After all he is a former Minister of Trade who hopes perhaps to become the mayor of the super-city of Auckland. I thought he was actually gunning for the role of mayor His Worship next year. If he does in fact become the Mayor of Auckland he will have to go overseas and look for investment into the system—if he is in fact the mayor. After all Auckland is in fact the home to 50 percent—almost 50 percent of people living in Auckland are born overseas. How is he going to explain this bill to the people who will eventually vote for him? I am just a little surprised.Mr Goff the honourable member is a longstanding member of this House whom I actually get along really well with. I do attend a lot of ethnic events with him as he is the spokesperson for ethnic communities for the Labour Party. He also claims he is a champion of the working man and yet he fails to represent the 39 percent of his electorate who are of Asian descent and the 3 percent who are of Middle Eastern descent and indeed any New Zealanders in his electorate who have family and friends from their homeland looking to invest their hard-earned finances and resources into the better development of this country.Just in case he is actually wondering whether I got this data from a real estate agent I will just say that this data comes from the census figures—that 39 percent of his electorate are in fact of Asian descent. When his colleague actually calls me 40 percent Chinese I have to say that I am 100 percent not Chinese. I am 100 percent Korean-made but I am 100 percent Kiwi. I have made a conscious decision to become a New Zealander. I have been in this country for three-quarters of my life almost but I was made overseas in Korea. I just cannot change that. My parents did the deed.I am surprised and yet not shocked that the former Leader of the Opposition promotes this legislation. I am wondering whether the member feels that I should be less offended because at least he thinks that this is actually not about a particular ethnic community—that he is not actually having a go at the people who look like me or the Chinese or those who may be mistaken for Chinese just because their surname happens to be Young or Lee or Ling for example.I must say that the Labour Party has not had too many issues about non-Asian people buying land in the past and I fear that in fact the Labour Government sold double the amount of land that this National Government has actually sold. I mean we have sold half what the previous Labour Government actually sold to overseas interests—less than half. I am surprised that Labour members get up now to say: “Oh selling to overseas interests is wrong.” You know somebody reminded me that New Zealanders will never get rich selling to ourselves and that is true. We cannot make milk just for New Zealanders. We are not going to bring foreign currency into New Zealand by selling to just New Zealanders and so what? I am just wondering whether Mr Phil Goff when he decides that he wants to sell his farm—or maybe he did try and maybe a non-Asian did not want to buy. Maybe locals did not want to buy. Maybe it was in fact Asian people who wanted to buy and he had to turn them down because he is anti - Asians buying land perhaps. I do not know. I am not going insult him but I have to say that the honourable member is wrong and I am voting against this bill.I am just a little bit sad that Labour has to condescend to ethnic communities in this way. It is actually pitiful and I have to say it does not work. I think people in this country who are of ethnic origin do recognise that these kinds of policies that Labour is proposing are simply racist. It is simply not something that most New Zealanders want. It does not work. The former leader I am afraid is showing his advanced years and I am not talking about his age. He has actually been here for about three decades. It is a shame that he does not grow in understanding and compassion for those New Zealanders who are of ethnic origin and those applicants coming from distant shores to try to make their dreams of becoming a Kiwi a reality.I am just baffled that he does not actually get this. If he holds the portfolio for ethnic communities he must understand how ethnic communities work. Most people when they send their children to New Zealand to study English or do high school or university are thinking about their future. When their children become New Zealanders or become accustomed to the New Zealand way of life they often want to buy them homes so that they have a comfortable life while they are living in New Zealand and so they invest in a home or maybe they invest in a farm because they see a little bit further into the future; that when they are looking to retire maybe they will settle in the country that their children have become accustomed to and maybe they have become New Zealanders. So by virtue of that they would want to invest in this country and they will eventually move to this country and many have.I am a New Zealander. I sort of had to follow the other way. I did not come to New Zealand to study and have my parents follow me but I had to follow my parents who had decided that New Zealand was the haven that they had been looking for. I had to follow my parents—typical Asian family; you know families move together. The member must know that most ethnic communities who invest and send their children to school in New Zealand buy houses and land because they hope to become New Zealanders in the future full stop.This Government has already put a number of measures in place to prepare for situations where there are concerns about potential investors. These measures can be found in the Overseas Investment Act 2005 and that Act voted for by the honourable member while his party was in Government strikes the balance between widening the investment opportunities that New Zealand gives to the global community and protecting those sensitive assets that New Zealand cares about.I must point out that Mr Goff the former Leader of the Opposition and a former Cabinet Minister signed off on the free-trade agreement with China. He was in the past a beacon of overseas investment I am sure going over to China many times over and actually telling those Chinese people to invest in this country. It baffles me to think why Labour cannot see its own creation is in fact working. The 2005 Act is working like the National Government is working and like most New Zealanders who work hard and hope to one day retire to our beautiful rural landscapes so the foreign investors and businessmen wanting to diversify their stock and set up somewhere can retire in peace while maintaining a strong connection.Some of the big investors in New Zealand—an example is James Cameron a recent appointment to the Screen Advisory Board and a resident here in the Greater Wellington region. Look at the owner of Matakauri Lodge in Queenstown Julian Robertson. He has done so much for New Zealand that we appointed him a rare Honorary Knight Companion of the Order of Merit for his philanthropy across our country. But the opposition of Mr Phil Goff is not about these gentlemen; it is actually Asian investment that he is worried about. It is a knee-jerk reaction to the housing crisis and I am appalled that he buys into that. I know that he does not believe that and hopefully he will wake up because he will need their vote if he is to have a hope of becoming the Mayor of Auckland. I oppose this bill.Mr DEPUTY SPEAKER: The balance of the calls are for 5 minutes.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Firstly that was an outrageous misrepresentation of a bill that is designed to offer a fair go to every New Zealander regardless of their race or background or ethnicity. Anyone in New Zealand requires some protection by a bill like this from what is a flood of potential foreign investment into this country. There could not be a more timely bill in this House—more timely than the one under urgency yesterday. Today we had an announcement of a likely $3 payout in the dairy industry. Tonight we went to a forum talking about the future of food in this country and it is all dependent on New Zealand’s ability to control its own destiny. I applaud my colleague Phil Goff who in his patriotic committed way has put into the ballot—and had it pulled out—a bill that “requires foreign investment to deliver benefits that would be over and above what a New Zealand investor would produce.” All it does is guarantee something that the National Government claimed it would put in place and has failed to do.Can I say that New Zealand is a nation built on farmers and farming families. They have worked they have innovated and they have sweated blood to build industries that are the envy of the rest of the world. The ownership of the land has been at the core of their passion and their commitment. We need to ensure that that opportunity still exists for New Zealanders into the future. Otherwise our economy is at risk.We had a Prime Minister who if you are to believe him made a quote that we do not want to become tenants in our own land—John Key himself. And then he is effectively—Hon Phil Goff: Oh that’s a racist comment.Hon DAMIEN O’CONNOR: Well we could perhaps believe that one comment. We too believe that. We too believe that we need to have a fair go for New Zealanders investing. At the moment we have got foreign investors able to access capital at half a percent or less—or hot money—who can come into this country and not face any challenge from the current Government’s Overseas Investment Office. Not one application of the 400 since this Government came into the House—not one of them—has been turned down.At the time of the Crafar farm debacle when John Key reiterated his view that we do not want to become tenants in our own land the Government said it would change the Overseas Investment Office criteria. The Government said that it had to move to protect New Zealand investors but it also said but did not tell us of course that it was going to move to protect applications for large farmsonly—large farms defined by the National Government as being 10 times that of the average New Zealand farm. The average farm is say 300 hectares. That is 3000 hectares and above that the Government would look carefully at. It is an outrageous promise not kept by the National Government and a promise that needs to be implemented to ensure that we have economic certainty into the future.Yesterday on the radio an economist Mr Geoff Simmons—I do not know him—was talking about the dairy industry dilemma at the moment. If I can quote him he said: “We will see foreign buyers come in and snap up land keeping the banks solvent and propping up the value of the land.” That is the reality that we are facing: investors throughout the world—David Bennett: No it’s not.Hon DAMIEN O’CONNOR: —with access to cheap capital—and that member knows that the Government is going to leave the doors wide open to the purchase of that land to prop up the values and save the banks. What we say and what my colleague Mr Goff is saying in this bill is that we need proof that any of that foreign investment will deliver greater benefits than a Kiwi of any ethnicity would—in spite of the outrageous claims by the previous speaker Melissa Lee—any Kiwi investor. They do not even have to be a farmer but at least they have to be a Kiwi. Any foreign investor has to deliver additional benefits.This bill is very timely because we are facing a tsunami of investment into this country—a country with no capital gains tax with farmers who will work 26 hours a day and that is a safe place for any foreign investment. This bill gives New Zealanders a fair go and it represents everything that Labour stands for. We stand for New Zealanders first and foreign speculators second.BRETT HUDSON (National): I rise to speak in opposition to this bill. Before I move on to the substance—the flaws—of this bill I would just like to acknowledge the Hon Phil Goff. He has a reputation for being an extremely diligent and hard-working member—Hon Christopher Finlayson: He had—past tense.BRETT HUDSON: —had—and for being a very capable senior Minister in the previous Labour Government. Mr Goff this is not your finest work.Before I move on to the flaws and the tests that this bill would apply I shudder. There is quite a chilling effect that has come with news in the recent week or so. There are some provisions in the bill as it stands at the first reading for how those to whom it would be applicable would be determined. Just this past week the House has had very good cause to consider that if this bill were to progress to a select committee and beyond the true test of applicability would actually be based on the sound of people’s names. That is an absolute disgrace. It is absolutely terrible to stand in the House this week after such postulation has been made over the past 10 days and after the Labour Party’s spokesperson for ethnic communities has been quite equivocal—quite equivocal—in his not quite condemnation of what his colleagues have done. That we could possibly look to change the applicability on the basis of what a name sounds like has quite a chilling effect.Let us now actually move on to the provisions of the tests of this bill and to how flawed they are. As the speakers on both sides have pointed out the test for a foreign investor who is wanting to buy land of 5 hectares or greater—rural land—would under this bill be what a hypothetical New Zealander might do in the future. How on earth can you run a robust test—particularly for people who say that they support foreign direct investment—on the basis of what someone who does not exist and is not in the market at that time might possibly do? Anyone could make up what someone might possibly do if in fact that person is not in the market at the time bidding for that sale. The only test that logically can be applied outside of fundamentally objective criteria such as the Overseas Investment Office uses today—that is “Will it create more economic benefit? Will it create more jobs?”—is to test against other participants in the marketplace. This bill creates a test against a hypothetical bidder—someone who does not exist—and it is open to purely subjective decision-making at any point in time. The bill is poorly drafted. Simply it would not really work.It is quite rich that this change is being suggested by a member of the previous Labour Government. I would like to remind the House that the previous Labour Government sold the equivalent of the whole 16 Crafar farms every month for the whole 9 years—9 long years—of the tenure of its Government and Mr Goff the sponsor of this bill was a senior Cabinet Minister in that Government. What we have and another reason that this bill is simply unnecessary is we have a current Overseas Investment Act. We have provisions for testing the value of an overseas bid to buy farmland in this country. It is an economic test. Will it create economic benefit? Will it create jobs or protect jobs? There is a real possibility particularly when you look at the receivership circumstances of the likes of the Crafar farms that keeping the work farm going as a working concern is in fact every bit as good as any other test because otherwise jobs would be lost.Let us look at how we operate this balance and how we are placed across other countries in the OECD that we would compare ourselves with. We have a very restrictive regime. The OECD rates New Zealand as the sixth most restrictive nation in the OECD for investment in land.David Bennett: What number?BRETT HUDSON: The sixth.David Bennett: The sixth?BRETT HUDSON: The sixth. So it is interesting to see that those members think that we have a problem that needs to be addressed. We are the sixth most restrictive today under a set of objective criteria.Hon Members: Say it again.BRETT HUDSON: The sixth—the sixth most restrictive. Just to remind ourselves that if we were to adopt a bill such as this investments by Haier or particularly in land by Mutt Lange or James Cameron would be rejected. Julian Robertson—they would all be rejected. The bill would not achieve what it would want to achieve in terms of an objective measure. It is a flawed idea. It is flawed bill. I oppose it.JAMES SHAW (Co-Leader—Green): I rise to take a short call on the Overseas Investment (Owning our Own Rural Land) Amendment Bill. The timing of this bill and the debate on this bill is really unfortunate given the controversy over the last 2 weeks about the purchasing of New Zealand’s housing stock by people from overseas. We have always said since the controversy broke that the issue is not one of ethnicity; it is one of property speculation. So it is unfortunate given that the controversy over the last couple of weeks has been primarily directed around ethnicity that that is leaking into this debate as well because otherwise this seems like a fairly sensible bill in our view.I would just like to say that in a previous speech Brett Hudson mentioned the OECD. It is good to hear him quoting the OECD which is an organisation that National dismisses every time we hear a report from the OECD on climate change. So now that he has imbued it with a sense of some usefulness actually it would be great to hear him get in and endorse the OECD’s reports on climate change which rate New Zealand’s performance extremely badly.In terms of why we are supporting this bill it is largely for the reasons that previous speakers on the Labour Party sidehave said. We are in a particularly unusual set of economic circumstances globally at the moment. Other countries around the world have engaged in successive bouts of quantitative easing which we did not so there is a great deal of essentially extra money floating around in the investment markets. There are historically low interest rates in most of our major trading partners—interest rates that are even lower than our own—making capital even more available and meaning that the global investment markets are awash with capital and looking for a safe haven. We are providing those markets with a safe haven for that capital. Because we have no capital gains tax to speak of New Zealand is a very easy place for that money to go in and inflate those prices which is why it is so hard for New Zealanders to buy into farms in New Zealand. We are like a goldfish swimming alongside a whale in terms of the availability of capital in this country to maintain ownership of our own land.I notice that the National speakers have protested greatly at this but I would like to point out—as previous speakers have done—that this Government came to power on a promise that New Zealanders would not be tenants in their own land and yet that is precisely what has happened in the face of zero action by this Government to either collect useful information or place any sensible restrictions on the ownership of foreign land such as is present in virtually all of our major trading partners. So if it is good enough for them we believe it is good enough for us.For the Green Party our policy is actually to not have sales of New Zealand land to non-resident non-citizens because as Mark Twain once said: “Buy land. They’re not making any more of it.” It is the one thing that we have that is special—David Seymour: It’s not true. There’s volcanoes near Hawaii.JAMES SHAW: —ha ha—to our own country and we should attempt to retain ownership of it in this country. Thank you.KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to speak on the first reading of the Overseas Investment (Owning our Own Rural Land) Amendment Bill under the name of the Hon Phil Goff which we are opposing. We want our economy to grow to be productive and to be internationally competitive. All this bill does is suppress all our plans.As my colleague Melissa Lee mentioned the Hon Phil Goff is well recognised in the ethnic community. We see him on a number of occasions and we attend a number of events together every weekend. I do not understand how Mr Phil Goff is going to face the ethnic community tomorrow if I have to believe the rumours that he is going to stand for the mayor-ship. What this bill is doing is that—Hon Member: His worship.KANWALJIT SINGH BAKSHI: His worship yes. How is he going to convince the ethnic community that he is not stopping them bringing in overseas investment? It is very important for us to have overseas investment—direct investment—so that we can have greater economic benefits for this country which will help with the growth of jobs will increase wages and will increase our GDP.This bill is unfair to the foreign investors. According to this bill they will be required to show that they would bring more benefits than the New Zealand buyer. We have already ensured that New Zealand’s sensitive assets are adequately protected and in fact we are already restrictive when it comes to foreign investment in land.Each year the amount of rural land approved for sale to foreign investors is less than half of what it was under the previous Labour Government. Let me highlight some of the important benefits that foreign direct investment brings to our country. First it drives the growth in wages employment and output. Profits generated by foreign direct investment contribute to corporate tax revenues in the host country. It allows the transfer of technology and it helps to promote competition in the domestic input market. Foreign direct investment is a source of capital to supplement New Zealand’s domestic savings. We are looking at ways to embrace foreign investors and this bill is going to drive our valuable investors away which we do not want.Labour itself was responsible for the sale of some of the main big chunks of land during its regime. Just now when my colleague was speaking the Hon David Parker was trying to say that Labour rejected many such proposals during its regime but he could not number them. In fact it was zero.National knows the importance of balancing the benefits of international investment with protecting the New Zealanders’ estate for the current as well as future generations. We already some have of the strictest criteria when it comes to approving the applicant and we do not believe in rejecting the potential investor on the basis of the country he or she belongs to.One more thing needs to be clarified which is that any investment done in any land in New Zealand does not mean that they will pack up the land and take it with them to their own home country. Overseas investors need to apply to the Overseas Investment Office for consent to purchase sensitive New Zealand assets. According to this bill if there is no New Zealand buyer who wants to buy the particular asset the foreign investor still needs to show how much benefit they are going to bring to the country. How is our economy going to grow if we are going to put such restrictions on foreign investors?This bill risks preventing the sale of some of the rural land to foreigners that would create jobs and would benefit New Zealand. We have been able to strike a balance between ensuring New Zealand remains open to business with the rest of the world in order to support jobs and higher incomes and tightening the rules for overseas investment in sensitive land. I oppose this bill.FLETCHER TABUTEAU (NZ First): I stand in support of this bill firstly because it is a form of flattery for New Zealand First policy. It represents policy we have stood for for 22 years. It represents policy that is common sense but unfortunately it goes only part-way. The frustration standing here tonight listening to the debate from the other side of the House is just beyond measure. It is so frustrating to hear those MPs describe this debate as having anything to do with race or ethnicity. There is no mention of race or ethnicity in this bill.David Bennett: Yes there is.FLETCHER TABUTEAU: No there is not. So the conversation is about foreigners buying land. Let us be clear about what we mean when we say “a foreigner” as well. Because if a New Zealander whether they be born overseas or whether like the speaker before they have been here for 70 years from Korea and are proud of it—that is a New Zealander buying a home or buying a piece of farmland in this country. That is a New Zealander and that is a Kiwi and it is not the conversation here tonight. We are talking about foreigners coming in and buying New Zealand land.Mr Bakshi spoke about foreign direct investment contributing to the New Zealand economy. The return on foreign direct investment payments going overseas totals billions upon billions of dollars. That is money leaving our shores—leaving our shores—because foreigners are coming in and investing in New Zealand. That is my next point. The National members do not know what investment is. They do not understand. I challenge them to give me a definition that is meaningful because a foreigner coming in and buying a New Zealand farm processing that material in New Zealand—usually with foreign labour—selling the proceeds of that labour and those resources overseas back home and then taking the profits back home is not an investment for New Zealanders. That adds nothing to this economy.David Bennett: Aw!FLETCHER TABUTEAU: Mr Bennett when the rest of the Waikato has been bought up by Americans Canadians Chinese—it does not matter where they are from. [Interruption] You probably will not have yours because you would have sold—[Interruption].Mr DEPUTY SPEAKER: Order! The member has the floor; he should be allowed to speak.FLETCHER TABUTEAU: Thank you Mr Deputy Speaker. The reality is that that type of investment would contribute nothing to the Waikato economy and for Mr Bennett to yell abuse at the sponsor of this bill is an insult to his constituents who know full well as farmers—whom I spoke to when I was there in Hamilton; I spoke to your constituents and they did not want to sell their farms to overseas owners or investors.What the problem was for them was that they are about to see—and it has been spoken about already—their property values decline. Nothing that this Government will do will counter that. Property values will drop and unlike in the past when New Zealanders were buying from New Zealanders whether the market was good or bad the reality is that now foreigners can come in and take advantage of these bad economic conditions particularly in our dairy industry for example. They can come in and take advantage of these terrible terrible circumstances that our farmers are experiencing and they can do it as has been said with the cost of the money being next to zero percent or maybe even 1 percent. We cannot compete with that and we actually should not have to compete with that.New Zealand First is flattered that this bill has been put in front of the House. It reflects a policy that we have held for years. What I wanted to say though just to add to the conversation at the end is that the Overseas Investment Office has not declined a single application. The criteria were supposed to be set at a high standard but the office is just not doing its job it would seem. We are here to limit the sale of rural land to foreigners—not to new New Zealanders wherever they may have come from; to foreigners. This bill is worthy of debate. It is worthy of moving forward and being taken to a select committee so New Zealand First will support this bill tonight. Thank you.Mr DEPUTY SPEAKER: Are you going to be long? I call David Seymour.DAVID SEYMOUR (Leader—ACT): I will just grab my notes. [Interruption] Ha—ha! I rise on behalf of the ACT Party in opposition to the Overseas Investment (Owning our Own Rural Land) Amendment Bill. I have to say that it is interesting to look across at the Labour benches and see a veritable line of popguns sitting in the front row when they have a howitzer sitting in the back row. And then I look across to the New Zealand First Party and I was going to say to those members that it may be too late for any kind of cerebral advancement but let us at least have some integrity. And did Clayton Mitchell not let us down in that regard tonight?But here is Phil Goff who has the brains—who has the brains—but I cannot believe for a moment that he really believes what he has just said. It comes down to the pronouns in the title of his bill: “Owning our Own Rural Land”. And the question is: whose land exactly is it? Because to listen to Mr Goff it would seem that we have actually a system of collective ownership. No matter that the vendor of the land who legally has the property title has considered their options has accepted a price and has decided to enter into a voluntary contract to make a sale. The problem is that this mystical “we” has decided they do not agree. Who exactly is that “we”?Well let us get down to the dirty little secret of the Labour Party in the last 2 weeks and this bill in particular. It is attempting to do something that is legally impossible and that is to identify the culture and the genetics of the person who has the beneficial interest in the ownership of a piece of land. That is what it is really about. And he did not mean it to come out but it came out. Sometimes if you have to say you are a lady—as Mr Tabuteau knows—you are not. When he said “I would like to list the Australians the Americans the Canadians the British and all of the white people who invest in land.” what he was really doing in a rather Freudian sort of way was explaining to the House that he was not really interested in the culture and the genetics of those who hold the beneficial interest in the piece of land—oh no no because he is not like that; he is a howitzer a cut above the popguns in the front row of his party these days. But unfortunately in a rather Freudian way he did not want the truth to come out but he let it out.That is what this bill is fundamentally about in contrast to the history of our country—a country whose history is a history of foreign investment. It is a country that has relied upon injections of foreign capital as you would expect it to being at the far edge of the world. It is a country that has paid a 2 percent premium on foreign capital throughout its history which explains much of the New Zealand productivity paradox. It is a country that as mentioned by the very fine member Brett Hudson—who is generally a socialist but who joins the ranks of the free marketeers tonight—is 49th out of 54 when it comes to permissiveness for foreign investment much of which is due to restrictions that are already around land. The countries that ranked worse than us in permissiveness for foreign investment are countries such as Indonesia Saudi Arabia and the always nationalistic Japan. Those are the countries that are more restrictive than us. To go worse than that would be inimical to the interests of New Zealanders and particularly the vendors of New Zealand land who have every right to sell it to whomever they please no matter what their cultural and ethnic origins may be. What a shame that—Mr DEPUTY SPEAKER: I am sorry the member’s time has expired. [Interruption] The member will resume his seat.SIMON O’CONNOR (National—Tāmaki): I look a bit surprised because we were actually expecting the Labour Party members to take a call or the Green Party members perhaps but it seems that they have become a little bit embarrassed about this. Actually James Shaw referred earlier to one correct thing and one not so correct thing which I think provides some context. The first was that he said the Overseas Investment (Owning our Own Rural Land) Amendment Bill was coming in with unfortunate timing because of announcements by Phil Twyford and Andrew Little last week about foreign buyers based supposedly on Bayesian mathematics but really based just on—David Seymour: Bayesian?SIMON O’CONNOR: Bayesian is it?David Seymour: Is that a German name?SIMON O’CONNOR: Well you never know. It is shocking that they may have used a foreign name to explain what they were doing. He says that it was unfortunate. I do not think that it was unfortunate. Actually I think that the bill that is being discussed tonight and Labour’s use of foreign names to try to set that policy and to discriminate exposes the heart of what they truly think. I think that will provide a challenge for Mr Goff when he has to stand up in front of the people of Auckland including those of my constituency and explain why discrimination can be had based on words and letters alone and the way that they are structured.The second thing that Mr Shaw talked about was that no more land is being created. David Seymour pointed out correctly the Hawaiian volcanoes but I also should note to the House that we have of course the islands in the South China Sea which are doubling each week as they are being built upon.David Seymour: Always take geography seriously.SIMON O’CONNOR: Always take geography seriously. That is why I am very pleased to have a degree or one of my majors in geography—human geography it must be said. Look it is no surprise to the House that I—[Interruption] No I did study Latin Minister but I did not get a major in it; Greek French Māori and Fijian as well but again no majors.I oppose this bill. Actually I think the first point—and I will re-highlight what the leader of the ACT Party said—is that the title betrays one of its great faults. This is not our land—OK? It is not our land; it is a person’s land. It might be a natural person; it might be a family trust. But it is not our land. It is not as if Phil Goff the Labour Party the Green Party or anyone else somehow has rights over it. At day’s end—and I have said this at times to my own constituents who get a bit upset about foreigners buying land—it is New Zealanders who actually make the free choice to sell it to someone else. No one has put a gun to their head and said: “You must sell to an overseas buyer.” The land that we are talking aboutwas private land—farms like the Crafar farms are a perfect example. The Crafar farms were private land. It is not Government land; it is private land. And for a variety of reasons they chose to sell it. But again it is a bit like the unfortunate nature of the comments around race: the Labour Party members do not believe in private property rights. They believe that they know best and they want to tell you how to run your life your land your showerhead pressures and everything else. It is a disgrace.They also forget that we live in a global environment. The honourable member who has proposed this bill understands this because he has been the champion particularly through the Labour Party of free-trade agreements. The thing about free-trade agreements is that you trade freely. You engage freely with your foreign neighbours. Just as we will seek New Zealand to invest we are open from our side to having people purchasing here in New Zealand. We have heard very good examples from colleagues on this side of the House of foreign people buying businesses and land here. We know about the Crafar farms and we know about Haier which has become quite involved with Fisher and Paykel Appliances. I do not have the exact numbers here but they are just a couple of examples where foreign purchasers—foreign capital coming into New Zealand—is helping not only those businesses but also New Zealand. It makes sense. Again we live in a global environment. Our strength comes from dealing with other people trading capital.I do not want to get into economics; I leave that to others. But we do not want to return to a state of autarky—not Ōtaki but autarky—where we close our borders and we all wear the same uniforms drive the same cars and go down to some Labour Party welfare office to collect our bottle of vodka and one potato a day. I oppose this bill.STUART NASH (Labour—Napier): It is pretty obvious that members on that side of the House have not even read the bill. They got to the title and went “OK let’s look at the notes that the research unit sent.” The vast majority of the nonsense that that party and those last speakers have spoken does not even relate to the bill at all.In fact I think it is quite easy to mount an argument that the sponsor of this bill Mr Phil Goff has done more for international trade than anyone in this House—than anyone over the history of this Parliament. Mr Goff was the man responsible for the New Zealand - China free-trade agreement. How can anyone accuse Mr Goff of racism of xenophobia or of anything except putting New Zealand’s interests first—and this is exactly what this bill does. This bill puts New Zealand’s interests first—nothing more nothing less—and we in the Labour Party believe that we have an absolute right as representatives of this nation to look after the rights of New Zealanders.To say that we are racist and to say that we are xenophobic simply means that you have not read the bill you have not understood the bill at all you have not understood the purpose of the bill and you have also not understood the purpose of the Overseas Investment Act. All Mr Goff’s bill does is ensure that those who buy our farmland—and it is our land; as New Zealanders this is our country—add value that they add value to our land that they do not come over here and rape and pillage.There is already an Overseas Investment Act which does this but we do not think it goes far enough. It is simply because the Minister himself who has provided a letter to the chief executive officer of the Overseas Investment Office to give that chief executive officer direction on policy initiatives has said: “Don’t worry about the small farms. Don’t worry about the average farms. The only thing I want you to put any effort into is the really really large farms.” We do not think this is right.We absolutely believe that New Zealand’s global competitive advantage relies on the fact that we are excellent farmers that we add significant value and that we provide a product to the world that is first class. We are not saying “Close the borders.” We are not saying no to overseas investment. We are not saying that overseas investors cannot buy our farmland. That is the last thing we are saying. What Mr Goff’s bill does say however is that it is a privilege to own land in New Zealand which of course is the purpose. If you read the purpose statement of the Overseas Investment Act it says it is a privilege to own or to be able to invest in New Zealand and to be able to take advantage of that privilege to be part of that privilege to earn that privilege an investor has got to be able to add value over and above that which can be added by New Zealanders.That test is already in place. That test is in place. All Mr Goff’s bill does is tighten it even further to ensure—to ensure—that those who are not born here but want to invest here and want the privilege of owning sensitive New Zealand land live up to that privilege and that they add value so all New Zealanders know that people who want to call New Zealand home and want to have a balanced portfolio that includes New Zealand farmland understand absolutely what that privilege means. And that privilege means that that overseas investor has got to be able to add value over and above that of a Kiwi.The thing that Mr Goff’s bill does is that it emphasises jobs—is there anything wrong with that? Is there anything wrong with emphasising jobs? And it emphasises the economic imperative—i.e. you cannot come in here and run down our farms and take our land or our people or our economy for granted. In fact you cannot do that. You have got to come in here and you have got to make sure that New Zealand jobs are protected that you create New Zealand jobs and that the economic benefit that is going to be created is real. Is there something wrong with that? I do not think so. In fact I think the vast majority of New Zealanders actually get the fact that Mr Goff’s bill protects the interests of New Zealanders. That is all—nothing more nothing less. We think that is fundamentally important and that is why we support this bill.Hon PHIL GOFF (Labour—Mt Roskill): Clearly the research unit of the National Party faced a dilemma when it was drafting the identical notes for the National Party backbench. The dilemma is this: fundamentally the National Party understands that New Zealanders support the approach that I am proposing in the Overseas Investment (Owning our Own Rural Land) Amendment Bill. I say that not as a rash claim; the New Zealand Herald has run a Herald-DigiPoll on this bill and it shows that 55 percent of New Zealanders support it and 33 percent of New Zealanders oppose it. That means that there is cross-party support for this bill.I reckon if I went to David Bennett’s electorate in Hamilton East and talked to his farmers they would have something to say about this and they would be positive about it. In fact I saw the president of Federated Farmers—known elsewhere as the “National Party in Gumboots” but the president is a very fine guy—William Rolleston warning New Zealanders about the risks of wholesale loss of land to overseas investors. He was telling New Zealanders about vertical integration where foreign individuals or companies owned everything from the farm right down to the supermarket shelves and the risk that that posed to New Zealand’s interests. That was from Federated Farmers. I heard the mogul of the free enterprise world. He had a very spirited dinner I think. I was going to ask for an interpretation of his speech. I looked to the National Party benches and they could not help.The two freest market economies in the world are probably Hong Kong and Singapore—both Chinese by the way which is apropos of nothing. They place restrictions on foreign ownership of lands and residential properties. This is not unusual. Any Government that is worth its salt puts the interests of its residents before the interests of foreign investors. We will have foreign investment in this country where it is good for New Zealand. But where it simply forces up residential property prices or forces young New Zealanders to remain the sharemilkers and the employees instead of the farmers we will unashamedly stand up for New Zealanders. We give no apology for that whatsoever. The National research unit had a choice. It thought it could either say this bill is no different from what National is doing and National tried to run that line or say this bill is fundamentally racist and it tried to run that line as well. But unfortunately those two arguments are mutually contradictory.I want to say that New Zealanders have had a gutsful of people who play the race card in reverse. Let me give you an example. There is a well-known property developer in Auckland who this week was rack-renting trailer homes where 14 people were forced to share one toilet to new migrants.Hon Members: Oh!Hon PHIL GOFF: That was wrong. That is wrong in anybody’s language. But because that property developer happened to be Donghua Liu when he was criticised we were told that that criticism was racist. That criticism was not racist. That criticism was criticism of an individual regardless of his ethnicity who was behaving in an inappropriate and unethical way—Mr DEPUTY SPEAKER: Come to your bill.Hon PHIL GOFF: —and I will not accept any criticism from any member on that party which ran the “Kiwi not iwi” ads and stood behind Don Brash and that man. I will not take any criticism from those people at all. There is nothing in my bill that discriminates against any New Zealander. What it does is it acts on behalf of every New Zealander. I have talked to my Chinese constituents and my Indian constituents and they think that it is a good idea that New Zealand should own its own future because those Chinese and those Indian constituents are proud to be New Zealanders and this bill stands up for New Zealanders. So do not come at me with a cheap and shabby criticism that is not worthy of many of those people on that bench who should know better.What this bill does very clearly is what the National Party promised to do but failed to deliver. It says and the Overseas Investment Act says that owning land if you are a foreigner is a privilege and you have to earn that privilege. The way you earn that privilege is by showing that you produce substantially more jobs or substantially more exports. If you cannot come up to that standard do not come here—Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has expired. [Interruption] The vote will be heard in silence. It is not that long since a certain member was ejected for not doing that. He has just done it again. He is on notice as are others who are interjecting in the course of the vote. Please complete the party vote.A party vote was called for on the question That the Overseas Investment (Owning our Own Rural Land) Amendment Bill be now read a first time.Ayes 60New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.Noes 61New Zealand National 59; ACT New Zealand 1; United Future 1.Motion not agreed to.