Overseas Investment Amendment Bill

Thank you, Mr Chairman, and I’m looking forward to an extensive debate on this important and, frankly, appalling piece of legislation that’s in front of the committee. There are a number of very serious concerns on this side of the House, and as we work our way through the debate on Part 1, I can tell the committee that we have quite a large number of amendments that my colleagues and I have been working on to try and rescue, frankly, this bill from the state it will return to the House in.

This amendment to the Overseas Investment Act broadly came about because the Government had a view that it was overseas buyers of residential property that was the whole of the housing problem in New Zealand and that it was as simple as getting rid of those terrible buyers with Chinese-sounding surnames, and if we simply stopped all those Chinese-sounding buyers from buying houses, as Mr Twyford said—in an appalling show of stereotyping and nationalistic fervour, without any evidence at all—then the problem would be solved. Well, the problem that the Government has, of course, is that the data just doesn’t back that up. In fact, we know that the non-citizen, non-resident buyers of residential property in New Zealand sits at around 2.8 percent, and when you net off the number of sellers, foreign sellers, of residential property, it barely cracks much over 1 percent. This is not the issue with housing affordability in New Zealand.

The very simple way of describing the solution required to make housing more affordable is to build more houses. It’s not rocket science. You don’t simply stop demand for New Zealand houses. You don’t simply come along and say “Well, let’s just stop anyone wanting to buy a house in New Zealand.”, and worry about those 1 or 2 percent that New Zealand First likes to get their dog whistle out and shout about. Actually, the challenge is to grow housing supply in New Zealand, and here’s the thing: much of the capital that comes into New Zealand to grow the housing market comes from overseas. A lot of the capital that New Zealand developers are relying on to build houses is foreign capital.

And what has this Government done as their solution to address home building in New Zealand? They’ve put up a big “No foreigners welcome here” sign in the foreign capital market. They’ve made it very clear to the rest of the world that New Zealand is closed for business—New Zealand doesn’t want foreign money coming in and building new houses. We don’t want foreigners coming and setting up their business here. We want, frankly, to go back to this little closed-off, isolated, blinkered 1970s view of the world, which we know New Zealand First still believe were the good old days.

Well, on this side of the House, we do believe that New Zealand should be open and facing the world, and we understand that it’s foreign investment that has been a big part of driving the wealth and prosperity of New Zealand. And we certainly don’t want to say to those foreign capital markets “Don’t come in here. Don’t support building. Don’t support the growing of the housing supply.”, and that is what this bill does. It is a ridiculous dog’s breakfast of a bill.

All the way through the select committee, my colleagues and I on the Finance and Expenditure Committee would put to officials sensible questions about how it works and how it is going to apply in practice, and the only thing they could tell us was “Well, that’s what the Government’s told us to do.”—no understanding, no practical implementation. They themselves knew, I think, that it didn’t make sense. The only advice they could give us when we asked them “How’s this going to work in practice? What modelling have you done on the effect of this?” was a blank look and a somewhat embarrassed “Well, that’s what the Government has told us to do.”

No thinking, no analysis, no advice, and no impact; just a dogged, blind determination to stick to their predetermined position that foreigners are the cause of the entire problem in New Zealand. Who cares that it will stop house building in New Zealand, or that it will reduce the number of houses being built? Who cares that we’re going to set up a big “Go away, rest of the world” sign on the front of our economy, as long as Mr Parker and the Labour Party can stick to their absolutely head in the sand view that this will somehow magic away all of the problems?

The bill simply doesn’t work. We saw a change made at the select committee that allowed a certain number of properties to be sold off the plan in large-scale apartment developments, but you’ve got the strange situation where foreigners can now own these units and foreigners can live in these units as long as it’s not the unit that the foreigner bought. So this bill—which, apparently, is going to address the evil of foreigners owing property in New Zealand, which, apparently, is behind all of the concern—is still going to allow foreigners to come in, buy large numbers of apartments, live in large numbers of apartments, and yet somehow it’s all fixed. So we have a bill that simply does not even follow its own mantra. It doesn’t work, will not make a difference, and, in fact, will make housing worse.

I want to talk about the change to the bill brought into the select committee through the Minister’s Supplementary Order Paper 19 to introduce what’s called profits à prendre into the legislation. I know there are a number of lawyers in the committee, including the Minister, but for those who aren’t, a profit à prendre, in its most simple explanation, is simply the legal right to use the land and to take the commercial returns from it without owning the land. It’s most commonly seen in things like forestry rights, but, actually, it is used in a number of areas. So the Minister’s explanation is that we need to include profits à prendre in the legislation in case in the future any future Government would want to. But, again, there is no analysis whatsoever of the economic impact of bringing in profits à prendre beyond the forestry sector.

It is an unbelievably disjointed approach, so that while forestry—who we know very well has a number of strong supporters in particular coalition partners in this Government—is brought in, we then had officials tying themselves up in knots, doing everything they could to make sure that the forestry interests would be not at all inconvenienced by this change. So, in fact, now, a profit à prendre in the forestry space doesn’t even need to come under this legislation until it’s 1,000 hectares. But for anyone else, any other poor sop trying to make their living in this country from the land, well: “You’re in at 5 hectares.” Again, we asked officials, “Why is there a 5-hectare limit for things like viticulture, horticulture, kiwifruit, wine? What’s the analysis that justifies that?” The answer: “There is none. There is no analysis. It’s just what the Government told us to do.”

So you very quickly got a clear sense that this Government will look after certain people and certain interests, but in terms of concerning themselves with the economic impact and the economic rationale, or even taking the time to understand the economic rationale, they couldn’t be bothered. They couldn’t be bothered getting it right. As long as the forestry sector was happy, then this Government was happy, and not only have we seen in this legislation the most remarkable acrobatics to ensure that forestry is protected by the number of hectares limit that now applies but we’ve seen pathways that apply only to forestry.

Forestry owners now, while they might technically be brought into the legislation, can go along and get a pre-approval off a checklist. So if they rock up with a checklist and say, “Well, we’re going to buy some land. I’m not sure where and I’m not sure how much, but don’t worry, we’ll have it in forestry.”, that’s OK. But every other owner of land in this country, whether they’re setting up a vineyard, as I say, or planting kiwifruit—if they wanted to use the same process: “Oh no, no, no. That’s not available.” They have to go through the full counterfactual assessment. They have to go through all of the hoops and expense and cost and delay of a full Overseas Investment Office process for no good reason other than that Mr Parker thinks, “Future Governments might want to have that, so we’d better chuck it in.”

Never mind that we might completely scuttle some of those primary sector industries. I mean, why would you care? This Government clearly is not that worried about scuttling large parts of our economy. What’s a couple more sectors on the bonfire? I mean, we’re already talking about large-scale destruction of much of the primary sector. We’ve seen the oil and gas sector completely haemorrhage. We’re seeing them now rip the guts out of the building and construction sector, which is why the construction sector numbers are so low. We’re seeing unemployment rates up today. Why not chuck another sector on the bonfire? Who cares about viticulture? Otherwise, why would they not get some analysis? Why would they not even ask the question, “How is this going to affect any of these sectors?”

The Government simply doesn’t care, and that is the tragedy of this legislation. It is poorly thought through, it is ideology gone mad, it is head in the sand adherence to bumper sticker slogans that they’ve been running for nine years without understanding them, and now New Zealand is going to pay the price. This is appalling legislation. Not only will it not do what it claims to do; it will make the situation worse.

It is yet another example of a Government that hasn’t done the work, that doesn’t understand the ramifications of what they’re doing, and that hasn’t taken the time to ask for the analysis of what they’re doing, and they certainly haven’t been prepared to listen to the very valid concerns of a number of those sectors who came before the select committee and said, “This is a problem.” There are certainly some areas where they’ve been very careful to look after particular interests—and that’s something we’ll be exploring a lot more as this debate goes on—but this is very bad law.

For the past four years, this Parliament has been subject to a campaign that says that it is foreign buyers that have been at the core of New Zealand’s housing challenges. We had the disgraceful Chinese-sounding names debacle. That made me truly ashamed to be a New Zealander.

💬 Michael Wood: Many more things you should be ashamed of.

I hear a member who’s interjecting, like Michael Wood, who claims to stand on a platform of diversity, who is more than happy to target his Chinese constituents for a bit of cheap politics. Now let’s go back to the claim—

💬 Michael Wood: I raise a point of order, Mr Chairperson. I take exception to the remark that was just made—that I target my Chinese constituents for political gain—and I would ask that that remark be withdrawn.

CHAIRPERSON (Adrian Rurawhe): I’m going to take some advice on this. I think members are on very thin ice, making those kinds of remarks—[Hon Dr Nick Smith stands] I’ll just finish. There were—I didn’t quite hear the comments, but I just want to warn Opposition members as well. Making accusations around racism is not acceptable. I think we all should think carefully before we speak, and I call back the Hon Dr Nick Smith.

Mr Chair, I still invite Mr Michael Wood to apologise to the Chinese community for the disgraceful campaign that was run by Labour members in which they claimed that 40 percent—

💬 Hon Carmel Sepuloni: I raise a point of order, Mr Chairperson. You gave a very gracious ruling and warned the Opposition. He has continued to go down the track that you warned against, and I take offence on behalf of my colleague.

Speaking to the point of order, Mr Chair, you would have been in the House when I was subjected, as the then Minister, to the claims that were made by Labour at the time that 40 percent of house sales in Auckland were to Chinese—

💬 Hon Carmel Sepuloni: This is irrelevant.

—ethnic people. Oh, it’s very relevant, and this is the core—

CHAIRPERSON (Adrian Rurawhe): Order! Everyone settle down, OK? A couple of things: points of order are taken in silence; speaking to points of order is also done in silence. The Chair is the sole judge of that. I’m listening carefully to everyone’s contribution. I’m listening really carefully. I’m going to make a ruling. I think I’ve heard enough. I’m going to go back to the original point that I made, and members need to be very careful. Dr Nick Smith, I do ask—you have stated now, twice, what you have said. I think that is enough, and I’d like you to come back to this part of the bill.

The origin of this part of the bill was a campaign by Mr Phil Twyford in which he claimed that 40 percent of house sales were to people with Chinese-sounding names, and my colleague would note the offence that was taken at the time, very widely, by the Chinese community to that campaign. My concern is the vast gulf between those claims by Labour—the now Government—and the reality, because we collected very detailed data. For every single transaction for the last four years, we know the tax residency of every one of those house buyers. I want to make the comparison between the facts and Labour’s claim, because I’m here to base it on evidence-based decision-making.

Now, what the evidence—and I’ll read the exact numbers. In the course of 200,000 land sales in the last year, 2,672 were purchased by people of overseas residence, and 2,658 were sold by people of overseas residence. So in the entire year of 200,000 land sales, there was a shift in overseas ownership of a net 14 houses. Now, when members opposite described it as a tsunami—a tsunami—of Chinese, I do not accept that the change of ownership of 14 houses in one year is anything like a tsunami. I will say it again: members opposite owe an apology to the Chinese community for that unwarranted attack on them.

But it gets even more interesting when we ask the question in that reliable data as to how many of them there are and where they came from. Do you know what the largest group of overseas investment in property is? It’s those bloody Australians! Is there anything in this bill that changes the investment in New Zealand property by Australians? Well, I would love a member to describe—maybe the Chairman will—why it is OK for an Australian to speculate in New Zealand property—

CHAIRPERSON (Adrian Rurawhe): Order! Do not bring the Chair into the debate.

What moral superiority does an Australian have in the New Zealand housing market over those that may be from the UK, the United States, Japan, China, or any other country?

But here’s the part that’s got me truly gobsmacked. For the last two or three years, Labour members have said that that data was a nonsense. I stood up in the House and would have answered at least 20 questions from Labour members saying the data that is prepared and collected by Land Information New Zealand was inaccurate. So I choked on my Kornies—I choked on my Kornies—when I heard a statement from Mr Twyford: “The data is now reliable.”—the same data is now reliable and can be relied upon. That is truly shameful, and yet that is the foundation of the law change that we are being asked to make in classifying all residential land as sensitive. [Member trips and falls off step] My colleague Amy Adams—

💬 Hon Member: Are you all right, Barbara?

She’s fine. Farming type—very tough! My colleague Amy Adams made the point that if you are serious about improving New Zealand’s housing supply issues, then the key thing is to get more houses built. So if you look at the last five years—

💬 Darroch Ball: That’s a bit rich.

Well, let’s have the numbers. Let’s have the numbers. The number of houses being built when Labour left Government was 13,000 per year, and, do you know, that number grew by 15 percent per year every single year for the last six years of our Government. It grew from 13,000 a year to 31,000 a year. And here’s the remarkable part: there is not a period in New Zealand history when the growth in new home construction has been as long or as strong. There’s never been a period like those five years. And members opposite—I simply ask the member from New Zealand First, well, when was it stronger?

💬 Mark Patterson: What was the population growth?

Wow! I’m fascinated that the member from New Zealand First asked a cheeky question—

💬 Rt Hon David Carter: What’s his name?

Look, sorry, I don’t know the member’s name. He hasn’t contributed much. I’ve been on at him to take a call. But here’s the question I put to him: New Zealand First campaigned on reducing New Zealand’s net immigration to 10,000. They’ve been in Government for nine months. What have they done?

Nothing.

Absolutely nothing. I would ask the member who’s interjected: what have you done? The silence is absolutely deafening. This is a member who will poke his head up, but when it comes to actually doing what he told electors he would do, he has not delivered on that.

So we have had a very strong record of new construction in housing. That growth is continuing—200,000 homes are projected to be built over the next six years—and here’s the tragedy: the provisions in this bill over the past six months have raised significant uncertainty to the point where, actually, it has slowed the level of investment in new home construction. The very thing that will make the material difference for Kiwi families, whether they’re renting or they’re buying, has been compromised by the provisions that are in this part. The Government has failed in that its policy has been about bumper stickers and not about the substantive policy that will make a material difference for New Zealanders.

The very last point I make is that if this were the answer, Australia wouldn’t have the same housing issues that we have. The reality is that this is not the answer to the housing challenges that New Zealand faces.

When the Labour - New Zealand First - Green Government took over nine months ago, we inherited a country with the highest rate of homelessness in the OECD.

💬 Stuart Smith: That’s rubbish.

No, it’s not rubbish. That is correct. I was embarrassed to have to admit that when I was at a meeting at the OECD recently, and I was ashamed that in a country as wealthy as New Zealand, I come from a country that has got the highest rate of homelessness in the OECD. We’ve also got the lowest rate of homeownership since the 1950s, and it continued to go down every year—

💬 Hon Dr Nick Smith: That’s just not true.

—and in the last year—it is correct. Dr Smith, the former Minister of Housing, is denying that we’ve got the lowest rate of homeownership since the 1950s. In addition to that, the multiple of price to income is the highest it has been in New Zealand since I was born, and I am 58 years old. Despite all of that, the last Government could not admit that we had a housing crisis, despite the fact that it seems like Simon Bridges might now admit that New Zealand faces a housing crisis. Despite that, the National Party, in Opposition, opposes every measure that we do to address the problem that we have inherited. Whether it’s supply initiatives like KiwiBuild, whether it’s changes that we propose to the Resource Management Act—you watch; they’ll oppose those too—or whether it’s measures to control overseas ownership of New Zealand land assets, the National Party will oppose it, and today is a case in point.

There is some urgency for the passage of this legislation brought about by the Comprehensive and Progressive Trans-Pacific Partnership agreement (CPTPP). The CPTPP is an agreement which includes—

💬 Hon Members: TPP.

These people on my left—you know, anything bigger than three words and they can’t string it together: the Comprehensive and Progressive Trans-Pacific Partnership agreement. They will understand one day that that agreement includes a provision that prevents the New Zealand Government, after that agreement comes into force, from adding new classes of investment that fall within the screening regime of what the New Zealand Government can control in respective inward investment. The effect of that was that if New Zealand was to sign up to CPTPP—as the current Government has chosen to do—but didn’t fix the holes in the New Zealand screening regime, then the ability to include new classes of asset to be screened would be lost. Not only would it be lost in respect of CPTPP countries; it would be lost in respect of earlier countries that we have free-trade agreements with that have got most favoured nation clauses in their agreements, including the agreement with China.

Now, when I say the word “China”, you can bet that the National Party will accuse me of racism. Interestingly, the New Zealand – China free-trade agreement includes a provision that allows China to ban New Zealand buyers of their homes. And, in fact—

💬 Hon Judith Collins: And who signed that?

The Labour Government signed that—the Labour Government signed it—and that agreement with China allows New Zealand to ban Chinese buyers of New Zealand properties. Indeed, since that agreement was signed, the Chinese Government has, wisely, chosen to ban New Zealand buyers of residential property in some of their major cities, because they recognise that those housing markets should be for the benefit of Chinese citizens, not New Zealanders buying in China.

Now, because the provisions of that particular part of CPTPP were locked down by the prior National Government’s negotiation of those terms, we couldn’t change the clause which says you can’t introduce new classes of screening after it comes into effect. But what we could do was change those investment classes before it comes into effect. We had to signal that before we signed up to it, and we did. We have to legislate for those new asset classes before it comes into effect, or else the New Zealand Government, effectively, loses the power to introduce new classes of screening for ever.

The two classes of screening that are covered by this bill are residential homes, which are not currently screened in the overseas screening regime but will be under this bill, and a certain class of forestry asset called forest registration rights. Now, I want to deal with forest registration rights, because the Hon Amy Adams is just wrong in respect of her analysis here. Any freehold or leasehold forest can be purchased through a forest registration right. A forest registration right can cover a freehold forest or a leasehold forest. A forest registration right can exist for multiple rotations, so if you had three rotations, that’s 90 years of control of forestry land through a forest registration right. A five-year lease of that same forest is already covered by the screening regime. It is nonsense to pretend that you have a screening regime in respect of forestry assets if you do not include forest registration rights, because it becomes a completely ineffective regime because you can buy the same asset via a forest registration right. That is why we are including forest registration rights.

Now, it is also true that the New Zealand forest industry—particularly the forest ownership industry—is heavily reliant on foreign direct investment. It’s about 70 percent foreign-owned at the moment, and we want to plant more trees. We need more foreign direct investment in order to plant more trees.

💬 Hon Amy Adams: So you want trees but you don’t want houses? Brilliant. Trees but not houses—that’s just brilliant, Mr Parker.

Well, actually—she says, “Trees but not overseas investment in houses.” We do see a difference; the National Party might not see a difference. The National Party should already understand that there are differences between different classes of investment under the Overseas Investment Act, but, in truth, we need more foreign direct investment in forests. It is also true, though, that a future Government might think, “Wow, if foreign direct investment got to 90 percent of our forests, might we want to intervene?” I would suggest that it would be irresponsible of this Parliament not to pass this legislation to give a future Government the sovereign right to intervene to control foreign investment in forestry. You can have too much of a good thing, and if we had not introduced this legislation, in effect, a future Government would not have the sovereign space to do that, because CPTPP would stop it doing that, and it would also flow into earlier agreements pursuant to most favoured nation clauses.

Can I say something about what was said in respect of the number of houses that were sold. I’m sure this will come up again, but the latest data showed 20 percent of central Auckland houses were sold to foreign buyers—

💬 Hon Judith Collins: Not houses; apartments.

—excluding houses that were sold to corporate vehicles, because they don’t count the corporate purchases yet—20 percent. The Hon Judith Collins says that’s apartments. Yes, it is partly apartments, but it’s not wholly apartments.

Twenty percent must be moving the market. It must move the market—it must be affecting the marginal transaction. We don’t know by how much. We know that that 20 percent is less than it used to be. When the market was really hot, and the National Party refused to move against this, the market going to foreign buyers in Auckland was much higher than the 20 percent that it is now. We don’t know the actual percentage—we never will—but we know it was higher than that. Indeed, North & South had an issue last week that recorded that as a consequence of China closing down its outward capital flows, the flows into the Auckland property market decreased—effectively, proof that although you might disagree whether it was 40 percent or 30 percent, there’s no doubt that it was higher than the 20 percent now, and it was significant.

I used to rail against foreign farm sales when I had responsibility for that portfolio in Opposition, and I would complain about US purchases. No one accused me of racism. I would complain about French purchases and English purchases and German purchases, and no one would complain about racism. I complained about Crafer farms being sold to Chinese buyers, and I was accused of racism. It was exactly the same argument—exactly the same policy issue. It’s a very easy issue to try and rark up racism around, as the National Party tries to do, but, actually, the underlying theory here is that New Zealand land assets should be sold on a New Zealand market. If you’ve got the right to live here permanently, you’ve got the right to buy here.

Why do we exempt Australia? It’s because they exempt us. We’ve got the right to live there; they’ve got the right to live here. We’ve got the right to buy there, even though they’ve got a foreign buyer ban on residential as well, and we’ve got the same thing.

The National Party are completely wrong here. They’re on the side of foreign buyers who don’t pay tax here, don’t live here, but who outbid New Zealanders.

I call the Hon Judith Collins.

Good choice, Mr Chair, might I say. It’s great to take a call after that contribution from the Minister in the chair, the Hon David Parker—

💬 Hon Amy Adams: It would make you look very good.

Yes, well, it certainly is a land of opportunity for looking good following David Parker, I would have thought. One of the problems that he’s discussed—and I’m going to talk about this because he’s raised it—is the properties sold and bought in Auckland’s central business district by foreign buyers. He’s used it as evidence of all these foreign buyers buying, and he has, rightly, referred to the fact that I have called out and interjected that most of those are apartments—and, of course, they are.

For those who don’t live in Auckland or don’t travel to the Auckland CBD, it’s very hard to find a house in the central business district—there are a couple in Parnell, but not that many—but there are an awful lot of apartments. That is actually where we would’ve thought we needed people to come in, with capital, to help the developers get enough pre-sales so that they can get their apartments built. What’s actually happened in New Zealand in the last few months is that all new apartment building developments have essentially stopped, not got off the ground if they hadn’t started, and even some of those that have started have now stopped. The reason for that is not because New Zealanders don’t buy apartments, but actually because New Zealanders generally don’t buy apartments off the plans.

In New Zealand we need to have overseas capital, overseas buyers to come in and buy off the plans. That has now been recognised, after many submissions to the Finance and Expenditure Committee, and the Government is now making an exemption for foreign people to come in and buy apartments off the plans in the areas where they want them to. So they’re buying off the plans, but, unfortunately, they can’t live in them. That means we can have the ridiculous situation where one person can buy an apartment, rent it out to their foreign friend, and that foreign friend can buy an apartment and rent it out to the first foreign person. They can’t actually live in their own one, but they can live in their neighbour’s one.

The whole thing is a complete mess. It marks the low-water mark of the Labour Party’s policy machine, because this policy was actually built on a Chinese-sounding name survey that the Labour Party’s Phil Twyford and his staff member Rob Salmond ran in their last year in Opposition. They ran that campaign to build up hatred against foreign people, and particularly Chinese. They did not run a campaign against Indian-sounding names. There were no Lithuanians picked out. There was nobody else—

💬 Hon Member: Irish—lots of Irish.

Lots of Irish—oh yes. They never looked for the Irish, but they did choose the Chinese-sounding names. Anybody with a name like Young or Lee—Denise Lee, for instance. My colleague Denise Lee was suddenly marked as a Chinese-sounding name. That is a level of discrimination that was applied by a major party in New Zealand.

Let’s have a look at what has actually occurred since then. Well, a lot of people are no longer buying in New Zealand, which is why now, suddenly, the welcome mat has gone out to foreigners to come and buy off the plans, in apartment blocks—which, by the way, they are not really buying at the moment, because they got the message that they’re not wanted, and there’s no development in these.

The secret to Auckland and Queenstown and these “a lot of people want to live there” areas is that we need to have apartments. We can’t have apartment blocks without people buying off the plans, and we can’t all sit around and wait and hope that somebody is going to come and do that. So we’ve got a situation now where we’ve got fewer apartments being built than we did last year and we’ve got fewer people having the opportunities that buying an apartment for their first home can give them than we did last year, and that is actually all down to a policy that said, “We don’t want these foreigners.”

Remember the “30 percent of houses being sold to foreigners” nonsense that we had? In fact, the answer that we gave last year, when this was raised, was 3 percent. Those were the statistics given to us by the ministries and the officials. Strangely enough, they’re exactly the same numbers being given this year by the officials. We’ve got people like the Hon David Parker clinging to the hope that 20 percent of houses—“houses”, he said—in Auckland’s CBD are being sold to foreigners, when he really meant mostly apartments, actually, and from one foreign person, often, to another foreign person—that this was occurring.

So we’ve got a policy that is built around, probably, the poll rating that Andrew Little got as leader when the Labour Party was 23 percent in the polls. It was actually a policy bred from desperation. What they could’ve been doing instead would’ve been helping the National Government, as we were then, to bring about some of the changes that we wanted to make around planning and urban development. Instead they would not support us on anything—would not support us on anything.

It’s a real joke to listen today to the Hon David Parker talk about that misnamed thing—what was it? CPTPPP? Something like that. That’s the Trans-Pacific Partnership agreement (TPPA) rebranded with “Comprehensive and Progressive”. For goodness’ sake! This was a man who was marching in the streets last year against the TPPA. He was a man who, along with the Hon Phil Twyford, was—yes, guess what?—marching in the streets, holding up a banner against it. Today, we’re being told, “Well, we have to do this now, because we’ve signed up to it and we all agree with it.” So that is the level of debate within the Labour Party that has brought them to this place. It’s not a strong position.

It’s worse than that. We’ve been told today by the Hon David Parker that no one accused him of being racist against Americans, or French, or anybody else. But, actually, no one went looking for French names, did they? No one went looking for American names—whatever that might mean. No one went looking for Lithuanian names. No one went looking for Polish names. No one went looking for Indian names. No one went looking for any of that, but they did go looking for Chinese names, and you’d have to wonder why. You’d have to wonder why. I don’t believe for a moment—the funny thing is, of course, the other exemption he wants is for Singaporeans. Well, there won’t be any Chinese-sounding names there, will there!

I have to say I just thought that was one of the biggest jokes of all—and why Singaporeans? Well, apparently it’s in some deal. We heard today, “Well, the thing is, you see, there was this free-trade agreement with China which allows Chinese to buy homes in New Zealand.” Well, who signed that? Which was the Government in charge? Oh, I know, it was a Labour - New Zealand First Government.

💬 Hon Members: Oh!

Oh, it was. It was. It was. Who negotiated it? A Labour - New Zealand First Government? Who was the Minister of Foreign Affairs at the time? Oh, no, no, no. The Rt Hon Winston Peters.

💬 Hon Members: Oh!

Oh, it was indeedy. Now, what does this tell us?

💬 Jamie Strange: Very good Minister. Excellent Minister.

Do we think for a moment that there is—what was that, Mr Strange?

💬 Jamie Strange: I say he’s a very good Minister, Winston Peters.

Sorry? I think he’s loving it. He’s loving it, because at least he’s not to fault. He wasn’t here—it wasn’t his fault. But where was the Hon David Parker in all this? Was he a trade Minister or something at the time, was he? Was he? Was he?

💬 Hon David Parker: I was in Cabinet.

No, no—he was in Canberra, he said.

💬 Hon David Parker: No, I was in Cabinet.

Oh, he was in what?

💬 Hon David Parker: I was in Cabinet. I take responsibility.

He was in Cabinet. He was responsible. Well, isn’t that lovely? He was in Cabinet.

So we’ve got a piece of legislation here which is—and I actually don’t particularly care about New Zealand First’s position on this, because we all know New Zealand First’s position. It’s the Labour Party’s one, and the Green Party’s position—

💬 Hon Amy Adams: Bereft.

Bereft of any principle. This is—if it’s the triumph that the Minister would like it to be—simply of pragmatism, policy, and politics over principle—it is a piece of legislation that is, in fact, the low-water mark for the Labour Party. They once were a major party. When they are part of a Government, they are the major part. They should not be. They should be, in fact, the same size as New Zealand First, because that is the level of thought that’s gone into this.

I’ll just take a brief call to correct the misunderstanding that the Hon Judith Collins showed in that contribution. In fact, the Labour-negotiated New Zealand – China free-trade agreement allows New Zealand to ban foreign buyers from China of New Zealand residential property and allows them to ban New Zealand buyers of homes in China, and they’ve done so.

The point I was making was a different one, which is that because of the clause that the National Party negotiated in what was then the Trans-Pacific Partnership (TPP) and what became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the prohibition on new investment classes to be screened, like residential land that is found in CPTPP—formerly TPP—flows through to China. Now, that might be too complex for the Hon Judith Collins, but she’s got it completely the wrong way round, despite having been in the Cabinet that theoretically was keeping an eye on the provisions of the CPTPP.

I’m very pleased. Actually, I was not prepared to make a speech. I came down all the way to support the Hon Nick Smith when he was giving a speech, because it appears the other side is still trying to deny this Chinese-sounding names fiasco. Over two years ago, I was in the House actually demanding Labour apologise for the Chinese-sounding names fiasco, and today we still have not heard that apology. Now, I feel this is hard to believe, because they are still trying to say that this is not discrimination. Well, it depends on us. It depends on the Chinese to feel or to say whether this is discriminatory or not. When that Chinese-sounding names fiasco happened, the Chinese community all over New Zealand felt that that was extremely discriminatory.

Now, we have had a Chinese community here since the 1860s. Now, we’ve been here for generations. Those people who have been here for generations still feel that this kind of approach—the Chinese-sounding names approach—really deeply hurt them. They believe they have been part of New Zealand society, but that this major party would adopt that kind of approach is hard to believe. That is why we demanded the Labour Party apologise for that particular approach, but today we can see they still do not really apologise. Of course, they no longer use these Chinese-sounding names—they understand that was wrong.

I want to emphasise that while Chinese people buy properties, at the same time they build properties. If we look at Auckland now, a large percentage—my colleague Andrew Bayly would be able to tell you the percentage. It’s about 30 percent, I was told. About 30 percent of the development market in Auckland is done by the Chinese community, so it’s very important for us to recognise that Chinese people in New Zealand also contribute to the development of this property market. So it is important for us to recognise in New Zealand that the Chinese community has been here for generations. At the same time, they are not only buying properties; they are also building properties. They are now a major force in contributing to the property market.

You know what? The KiwiBuild project under the current Government—Minister Twyford has been wooing the Chinese developers because, obviously, the Government needs the Chinese developers, the builders, and also the money to somehow sustain this KiwiBuild project. Now, if we are serious about this equal or fair approach, then you should recognise that the Chinese-sounding names fiasco is indeed not acceptable, not only because we have been here for generations but also because many people here—like me—have been here for decades. So if we go to an auction room and see a Chinese face, people say, “Oh, this is a foreigner.” It’s a kind of unfair treatment to all those who have been here for many, many years.

Another point I want to mention is that the Hon Minister Parker mentioned the Chinese Government banned foreign buyers. The fact is that in China, all land belongs to the Government. Even the Chinese themselves do not own the private land. So this is not discriminatory against foreigners. Even Chinese citizens can’t own the land; they can own the property. So this is the Chinese situation. People often say, “Oh, the Chinese Government bans foreign buyers.” This is not true. It is not true, actually. If you are working in China, you can buy properties. Like all Chinese, they can’t buy land because it’s all leased for 70 years or even longer. They can’t own the land. This is the Chinese situation; it’s unlike in New Zealand. You can’t privately own land.

So I would say that very often you give this kind of information, which seems to be true because it fits into your perception, and it might help you in trying to explain your policy here in New Zealand, but, actually, that is not the situation. So I would still demand the Labour Government—the Labour Party—apologise for its Chinese-sounding names fiasco.

Thank you, Madam Chair. I’m very pleased to take a call on Part 1 of the Overseas Investment Amendment Bill.

Probably, like many members of this House, I’m a great fan of the high comedy of Monty Python’s. One of my favourite films is Monty Python and the Holy Grail. It’s in that vein that I want to thank a previous speaker, the Hon Nick Smith, for his very worthy impression of the Black Knight. Members of the House might recall the Black Knight, who, as his arms and legs are being cut off, simply brushes it off. So as we know in this House, under the tenure of that Minister as Minister of Housing, New Zealand reached the highest level of homelessness in the OECD. What did the Black Knight say? “’Tis but a scratch.” We know that under his watch, we reached the lowest level of homeownership in New Zealand since the 1950s. What did he say? “It’s only a flesh wound.” We know that under his watch as Minister of Housing, the average price of a house for Kiwis in Auckland reached $1 million. The Black Knight—Nick Smith—says, “It’s all OK. Come back and have a fight about it.”

We remember that Minister saying in a piece in the New Zealand Herald that he was going to fix the crisis by finding Crown land to build houses on. We later found out that much of that Crown land was actually a cemetery. It was actually a cemetery. The ultimate Black Knight—the former Minister of housing, the Hon Dr Nick Smith—is fighting the battles of the past, pretending still, in 2018, that there is not a housing crisis to solve in this country.

That was followed on by a much, much better speech from the Hon Judith Collins. For most of her comments, she was still fighting the battles of the past and was not particularly focused on the bill, but it was noticeable the intense support she was getting from the benches behind her—support that’s been lacking when other front-benchers from the National Party have been speaking today, I might note.

This bill is an important bill. It is an important bill because decent, affordable housing is important to New Zealanders. That is what this bill is about. It is about the fundamental value that we have in this country—and, certainly, we have in this coalition Government—that every single person in our country should have the right to decent, safe, warm, affordable housing and that Kiwis who work hard, Kiwis who save a bit of money, Kiwis who have a dream to own their own home should be able to do so in 2018. Yet, as we know, that dream has been slipping away from so many people.

We know that that is a complex issue. It can only be dealt with—and I acknowledge the Hon Judith Collins for making this point—by increasing supply. Of course, that did not happen on the previous Government’s watch. We have a 40,000-home shortfall in Auckland City alone, so it is laughable to hear the claim that that Government adequately dealt with the supply problem.

But, as anyone who knows anything at all about economics knows, price is a function of both supply and demand, so it is very important in this respect, when we have a housing crisis, when we have homes approaching $1 million in many suburbs like my community—working-class Mount Roskill. Young kids in my community, whether they’re Kiwi Indians, Kiwi Chinese, Kiwi Filipinos, or Kiwi Pacific kids, are facing $1 million to buy a basic house in my community, in my constituency of Mt Roskill, and that locks them out. We believe, in this coalition Government, that that New Zealand housing market should be shaped by the ability of New Zealanders to buy their own homes, and should not have mountains of capital flowing into the country, artificially pumping up the price of those homes. It doesn’t matter where it comes from from around the globe. If you have an imbalance of demand with mountains of capital coming in, it is going to contribute to increased prices, particularly when supply is so tight.

If we go back to those figures, the figure across all of Auckland that we received earlier this year is that approximately 7 percent—on the narrowest-possible definition of home sales—goes to overseas buyers. That’s the narrowest-possible definition—it excludes purchases that may have come through a company, it excludes purchases that may have come through a trust, and it excludes purchases where there may have been a couple, perhaps, and there was a mixed visa - holder situation. But let’s say it’s only 7 percent. The point about markets is that when supply is constrained, if you have an additional marginal 7 percent coming in on top of that, it does have an impact on price. It’s not the only impact. It’s not the only thing we need to do to make housing more affordable—

💬 Andrew Bayly: Can you point me to the financial analysis of that?

—but it does make a difference. And I challenge Mr Bayly to address that point if he thinks I’m wrong on that. If he thinks I’m wrong on that, I challenge him to address that argument in his comments when he gets up and speaks.

I want to acknowledge the members of the Finance and Expenditure Committee who did work on this bill. It was a tricky bill and it was a complex bill, and there are real political differences that were involved, but, actually, the members of the committee across the Chamber—and can I acknowledge on the Opposition benches in the Chamber at the moment Andrew Bayly, the Rt Hon David Carter, and Lawrence Yule, who were part of the consideration of this bill at select committee, despite the differences. The Hon Amy Adams, I think, came in later on in the consideration of the bill. Those members were constructive and engaging in terms of the select committee in its consideration of the bill. I do believe that we came out of that select committee process with a better bill than when we went in.

So, just speaking specifically to Part 1, Part 1 is a relatively narrow part, but in Part 1 we actually deal with, I guess, the crux of the bill, which is bringing residential housing into the definition of sensitive land. One really important thing to remember in this debate is that, actually, we have an existing Overseas Investment Office process around sensitive land. Many of the rules and many of the definitions that have, in fact, already been brought up in debate are rules and definitions that are already in the principal Act. What we are simply doing in this bill is bringing residential property within the ambit.

There’s a very good reason for that, and this is a question and, I guess, a challenge for speakers who might follow on. If we consider farmland to be sensitive and if we consider important environmental areas to be sensitive, then why would we not consider the thing that is possibly the most precious and important thing for the health and well-being of many of our fellow New Zealanders—that is, decent housing—to also be a sensitive investment that we would screen in the same way that we screen those other sensitive categories of land? That is the fundamental contention of this bill—that that land is sensitive land. We should be careful about how we manage it, and it is entirely appropriate to make sure that it is managed and sold for the benefit of people who live in New Zealand.

There’s one very specific change that the select committee made to Part 1—and this is Part 1, clause 4(1), where, through the course of considerations, it was very, very important, in respect of the definition of land that is captured, that we were quite specific about that. We needed to be really tight about that; we didn’t want there to be too much contention about that when it came to the screening regime. So, through the select committee process, we have tightened that definition to be land that is defined as residential land or lifestyle land on the district valuation rolls. That’s a fairly objective categorisation of the land that will be captured under this bill, and I think that was quite an important little improvement that was made to the bill through the select committee process.

I want to finish my comments by just returning to the core purpose of this bill. The core purpose of this bill is to ensure that we have a New Zealand housing market that meets the needs of New Zealanders and that is largely shaped by the ability of New Zealanders to buy housing, not a New Zealand housing market that is shaped by mountains of offshore capital that pumps up prices beyond the ability of Kiwis, whatever their community, whatever their background, whatever their ethnicity—

💬 Hon Amy Adams: It’s simply not borne out by the data, and the member knows it.

—to achieve that Kiwi Dream of owning their own home. The member opposite, the member from Selwyn, says it’s not supported by the data—the data which that Government had to be brought dragging and screaming to actually produce, because for years and years, in amongst resisting any admission that there was a housing crisis, they refused to collect data. Their head was buried so far in the sand that they actually refused to collect the data until a couple of years ago, when the intense political pressure built up, and, as I outlined earlier on, we have the data this year, which shows that at the very narrowest-possible definition in Auckland City, which has suffered most intensely from the housing crisis, 7 percent of purchases—at the most narrow definition—come from offshore. That, at the marginal end, does have an impact on house prices. That will have an impact on prices in any kind of market, and I challenge any member opposite to explain to me how that would not possibly be the case.

This is a good bill. It is one piece of the jigsaw puzzle, in terms of resolving this housing crisis. We’re resolving this housing crisis on the supply side by stopping the sell-off of State homes, by investing in 100,000 affordable KiwiBuild starter homes over the next 10 years. We’re resolving the housing crisis by dealing with demand and supply, by making houses about homes and not about an investment vehicle for the wealthy to get even wealthier. This bill is a part of that, and I’m very proud of it.

Thank you, Madam Chair. Thank you indeed. I’d like to turn the debate to the profits à prendre. I’d have to say, during the Estimates debate, I actually asked Ministers, including the one in the chair, Eugenie Sage, about why profits à prendre didn’t include other industries—the carve-out for the forestry industry. I didn’t get a satisfactory answer. In fact, from the Minister of Agriculture, the answer was that “Well, we’d hope the wine industry got a greater return per hectare than forestry.” There is no basis on that, so I’ve got a series of questions I would like to ask the Minister.

What papers went to Cabinet including profits à prendre in the Overseas Investment Amendment Bill? I’d like the answer to that. I’d like to know those papers. What analysis was done of foreign investment in other industries such as viticulture that utilise profits à prendre? What analysis of foreign investment in forestry and other industries comparing to forestry about foreign investment was done to help make those decisions to have a carve-out of forestry and not other industries? I’d really appreciate that answer.

I’d like to inform the committee what the benefits of foreign investment by way of profits à prendre actually bring. The wine industry in 2000 had exports of $100 million. In June, exports from the wine industry cracked $1.7 billion. That increase in exports was totally driven by access to market, and that was much helped by foreign investment. So profits à prendre are able to be utilised by way of a foreign wine company getting access to New Zealand land and planting grapes on that and then being able to build their market. Why is that more important than just leaving it to the local market? Well, unless anyone’s got out there and worn a bit of shoe leather out on the streets—and I’m looking around the Chamber and I don’t think I’ve seen anyone else across the Chamber out on the streets in foreign countries trying to sell goods—you require access to market. It is hard work and it requires those routes to market. That is what foreign investment brings.

Those foreign companies often have links into distribution companies in other countries, which they may well own shares in, and those distribution companies, one thing they want is surety of supply. How do you get surety of supply? You control the value chain—that’s how you get it. Or you at least have a shareholding and a stake in every step through the value chain in order for you to guarantee supply to ensure that you’re at the head of the queue, so that that wine—in the case of wine—finds its way into the market at a good price and on time.

Now, I don’t see in the forestry example, an industry that’s already 72 percent foreign-owned—what is the special case about forestry? I’ve asked the Minister in the chair for some answers to questions which might help inform the committee about what that decision-making process was, but I fail to see how there is a special case there. It is a heavily foreign-owned industry as it is. They say they want more trees planted. Well, you know, that’s great. We do, but we want quality investments in there. We don’t need access to market in the same way through forestry. I agree we need heavy investment in forestry, but what’s different from that to other New Zealand industries?

💬 Horticulture: you could easily make the same case for apples and for the apple industry. You could make the same case for a number of industries. How do we reach further up the value chain? We do that by having investments through the value chain, and unless you get out there and walk around the markets and try and sell stuff around the world, then I would find it very difficult to explain it to members across the Chamber who haven’t had that experience to really understand how markets work in the international market place.

We have in the wine industry a fantastic example of an industry that takes a primary product—a grape. It processes it, adds value to it, puts it into a wine bottle, and actually achieves a higher market price in the world than other countries. If you take champagne out of the equation, it is the highest-selling industry in the world.

Thank you, Madam Chair. It’s a pleasure to take part in this debate as we discuss the Overseas Investment Amendment Bill, because I was one of those that sat on the Finance and Expenditure Committee throughout the hearings. The first point I’d make is I don’t think in my parliamentary career I’ve seen a more shambolic process for a piece of legislation, and if my parliamentary colleagues want proof of it, pick up the bill and have a look at how it’s had to be changed as it’s gone through the select committee process.

You heard the chair of the select committee, Michael Wood, arguing with some passion a minute ago that this is about fixing the housing crisis. The evidence that came before the select committee is that it’ll do exactly the opposite. Most of the big apartment blocks being built in Auckland currently are done with overseas investment. Mr Wood shakes his head. That’s how out of touch that member is with his own city. Even the Minister realised that he had made a mistake, because we’ve had to change it through the select committee process to allow foreign investments into apartments, because otherwise they weren’t going to succeed. We heard submissioners, promoters, and developers of apartments come before us and say, “The only way we get this up and running is to get some pre-sales. Many of those pre-sales are to overseas investors. Once we’ve got the pre-sales, we’re in a position to go to a bank and finance the whole project.”

Many of those overseas buyers don’t hold the apartment for long. It’s about increasing supply, and even the Government ultimately recognised that as it went through the select committee process. They’ve had to come up with some basis of amendment to allow this apartment development to continue with overseas investment, and now we’ve got the nonsense whereby the bigger apartment blocks can allow the investor to buy one apartment provided he or she doesn’t live in it.

I don’t think I’ve ever seen a more shambolic process in my time in Parliament, and what you’ve got to realise is what’s driving it. It’s a socialist point of view—

💬 Michael Wood: Well, that’s true.

—and Mr Wood accepts that—where “Property owners are deemed to be wealthy, and therefore we’ll do what we can”—this is the Labour Government’s attitude—“to hit them. Let’s hit the rich.” It’s a real envy piece of legislation, and it will do nothing—nothing at all to increase housing supply.

Then you look at the reports we’ve had from the officials, and I want to say I’ve never seen a bigger bevvy of officials either in the Chamber tonight for the committee stage or—if you want to go and have a look members, go and have a look—in the offices in the lobby. They’re full of officials. They’re here because they know they might be called on to fix shambolic amendments—the need to try to fix this legislation.

But the first point I want to make is in the report they gave to us, they said 28 submitters were generally in favour of the legislation. I think it’s higher than that. Nearly every submitter came to us and said, “We’re in favour of this legislation. We can understand what you’re trying to do, provided you exempt us.”—provided you exempt us. So we have the telcos: “Yeah, this is good legislation, but just make sure you carve out the telcos.” We had the retirement village sector saying, “We understand what you’re trying to do. You don’t like foreigners, so let’s stop them investing, but carve us out.” We had Progressive Enterprises, a supermarket chain, saying, “Carve us out.”

And then we had the doozy of them all: a particular iwi in Northland. It came along with a developer—Te Ārai developments limited—and suddenly there was a realisation that this was a Northland-based iwi that we were led to believe in the select committee was a large owner of land, and they would not be in a position to reap the benefits of a zoning change they’d got. They presented their case, and suddenly they became eligible for an exemption that was ruled on personally by Mr Michael Wood, the chair of the select committee. Thank God we’ve realised it’s a private benefit—probably not to the iwi, but to the developers backing the iwi—and it’s now been ruled out and cannot go any further.

Mr Parker took a contribution and talked about the necessity of bringing this legislation forward now that we’ve signed the Trans-Pacific Partnership (TPP)—now that we’ve agreed to go with the TPP. He talked about the semantics of adding two particular letters before “TPP”, so then we can proceed to pass this legislation. Mr Parker protested on the streets against the TPP whilst he was in Opposition. I do admire that he’s prepared to change his mind and recognise the value of TPP, and we’re now progressing with it, but that is no justification for presenting legislation that is as bad as this before the committee.

The ones I do feel sorry for are some of the people with relatively expensive lifestyle blocks who are going to find their values are substantially decreased—probably halved—by this legislation. There are people who have built around Queenstown on some of those lifestyle blocks quite—[Time expired]

Kia orana, Madam Chair, thank you. Just to respond to some of the comments that Mr Stuart Smith was making: why carve out forestry? Well, Mr Smith should be well aware that forestry is our third-largest export product earner, behind dairy and meat, and it contributed 3 percent of New Zealand’s GDP. Why carve out forestry? Because this Government, through the billion trees project, is serious about doing something about climate change.

The inaction by the past Government, its failure to really seriously engage with the issue, means that we need to catch up. If anyone’s been watching the international news, seeing the wildfires in California—we need to get serious. A billion trees sequestering that carbon is critical to meeting our Paris commitments. We need that additional investment from overseas companies in terms of expanding forestry in New Zealand. They will also, through their investments in land, be able to increase the amount of wood that’s processed domestically, creating more jobs. This Government has a plan for a sustainable, inclusive, and productive economy, and forestry is a key part of that.

There is already a screening regime for forestry, so what the Government did with the bill was listen to the concerns of industry, and—responding to the Rt Hon David Carter’s point—one would expect a bill to change in select committee, to be responsive to the concerns of submitters, because that is what the select committee process is all about. I commend the chair, Michael Wood, for the way in which he managed that process to ensure that the bill is the best it can be, responding to submitters.

Responding to the Rt Hon David Carter’s comments again, this bill was done quickly—as the Minister has made very clear—because of the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPPA). If the Government had not introduced the bill when it did, we would have lost the opportunity to actually ensure that we have a housing market in New Zealand that promotes affordability—that reduces the speculation by overseas buyers so that houses are more affordable for New Zealanders. The last Government failed to recognise that, and it was made clear in question time today that, finally, Mr English is recognising that the boom in immigration, the increased pressure that the overseas buyers were putting on housing, was contributing to the bubble.

This bill is about dealing with that. This bill is about ensuring that we meet the billion trees commitment, that we have a coherent, effective, and simple regime for screening overseas investment, that we build on the existing regime in the Overseas Investment Act for screening sensitive land, that it is coherent, and that we ensure that forestry can make that commitment to being part of our climate change commitments.

Why did we deal with profits à prendre, Mr Smith? We dealt with that because otherwise it was creating a significant loophole—the fact that these contractual agreements could, effectively, be the same, almost, as controlling and owning the land. So the simpler pathways have been developed in response to submissions. The bill builds on the existing regime in the Act. It’s been introduced at the time it was so that we are not prevented from controlling speculation in the housing market by overseas buyers as a result of the CPTPPA, because this Government cares about ensuring that housing is affordable.

Madam Chair, thank you very much. If what Minister Sage just said is true—if they were responding to submitters in the Finance and Expenditure Committee—why have I got over 20 submissions here from Queenstown, all opposing this horrible piece of legislation? They want an exemption for Queenstown, and we’ll go through them and figure out why that is.

This bill was rushed through with no thought given, and it has many negative unintended consequences. This is going to do far more harm to the region than good. This Government knows best, and prefers to tell people how to run their lives—a nanny State Government. Then they have ignored submitters from Queenstown, including Mayor Jim Boult, who wrote a very thorough submission. This will hurt the Queenstown economy, and let’s listen to a few of these.

The first one is from a Graeme Todd. He’s been a lawyer down there for four decades. He has “grave fears” that this bill will hurt New Zealand’s reputation “not only as a … place to reside (permanently or [temporarily]) but as a place to [emigrate] … and [to] our [reputation] as a leading world and open economy”, that nothing will be achieved through this bill, and that it at best could be called political posturing. In his 36 years “[I] have never”—never—“acted for an overseas purchaser [who seeks] to speculate in the New Zealand … property market.”

Let’s go to the next person: Jamie Kirk, who moved back to Queenstown 10 years ago with his partner. They had major concerns around housing affordability. “We both work [in] the construction industry and as a direct result of … legislation … have … had a number of overseas persons cancel projects” in Queenstown and around New Zealand. If this bill is passed, “it will have … huge impact on [our] local economy, which will … flow on … [to] the entire country …”. “Restricting all overseas ownership within [Queenstown Lakes District Council] will have catastrophic effects on … local economy”. Housing affordability differs greatly across New Zealand: “it is not a … one stop fix.” Luxury home buyers are not purchasing homes that would otherwise have been “for regular working families to purchase.”

He goes on to mention what will happen if this bill’s passed, including losing high-end, skilled construction staff, who will go offshore and ply their trades elsewhere. Often they bring decades of experience in sustainable and innovative building techniques, methods, and materials not commonly used in New Zealand.

They also talk about an American couple—Camp Glenorchy. They’ve spent over $40 million buying this piece of land, developing it—it’s one of the first carbon zero accommodation blocks in the country. And this “rich prick” American couple—

CHAIRPERSON (Poto Williams): Order! Order!

—are going to donate it all—[Interruption] You called them that—

CHAIRPERSON (Poto Williams): Order!

—but they are going to—

CHAIRPERSON (Poto Williams): Order! I shouldn’t have to shout to get the member to come to order. Now, I have taken offence at something that you’ve said. I’d like you to stand, withdraw, and apologise.

I stand, withdraw, and apologise.

CHAIRPERSON (Poto Williams): Before you get into your—

💬 Rt Hon David Carter: First said in this House by Michael Cullen.

CHAIRPERSON (Poto Williams): I’m actually still ruling. Before you resume your contribution, I was letting you run on. However, your contribution is probably more relevant to Part 2 than it is to Part 1, so I ask you to come back to Part 1.

Sorry, Madam Chair. I just want to talk about Queenstown Lakes District Council’s contribution. They have asked that this bill not proceed, as it will not improve housing affordability but make it worse, and it will be at the expense of significant economic and social value provided by overseas buyers. A delay in proceedings is needed to enable research and assessment of consequences, because quite clearly they haven’t been considered—the negative consequences that will follow this bill.

Sir Eion Edgar—he actually came and presented to the Finance and Expenditure Committee—said this bill “will be detrimental to NZ’s international reputation and greatly restrict overseas parties” huge benefit to New Zealand. He talked about one buyer who bought five stations between Queenstown and Wānaka for around $60 million and then spent another $50 million restoring these properties to their original state, and then they gifted 90 percent of the land to the Queen Elizabeth the Second National Trust for the benefit of and for use by all New Zealanders. They also maintained these estates at a cost of $3 million to $5 million a year—that’s a total gift of over $100 million. He also goes on to say that when he asks for money for events like the Queenstown Winter Games and the Queenstown Trails Trust, these are the first people to put their hands in their pockets and donate.

David Cole, chair of the housing trust in Queenstown for nine years—he was a board member of the national community housing organisation; very familiar with affordable housing issues in New Zealand—believes the current bill is nothing more than an empty gesture that in its present form will do more harm than good. I asked the Minister to please consider a carve-out for Queenstown. We really need these people, and they have proved over the years they’re making a huge contribution to New Zealand.

It’s an absolute pleasure to stand on behalf of New Zealand First to talk to Part 1 of this Overseas Investment Amendment Bill. What I’ve heard from over the other side of the Chamber is an absolute exercise in denial. It’s the old dead cat strategy, I think it was—wasn’t that the Crosby/Textor dead cat? We’ve heard all sorts of stuff about the wine industry and whatever. This is about affordability of housing for New Zealanders.

This Government is absolutely united with our confidence and supply partners, the Greens, on this issue of foreign ownership. We have seen the outcome of what the policies of the previous Government have been, and they have been a market failure. As Mr Wood pointed out, we have million-dollar houses in Auckland. It’s interesting to hear Mr Walker get up and talk about Queenstown, where there are also million-dollar houses. The only people that he could quote were people like Graeme Todd and Sir Eion Edgar, at the top end of town—the big end of town. There was the Rt Hon David Carter talking about the poor lifestyle block holders on the outskirts of Queenstown. We’re here to talk about the policemen, the nurses, the schoolteachers, the meatworkers—the everyday people.

Let’s talk about Queenstown, because it just so happens that the Minister of Housing and Urban Development, Mr Twyford, has made a recent announcement with the Queenstown Lakes District Council—$52 million—and that is going to build 1,850 houses on Quail Rise in Frankton Flats. That’s what this Government—this egalitarian Government—is doing. We’re not looking after the big end of town; we’re looking after the workers and the good, ordinary Kiwis.

Of course, the National Party have got previous on this. Farmland: 465,000 hectares of farmland transferred into foreign ownership in 2016—an absolute shame, selling out the young New Zealand farmers trying to get through and get their foot on the property ladder. We’ve seen the outcome, now we’re scrambling as a Government to try to get access through Hunter Valley Station. Again, the aforementioned Mr Todd, who brokered that deal for Matt Lauer—we’re having to deal with him now, and potentially having to get access to our conservation estate that we’ve sold off the access to.

This is a ticking time bomb. What happened to the National Party of Sir Keith Holyoake and his famous property-owning democracy? We now have property ownership in that important 45- to 55-year-old bracket at 59 percent and falling. This is an absolute ticking time bomb. Those people, who we would ordinarily expect that by the time they reach pension age, they would have freeholded their own house—they don’t even own a house, and time’s running out. That’s why we’ve got to spend $2 billion a year on accommodation supplements.

The whole thing is unravelling. It is market failure, and we’re addressing that. There are ways to do this. This is not the only answer, but demand is a part of the answer.

We’re also dealing, of course, with supply. Again, Minister Twyford: 100,000 houses over 10 years. Of course we are dealing with immigration, Dr Smith, and we can see that trending steadily downwards. Just to the Supplementary Order Paper and, of course, the forestry carve-out, Mr Stuart Smith went on, “Why haven’t we got the wine industry in there? Why haven’t we got”—well, I can tell you why that is. You ask Paula Bennett, when she was swanning over to Paris to swan on the international stage and sign that Paris Agreement, what were they going to do? They didn’t have a plan at all. This Government has a plan—a billion-tree plan; a nation-building strategy. That is what we’re doing. We’re taking responsibility.

Yes, this is a desperate time; we need to take a desperate measure. This is what we’ve had to do. We’ve had to get a carve-out as we seek to address this incredibly important issue of our time, as Minister Sage has alluded to. So I’m proud that we’re standing up for ordinary New Zealanders. I’m proud we’re standing up for our international commitments. I really commend this amendment to the committee.

Thank you, Madam Chair. I do want to take another call on this Part 1 of the Overseas Investment Amendment Bill to respond to some of the nonsense we’ve heard from across the aisle about the creation of this issue of the lack of housing supply. If you listen to the other side, they would have you believe—not you, Madam Chair, of course; they would have this House believe—that the whole issue magically started in the last nine years. Well, I want to inject a little bit of fact into this debate.

If anybody wants to dispute this, have a look at the Statistics New Zealand website. The Statistics New Zealand website is a bit inconvenient for the Government—they don’t want to hear it—but let’s look at the reality here. Housebuilding started to plummet in New Zealand in 2003, and fell to the lowest levels for many, many decades in 2008, when we took office. In 2003, housebuilding plummeted—it’s like a straight-line decline—down to the very lows of when we took office. If you look at that Statistics New Zealand graph—and the Government won’t, because actual information gets in the way of their ideology—it collapsed under the last Labour Government. It completely collapsed.

Under the National Government, that rate of housebuilding picked up from the cellar and went right back up strongly. It was the National Government that recovered housebuilding in this country, and if it hadn’t been for those lost years under Labour, when they were asleep at the helm, as they are now with the economy—they did nothing to address the complete collapse in housebuilding—we wouldn’t have a shortage of housing now. National recovered the sector, and, frankly, it is the work already of this Government to destroy the funding for house construction in this country that is, once again, creating a problem of insufficient houses being built. So look at the numbers. That’s all I would say to this committee or anyone listening to the debate: look at the numbers from Statistics New Zealand.

The collapse in housebuilding started under the last Labour Government. It was recovered strongly under the National Government, and already we’re seeing and hearing from developers that it is because of the changes in this bill that they now can’t get financing for their developments. I was talking to developers just last week, actually, who said to me that they have been building hundreds of affordable properties in Auckland—New Zealand developers, not some nasty foreigners. New Zealand developers, but, yes, their financing comes from offshore. Because of this bill, they have now lost funding for a number of developments they had planned. Now, some of those developments are going to be rebadged as KiwiBuild, and Phil Twyford will pretend that somehow he’s adding to the pipeline—he is not. It is picking up a few of the lost developments because of this legislation. So not only did Labour break the housing market last time they were in Government, not only have they completely failed to recognise how hard it has been to get that sector going again; they’re straight in and doing it again.

We’ve just heard from the last speaker that, actually, this is causing the pressures on the accommodation supplement. Well, I’ll tell you what doesn’t help the pressures on the accommodation supplement: driving landlords out of the market head over tail. Landlords are saying, “Under this lot, there is no reason we would own a property.” Costs are going up, rents are going up—that is all on New Zealanders, and it’s on the poorest New Zealanders. So it’s not about looking after the top end of town. You make houses more expensive, you make rents more expensive, you stop the funding of developments, and it is people on the lowest wages who miss out.

So I couldn’t sit here and listen to people in this debate saying that the need for this bill was because of the last nine years. There is no need for this bill, first of all. There is no need for it. But let’s be really clear: if there is a shortage of houses in Auckland at the moment—and there is, and I acknowledge that—that is because they were absolutely derelict in their duty the last time they were in Government, and they’re showing already the same signs of a rampant and total disregard for any sort of economic analysis, any understanding, and any willingness to listen to advice, to listen to the people who came to the Finance and Expenditure Committee. Whether it’s in housing, whether it’s in viticulture, or whether it’s in the profit à prendre space, not once did they front up with any evidence that this will address the problem they’re talking about.

Everybody who came to the select committee, as my colleagues have said, made it clear they didn’t want any part of it. They could sort of say to the Government, “Oh, well, good on you—nice that you’re trying, but please carve us out, because this will destroy us.” Well, this is exactly the sort of economic vandalism we are seeing from this Government: have a good bumper sticker, virtue-signal something that sounds good in the polls, and have total disregard for whether it works.

I call the Hon Gerry Brownlee.

💬 Hon Gerry Brownlee: Sorry?

CHAIRPERSON (Poto Williams): I call you.

Oh, it’s me. Thank you very much, Madam Chair. Well, of course, following on from the Hon Amy Adams’ very, very excellent history of why we are in this situation, it’s interesting to note that, while you can have New Zealand First members, Labour Party members, and Green Party members standing up today saying this is the great saviour for New Zealand ownership of land, it fails to recognise that it allows foreign capital to come in, foreign investors to come in—we might use the word “speculators”, but they can’t bring themselves to do it—allows those people to come in, build all sorts of housing projects with no problem whatsoever. It’s right there in the bill—that’s allowed. They just can’t own them. Or, worse than that—my apologies; I’m wrong—they can own them, but they can’t live in them. They can own them, but they can’t live in them. So what we’ve got here is a bill that is just a complete charade when it comes to actually doing something that it is claiming to do.

The worst thing is it denies the history of this country. Going back as far as we like in European settlement, there has been huge foreign investment in this country. What happened in that pre-1840 period? Trading was carried out and it was foreign capital that allowed trading interests then to establish in New Zealand, including Māori. Post-1840, the establishment of a European-style Government here—massive amounts of British capital and other Commonwealth capital coming into this country to build the main streets of New Zealand. It’s only into the 1970s that you start to see some of that ownership transferring in a greater bulk back to New Zealanders, but those New Zealanders were often financing those purchases with foreign capital.

One of the things that this bill tries to deny is that New Zealand is a country that has to trade in an international environment. We enjoy a lifestyle in this country far in excess of what a domestic economy here might be able to provide for us, and we enjoy that because we are free to engage in trading activities with other countries. Some of that requires that there will be some foreign investment in New Zealand property. Now, it’s OK for the Government, apparently, to carve out some of their friends when it comes to a big property investment. It’s OK for the Government to say, “Well, if it’s forestry, that’s OK because that suits our billion-tree pipe dream, and it’s OK for us to invite foreigners to come in here, build houses, but never own them.” And they’ll come in their droves, apparently. Well, no one goes to a place they’re not welcome. The problem will be that we are going to see an even further tightening of available capital for the sort of work that’s required to not only keep our economy going but also deal with some of the housing needs that this country currently has.

I’m fascinated by my friend over there, Mark Patterson, from down south—I’m told he’s a very competent farmer, very capable farmer—getting concerned that it was only the top end of town, apparently, that we were talking about over here. Well, let’s ask ourselves a question here: if people have come into this country and they’ve spent an enormous amount of money in this country building these flash homes, and they have the $7 million to $15 million value or even more on them, how many buyers are there going to be for those properties? What we’re really seeing here is some sort of early 1900s breakup of estates carried out by Governments. I just think it actually sends a very poor signal to New Zealanders who want to invest in property—a very poor signal. There are not thousands of these properties. There are not even, possibly, hundreds in that category. They’re few and they’re far between. Stopping them being sold to other foreigners and more capital coming into New Zealand for more expenditure in the New Zealand economy makes absolutely no sense whatsoever, and pandering to the prejudice that some people have against foreigners coming to this country is utterly ridiculous.

Let’s make it very clear: foreign capital has done a huge amount to expand the conservation estate in this country and to start protecting New Zealand’s conservation values. To close all that off and say, “No, we’re not going to have it.” with this rubbish bill is a tragedy.

Madam Chair, thank you. I thought I would start by talking about some of the rebuttal I’ve heard tonight, before I want to actually deal with some of the issues of what’s actually in this bill. The first thing I want to just refer to is that speech by Mr Mark Patterson, who implied that National is not worried about these things, hasn’t done anything about—

💬 Hon Member: That’s right.

That is not right.

💬 Mark Patterson: Yes, it is.

That is not right, Mr Patterson, and I’d like to draw your attention to things that we actually did when we were in power, which is that we implemented a thing to stop foreign buyers coming into the country and just wholesale buying up property by making sure that they were required to get an IRD number. We also introduced the two-year brightline test. We also introduced withholding tax on foreigners, and we beefed up IRD to chase property people to make sure they’re paying their taxes. So this assertion that we’re not concerned about this issue is wrong.

But the thing that we did which is different from this bill tonight is that we were measured, calculated, in the response that we wanted to do. I just found the response from the Minister in the chair talking about the ability for foreigners to come into this country and buy great swathes of forestry land because we need their investment to continue to promote forestry and also meet our billion-trees target—which I just find perverse, because, to me, that strikes at the absolute contradiction of this bill. On one side, we’ve got a Minister saying, “Let’s allow an industry 72 percent owned by foreigners to buy more—to buy up to 100 percent.” It allows them to come and buy a thousand hectares every year without any need to go and get approval, and yet on the other side we’re saying, “We can’t allow you guys to buy houses.”, even though we know only 3 percent a year are sold to foreigners. I can’t understand that logic, and that is the thing about this bill. I’ve got to say, I’ve heard all the submissions—213—

CHAIRPERSON (Poto Williams): I apologise to the member; the time has come for me to leave the Chair for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

Thank you, Mr Assistant Chair. I was cut off in my prime, I thought, just before the dinner break. I had been talking about the illogicality of this bill, about the issue of why we want to promote more foreign ownership in the forestry industry, which is already 72 percent owned by foreigners, and we think we should allow 100 percent. Yet, on the other side, in the housing sector, we’ve only got three percent of houses being sold to foreigners, but that is the issue. I can’t understand that.

But where I was just moving on to was we heard 213 submissions in the Finance and Expenditure Committee. I’ve got to say as a member of that committee I actually felt quite embarrassed. I did. I felt quite embarrassed because there was just this avalanche of submitters who came in and just hammered our committee. A lot of the members held their heads in shame. So what they did, what happened—

💬 Rt Hon David Carter: So did the staff. So did the officials.

That’s right. Unfortunately, they had to, Mr Carter. What happened was that we then saw a proliferation of minor changes as each of these submitters came in and worked the issue through and showed how illogical, how wrong, this piece of legislation was.

So just to deal with a bit of fact, the definition of an overseas person in the Act is defined as someone who’s been living in New Zealand for 12 months, or a person present for at least the last 183 days, or a New Zealand tax resident, and that all sounds very good. So if you’re not one of those people and you’re a foreigner, in effect, you need to apply for a consent to be involved in buying a house. You may avoid what’s called the counterfactual process or test. A counterfactual is normally an Overseas Investment Office (OIO) requirement that, if you are a foreigner and you’re buying a piece of land or a business, what you do must be more than the best New Zealander would do with that same asset. So, to avoid that test, which is actually quite a strong test, you have to demonstrate that you’ve got a commitment to live in New Zealand, that you’re developing the land to create “increased housing”—is the term—provided you sell that development once you get to a completion, or you use the land for non-residential purposes, which may, of course, have a component where it has a house on it.

So that’s all very well but my first two observations around that carve-out are that the Government is happy for a foreigner to land bank for future houses in New Zealand. That’s what this legislation means. It means they are prepared to allow foreigners to come in here and land bank good New Zealand land for the purpose of eventually building houses on it. Of course, most people who are involved in the building industry know that’s where you make your money, and buying that land before it’s rezoned and taking it through to a process where you can sell those sections.

The second observation I’d make is that if you’re a foreigner—

💬 Mark Patterson: Selling off those Pukekohe soils.

We’ve got huge problems in Pukekohe. If you’re a foreigner and you buy an existing business, the way to get around this is to make sure it’s got a house on it. If you’ve got a house on it, you will get approval, and then you can then spend your $20 million doing the house up. That’s the only way to get around this bill.

But there are ways of getting around it. So if we were really trying to stop this—and these are wealthy people; these are the people that Mr Mark Patterson was slating off before, earlier in the speech, saying how we shouldn’t have these wealthy people coming into New Zealand, which I just find absurd—this is the way that they will get around it. So I’m not sure this carve-out actually works.

So what did we do? What were the damage limitation rules that were introduced into the bill? Well, the first change is that, in order to promote foreigners building new properties or houses, there’s a dispensation for those who build 20 or more houses, and you’d be able to get a consent to sell 60 percent of those houses to foreigners. Of course, that was in recognition of the blindingly obvious: that, in many cases, New Zealanders need to be able to sell houses to a range of investors to be able to get the project off the line, and that banks require presales. Of course, suddenly there’s a recognition by the Government that we should make a dispensation. But, of course, it means that you can sell 60 percent to overseas investors and these buyers will not be required to on sell but they will not be able to live in them and, therefore, be able to rent them. I’ll come back to this. That’s a buyer category.

In terms of the developer itself, who may be doing the apartment build or terrace house development, there would be no requirement for them; so they could come in, buy the land, sit on it for five years, build the terraced home or the apartments, and then not sell provided there’s a shared-equity basis or rent-to-buy or rental. See, it all sounds very good. But this is the rub—this is the rub. If you’re going to get around that rule, what you will do is you will be that foreigner who comes in and land banks, builds the houses, and then you will rent it out. You will rent it out to your daughter or son or son-in-law on a term not less than five years but just under five years, and you will be able to use that property. So actually the rules don’t work. That’s the issue I have with the rules. If you’re going to try and carve something out, make the rules work. These rules do not apply and will not apply. I think people’ll find a hole in them, unfortunately.

Then, of course, there’s the issue around hotels. There’s a similar arrangement where you can take part of a hotel but, of course, you can retain that as long as you don’t use it more than 30 days a year. But, of course, all this raises the issue around the OIO compliance. We heard from the committee officials that at the moment, I think, the OIO processes about 150 applications a year and under this arrangement they believe they will need to process about 4,000—4,000 of these. How are they going to ensure that the person who built the apartments, who rented it to their daughter, how will they go back in five years’ time and check it, or in seven years’ time—and work its way through? So I think that’s a really significant issue, and I don’t think that practicality of this whole thing—again, it makes the Act unworkable. I think that’s a crucial deficiency in this Act.

I think the other thing was around the issue of residential housing providers. I want to return to this—hopefully, I’ll get another call at some point—because that is also part of a way of creating new housing stock in New Zealand. Residential housing providers like Ryman Healthcare, Metlifecare—under the rules, they are precluded because they’ve got more than 25 percent foreign ownership. I think those are issues, again, if you’re trying to promote housing in New Zealand. We’ve actually carved them out of this arrangement. I can’t understand how this bill works and what the intent of it is.

I want to talk to a number of amendments that have been tabled by National Party members, which are all identical except as to the district and amount that they apply to. The National Party members are bringing forward amendments to clause 4(1), which adds a new paragraph (c) to that clause of the bill, which reads “excludes land from the definition of”—

💬 Hon Amy Adams: It’s all Part 2.

No, this is section 4, Part 1.

💬 Hon Amy Adams: Of schedule 3?

No, it’s not. It’s clause 4 of the bill. These various amendments exclude land with a quotable value above various amounts within various district boundaries. They’re all identical except that they have a different council and a different amount.

I want to talk about the Queenstown one, because, I’ve got to say, there is nothing more illustrative of the bankrupt values held by the National Party than what they’re doing in respect of Queenstown. Queenstown has the least affordable housing in New Zealand—in New Zealand. People who work in Queenstown can’t afford to live there. They commute from Cromwell. They commute from Kingston. As a consequence of the inability to employ New Zealand staff, more than any other part of New Zealand, it is reliant on an immigrant workforce. They’re willing to put up with 12 to a house, 20 to a house, to live for a couple of months in Queenstown as party town. They’re willing to put up with that. Of course, New Zealanders aren’t willing to do that. So what’s the problem there?

Housing is so expensive; so what’s the answer from the National Party? They say that we should give an exemption not just for wealthy people but for the wealthiest of the wealthy—the people who can afford to buy a house worth more than $2.5 million. That’s what Hamish Walker’s proposed amendment does. It shows his true colours: not here for New Zealanders; not here for the people who work here, who pay tax in New Zealand, who lend their shoulder to the wheel of the New Zealand economy, who raise families here, who volunteer at the fire brigade, who belong to the sports club, and who do the volunteer work through the Lions club—no. Those people can be written off by Hamish Walker. Hamish Walker, I think you should take a look at yourself. The people in Queenstown—

💬 Hamish Walker: Well, why did they all submit against it?

Yeah, I know some of your friends, they say, “Oh well, this is terrible. What will happen to the construction industry?” Well, what will happen to the construction industry is that instead of building houses that are worth more than $2.5 million, they’ll build affordable houses, and they’ll make money building affordable houses. Is that such a bad thing for Queenstown? It would be a great thing for Queenstown—really, you know.

So who is the National Party proposing to exempt? People who don’t have work here, people who don’t pay tax here, and people who don’t visit here very often. They’ll build a $2.5 million house, it’ll be occupied for a few weeks a year, and that effort could have been put into building affordable homes that New Zealanders could live in.

Now, not only does that offend me; the other side of the transaction offends me, too. In respect of those prime sites in Queenstown or the Bay of Islands, I want the most successful New Zealanders to build them and to live in them and to own them. I don’t want them to be outbid by someone who avoids tax overseas. We’ve got this concentration of wealth happening around the world. Piketty proved it. We all know it. The Panama Papers proved it. Some of these people don’t pay tax anywhere. They’re the owners of the multinationals who don’t pay tax in New Zealand or anywhere else, and what does the National Party want to do? They’re the people they want to govern for. They don’t want to govern for ordinary New Zealanders who work, who pay tax, and who raise their families. They are there for the foreign buyers who don’t pay tax in New Zealand.

If they want to come here and live here permanently and pay tax here, they can buy here. Those people would normally be able to get a visa to come and live in New Zealand, and if they do that, from the day they arrive, they can buy a house. Indeed, they could actually get approval on the basis that they’re coming to live here permanently. But no, the National Party wants to give a special exemption for the wealthiest people in the world—who don’t pay tax anywhere, often—to come and outbid New Zealanders for what is ours.

It is the birthright of New Zealanders to live in a home that they own and to buy our property. It’s not the birthright of a foreigner.

Thank you, Mr Chair. I’m quite surprised to get a call—

💬 Rt Hon David Carter: Wind him up, Ian.

Well, no. I’m not going to do that at all. I think, from the last speech we just heard, if you inverted that and directly attributed it to the forestry industry, that is exactly what this bill is doing: it’s allowing the richest people in the world to come into New Zealand, rape and plunder our land, and take the profits home without paying tax, which is exactly what Minister David Parker was talking about a minute ago.

But I want to talk about a couple of other things with respect to the forestry industry and the clauses in this bill that I think are particularly concerning to New Zealand, and that is that there is this great potential for this to lead to land aggregation. There’s also great potential for this to preclude the use of classes 2, 3, and 4 land, which is way beyond the requirements of forestry, from being used for other things. I think that is a tragedy for New Zealand’s future. It also leads to depopulation, and if we run the risk of aggregating land and planting trees all over it, it will lead to depopulation of provincial New Zealand, which is also not altogether in our favour, and I’ll explain that again in a minute.

It is quite possible to manage the tree-planting and achieve the target of the “Minister of Millions” in a much better manner than this bill proposes. I think, if we looked at this and took some time over it—I don’t have an issue with people buying land and planting trees; I think it’s very useful. The issue I’ve got is that this bill enables them to buy land carte blanche, in effect. They could even buy grape land, for that matter, and plant it in trees, if you think about it in the extreme, and there’s nothing to stop that from happening in this bill. So I think that putting these clauses into the bill around forestry land is extremely dangerous for the future of New Zealand.

We’ve seen, throughout our history, land use change frequently, actually—sometimes for the better, sometimes for the worse. If we plant trees on this land, other than if you looked at some of the land after Cyclone Bola in the Gisborne area, which was de-treed after being subsidised into trees—and it’s quite possible that that will happen again in this case, because that’s the way, I guess, land use happens. So I think there’s some risk with the land aggregation and the way that this land could then be used for trees and no longer be of any use for anything else. It will threaten our rural populations, it will threaten the very best of our land, and I don’t think that’s in New Zealand’s long-term future. So that’s the first issue I wanted to touch on. It concerns me greatly, and I think there are already models in New Zealand where the type of land use can be influenced by the way it’s able to be planted and whatever. This bill doesn’t allow for that, because, effectively, it enables those purchasers to buy land en masse.

I want to talk about another issue which is a little bit the same. Michael Wood, in his contribution earlier on, talked about there being a shortfall of 40,000 houses in Auckland. Well, I’ll lay odds that, in 10 years’ time, there will still be a shortfall of 40,000 houses in Auckland, and there are two reasons for that. One is that the issue isn’t, in my view, foreign buyers. The issue is the settings that the Resource Management Act and the Auckland Plan have put on the use of land and the way we need to build houses in that area. When you think about the Pukekohe potato land, effectively, they’re replanting it in houses, and I suppose that, if you took that to the extreme, you could liken it very much to the potato famine in Ireland. Some of you will be old enough to remember that—I am—and I mean that’s the sort of thing that this kind of thing creates.

The reason I am raising these issues is because, I think, throughout our history and throughout all the history of democracy in the world, we’ve seen Governments with intention put legislation in place which has come up with perverse results. I think there’s a very good chance that this legislation is going to lead to perverse results, both, as I mentioned earlier, in the use of land for trees and where we get to with that, and certainly, I think, given that the settings aren’t right around building houses, we’re encouraging people to build out and not up, effectively. Whether we like it or not, wherever we live, we just cannot keep on building out in the world, because there will not be enough sustainable and decent land or good class of land left to provide the food that we require. I think that if you look at the Pukekohe area—and I don’t want to pinch my friend Andrew Bayly’s electorate and use it as a shocking example—that’s very challenging for New Zealand, and it could happen throughout New Zealand.

So I guess my concerns about this bill relate primarily to land use and where it gets to in the future as a result of the legislation that we pass in this time. So that’s my contribution to the debate.

Could I take the opportunity to respond to those comments by Mr McKelvie, which I thank him for. I agree that future Governments need the power to control excessive levels of overseas investment in forestry, and that’s what this bill does. Indeed, if this bill is not passed, because any forest and any land to be used for forest can be acquired as a forest registration right, it can be vacant land sold as a forest registration right—

💬 Hon Amy Adams: So they’d have exempted it all out. You’ve made it unworkable.

No. Amy Adams, you’re absolutely—

💬 Hon Amy Adams: 1,000 hectares—is it not 1,000 hectares?

No, you’re absolutely wrong. I’m surprised that after having sat through at least half of the select—

💬 Hon Amy Adams: Well, which part’s wrong? Is it not 1,000 hectares?

If the member had sat through and listened to her select committee and read her papers properly, she would understand that if this bill is not passed—

💬 Hon Amy Adams: Is it not 1,000 hectares? Are you saying I’m wrong?

If this bill is not passed—listen, please—then New Zealand loses for ever the right to control overseas purchases of forest land purchased as forest registration rights. Every freehold forest, every leasehold forest, every piece of land to be planted as a forest can alternatively be sold as a forest registration right for multiple rotations for 90-plus years, and at the moment, that is not within the screening regime.

So I accept Mr McKelvie’s concerns. I accept that it is possible that foreign direct investment in forestry can go so far, but the logical mistake that has been made by the National Party is that, unless this bill is passed, that is the status quo under the existing law, and New Zealand loses for ever. If we don’t fix this before the Comprehensive and Progressive Agreement for Trans-Pacific Partnership comes into effect, New Zealand loses for ever the right to control foreign ownership of forests, because every forest in New Zealand—every one of them—can be transacted as a forest registration right, and they are not currently covered by the screening regime.

In respect of the points that Mr McKelvie makes in respect of urban land markets, we agree: this is not the be all and end all of curing the housing crisis. We agree there are land supply issues in Auckland. The answer to that does not lie in this legislation; it lies in other legislation and policy measures that the Government are proceeding with.

Thank you very much, Mr Chairman. The first point I want to make is in relation to the comment earlier by the Minister the Hon David Parker and asks him why he dismisses the Queenstown example advanced by Hamish Walker when 25 submitters came from the Queenstown area to present to the Finance and Expenditure Committee and, in common, they all said, “There is a housing affordability issue in Queenstown, and this measure being advanced in this bill will only make it worse.” We heard that from owners of land, we heard that from developers, we heard that from carpenters—we all agree that Queenstown has got an affordability issue. Do something that’s positive about it, Minister. Don’t advance legislation that’s going to make the problem worse, and don’t ignore 25 submitters. Now, I know the Minister has a history. He actually came into this Parliament as the member for Otago. I think it was 2002 to 2005, from memory. He knows the very people who made these submissions, and tonight he just rejects them with an arrogance that doesn’t normally come to Ministers in only nine months of Government.

The reason I wanted to take another call is that I was outraged to hear Mark Patterson’s contribution earlier. And I am looking forward to when that Hansard is published, and I’m going to make sure Hamish Walker and Jacqui Dean send it as wide as they can around Clutha-Southland and the South Otago area, because that member will never come back into Parliament with that speech. What a socialist position from a person who claims he represents the New Zealand primary sector. Throughout his speech, he decried people who make money, he decried people who make a profit, and he said we should all be equal in this world. It was almost communist in its delivery. I thought it was a frightful, frightful contribution, completely anti - foreign investment. How does that member think our primary industry was ever established in this country? How does he think the processes came and arrived from England if it wasn’t for foreign investment? I thought that member had some possibility, but I think he’s now got 2½ or two years left in this place before his constituents down in that part of the world realise that he’s not for farmers at all; he’s completely a socialist.

The other thing I wanted to talk about was the issue about the sudden change of attack and the introduction of a Supplementary Order Paper (SOP) around forestry. And I can just imagine what happened in Cabinet as the forest report slipped from the select committee back to the Cabinet members and they realised what a mess they’d made with the first piece of legislation put into this House. You have the Hon Shane Jones, who claims he’s the champion of the provinces, advancing a scheme to plant a billion trees a year, and as this was put into Parliament, as it was introduced by the Hon David Parker, it would have stopped foreign investment in that industry completely. And it’s already 74 percent foreign-owned. So they had to scrape together a saviour SOP, which has now made an exemption for forestry of up to 1,000 hectares. And I say to Mr Parker: if you’re doing it for forestry, why is that the only industry that’s important? What about horticulture? It earns more money than forestry, and they’re under the regime now of not greater than 5 hectares.

You can just imagine the argument between Shane Jones, Winston Peters, and David Parker around the Cabinet table when they realised what a disaster this original legislation was. And we see that right through the whole submission process, when every submitter almost to a tee came before the select committee and said, “We understand what the Government’s trying to do, but the effect of this legislation is so bad it will do exactly the opposite.” And I just cannot believe the arrogance of particularly the Minister in the Chair—well, I suppose, having known him for as long as I have, I can—but I would have thought some of the other Ministers would realise the effect of this legislation. Mr Parker’s opposed foreign investment, not only in land ownership in this country; he’s opposed foreign investment, he’s opposed anybody who claims to make a credible life for themselves and becomes wealthy, and he’s opposed that throughout his parliamentary career.

Kia orana, Mr Chair. Thank you. The Rt Hon David Carter is better than that, and I am really surprised to hear the tenor of that speech. The fact, Mr Carter, is that this Government has a fundamentally different approach to overseas ownership of land and housing in New Zealand, because it is a privilege, if you’re an overseas person, to own land here. That is why one of the first things this Government did was to change the ministerial directive so that it did apply to all land over 5 hectares, not just to very large farms.

In terms of the Queenstown issue, I’ve been really surprised by the National members, particularly Mr Walker, and their putting up the arguments of those who have access to a lot of income and wealth that Queenstown should somehow be in a different position from everywhere else. This Government wants the legislation to apply consistently across New Zealand, because if you had an exemption for Queenstown, that would drive overseas speculation there, and if anyone’s been to Queenstown lately, they would realise that the pressures on housing there are significant. It is very difficult for average households to afford housing there. You won’t make it worse by putting in this law. What this bill does is ensure that we don’t have the luxury housing market, which you’ve got around Queenstown, contributing to driving up prices further, contributing to soaking up demand for builders, for residential construction materials, as it would if you made an exemption, as Mr Walker is suggesting.

We recognise that land price pressures are one of the major drivers of housing price increase, but if you’re going to allow land in the Queenstown area to be used for the development of luxury housing, to be owned by overseas interests, that’s going to contribute to driving up price increases in housing. If you exempt the luxury homes around Queenstown, that will also drive up prices, and it will increase the demand in that luxury market. So it doesn’t make sense for Mr Walker to be arguing that Queenstown should be exempt. It was self-serving by the submitters who put that—that their particular region should be exempt. And it’s also a nonsense just to suggest that the regime should apply to Auckland. There are other areas where there are housing pressures. We want a consistent regime across New Zealand.

So, Mr Carter, your comments calling into question the integrity of Ministers, who are putting in place a regime now because otherwise, as Minister Parker said, we lose the opportunity to get this law in place before the Comprehensive and Progressive Trans-Pacific Partnership agreement comes into effect—National, in Government, was quite happy to have extensive overseas ownership. It’s quite happy to have speculation in the housing market driven up by overseas ownership. This Government has a different vision. It’s a privilege to own land in New Zealand if you’re based overseas, and we want to ensure that housing is affordable. That’s why this bill is going ahead. That’s why it’s consistent across New Zealand, and it hasn’t got the special exemptions that some members in the Opposition are arguing for.

Mr Chair, thank you for the call. I just want to come back to the real, basic premise of this. This is my first example of ideology to the fore, backed with very few facts and a perception that there is a problem, stirred up in an election campaign, and lo and behold we find out there isn’t actually that big a problem. Worse than that, we were told it was under urgency because of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Actually, now, nearly a year later, we are still going through the stages of this, when at the time it was heard under urgency—very short time frame for submissions, all the rest of it.

I do dislike what the Minister said in relation to my colleague Hamish Walker, because I sat in those select committee meetings, and I listened to the Mayor of Queenstown and 25 other people from down there who said, actually, they wanted an exemption for a certain value of property, to make sure that international owners could come in and invest in New Zealand and Queenstown. It flows on from around the 90 percent of submitters who were opposed to this bill, and, in many cases, we actually rewrote a whole series of things to pacify them. It was like some profound invention that we found out; that the Auckland property market and the apartment market needed offshore funding, foreign investment, to actually even build the houses in the first place. When we first found out about that, it was like, “Really?” It was like this Government didn’t understand the capital flows that were required in a risky business like apartment building.

As my colleagues the Hon Judith Collins, the Hon Amy Adams, and the Hon Nick Smith have said, we were building, on average, around 31,000 houses a year—a massive increase on what that was previously. In my view, this is all around perception. While the Government may have created a perception that there was a problem, I actually think we have completely underestimated the signal we have sent to the rest of the world and the investment community internationally.

I go back to my own province and I think of—and some of you will have been to this place—Elephant Hill. It’s a winery on the coast—

💬 Hon Member: It’s a very nice place!

It’s beautiful. That started because a German man found out that a small business in Hastings looked after and transformed Jaguar cars. He got one done; he got another done. He then came to New Zealand; he invested in Elephant Hill, bought a beautiful residence. His family came to live there, as did all his employees. It’s been a wonderful development, as has Julian Robertson’s investment in Hawke’s Bay, as has the Craggy Range family in Hawke’s Bay.

Now, it’s like—and all of you would have faced this; I ask you to reflect on your own personal life—when you get an invitation to a function or something down the road, and it says, “To just you and no partner.”, or “No wife.”, or “No spouse.” Sometimes you reflect on that. If you get asked to a party down the road and they say, “Please, just you come and don’t bring your wife.”, you don’t feel too good about it. The perception we’re sending to the rest of the world is, “We want your cash, we want your money, but actually you can’t buy a house here. We don’t want you to live here. You can’t buy a house.” And, actually, just like the oil and gas decision, that has a chilling effect on the international investment community.

I actually am proud to be part of the National Party and this side of the House that supports foreign investment, that supports all the very good things that go with that, and I am somewhat distracted and dismayed at the ideology that came out of the Minister’s comments about the people in Queenstown and how they were all being impacted on. What my colleague Hamish Walker has done and said—and I support it—is that for a certain value of household, a valuable house commodity, there should be an exemption so that foreign buyers can purchase them and they’re not competing with Kiwi purchasers. I actually support that in my own case, because in all the examples I’ve given, family members and staff have come from those foreign investment entities and they are living in our community. We are now saying, “Invest, but, by the way, you can’t buy a house.”, and I think that is extremely damaging to New Zealand’s reputation.

I move, That the question be now put.

Members, there are 39 amendments proposing changes to the definition of “residential land” to exclude land of various values and in various districts. These amendments are so similar in substance that I think I must test the will of the committee, putting the question on a random selection of these very similar amendments.

The question was put that the following amendment in the name of Hamish Walker to clause 4 be agreed to:

in paragraph (a) of the definition of residential land in section 6(1) in clause 4(1), insert the following subparagraph:

(i) for the purposes of this Act, residential land excludes land with a QV value above $2.5 million within the Queenstown Lakes District boundaries as set out in Local Government Act 2002

As a result of that vote, the following tabled amendments are out of order: Stuart Smith’s tabled amendment to clause 4(1) amending section 6(1), excluding residential land within the Marlborough District Council boundaries, Stuart Smith’s tabled amendment excluding land within Kaikōura District Council boundaries, Stuart Smith’s tabled amendment excluding land within the Hurunui District Council boundaries.

Lawrence Yule’s tabled amendment to clause 4(1) amending section 6(1).

Ian McKelvie’s tabled amendment excluding land with the Rangitīkei District Council, Ian McKelvie’s tabled amendment excluding land within the Ruapehu District Council, Ian McKelvie’s tabled amendment excluding land within the Manawatū District Council.

The Hon Jacqui Dean’s tabled amendments excluding land within the Waitaki District Council, the Hon Jacqui Dean’s tabled amendments excluding certain land within the Waimate District Council, the Hon Jacqui Dean’s tabled amendments excluding land within the Mackenzie District Council, the Hon Jacqui Dean’s tabled amendments excluding land within the Central Otago District Council.

Barbara Kuriger’s tabled amendment excluding land within the Stratford District Council, Barbara Kuriger’s tabled amendment excluding land within the South Taranaki District Council boundaries, Barbara Kuriger’s tabled amendment excluding land within the Waitomo District Council boundaries, Barbara Kuriger’s tabled amendment excluding land within the Ōtorohanga District Council boundaries.

Sarah Dowie’s tabled amendment excluding land within the Invercargill City Council boundaries.

The Hon Nathan Guy’s tabled amendment excluding land within the Kāpiti Coast District Council boundaries, the Hon Nathan Guy’s tabled amendment excluding certain land within the Horowhenua District Council boundary.

Andrew Falloon’s tabled amendment excluding land within the Timaru District Council boundaries, Andrew Falloon’s tabled amendment excluding certain land within the Ashburton District Council.

Maureen Pugh’s tabled amendment excluding land within the Tasman District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Buller District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Westland District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Grey District Council boundaries.

The Hon Louise Upston’s tabled amendment excluding land within the Waipā District Council boundaries, the Hon Louise Upston’s tabled amendment excluding land within the Taupō District Council, the Hon Louise Upston’s tabled amendment excluding land within the South Waikato District Council boundaries.

Jonathan Young’s tabled amendment excluding land within the New Plymouth District Council boundaries.

Tim van de Molen’s tabled amendment excluding land within the Matamata-Piako District Council boundaries, Tim van de Molen’s tabled amendment excluding land within the Waikato District Council boundaries.

The Hon Nicky Wagner’s tabled amendment excluding land within the Christchurch City Council boundaries.

Todd Muller’s tabled amendment excluding land within the Tauranga City Council boundaries.

Hamish Walker’s tabled amendment excluding land within the Clutha District Council boundaries.

Todd Muller’s tabled amendment excluding land within the Gore District Council boundaries, and Matt King’s tabled amendment excluding certain land within the Far North District Council boundaries, as well as Todd Muller’s tabled amendment excluding certain land within the Western Bay of Plenty District Council boundaries.

Lawrence Yule’s tabled amendment excluding certain land within the Tararua District Council boundaries.

Brett Hudson’s amendment excluding certain land within the Western Bay of Plenty District Council.

I raise a point of order, Mr Chairperson. Mr Chairman, I wondered whether you would give me some assistance by referring to Standing Orders—Standing Orders not Speakers’ rulings—as to how you’ve conducted these amendments. What you ruled was that the first amendment, associated with Queenstown, was in order. Now you are concluding that every other amendment for every other geographical position in New Zealand is not to be put to this committee to vote on because the Queenstown amendment was lost. I say to you, sir, that what you’re saying is New Zealand is, effectively, homogenous—that every part of New Zealand is exactly the same. So if you could help me—I didn’t want to interrupt you as you proceeded through negating those amendments, but if you could take me to the Standing Orders that are relevant, I would certainly appreciate it.

I thank the right honourable member. I would refer the committee to Standing Order 307, and in particular 307(4): “The chairperson, at his or her discretion, may put a single question on a group of amendments if—(a) the amendments stand in the name of the same member: (b) the amendments lend themselves to being grouped on account of their content or subject-matter, or because they form a single alternative proposition: [or] (c) grouping of the amendments is necessary to enable the committee’s effective consideration of the bill.”

💬 Rt Hon David Carter: Mr Chair—

CHAIRPERSON (Adrian Rurawhe): I’ll just finish. That’s the Standing Order that I have applied in this instance.

I raise a point of order, Mr Chairperson. It’s very important that Standing Orders are appropriately interpreted. The genesis of this particular Standing Order comes from a bill that was in the House in the late 1990s, early 2000s, that related to the Employment Contracts Act changes. In that case, there were a large number of amendments that were—my apologies; it was late 1999 and it was the Accident Compensation Act—on the Table at the time that affected the commencement date. It was a ruling by the then Speaker, once he was recalled to the House, that a date, no matter what it was, could not be voted on again if a later date had been accepted by the House.

Now, the difference here is that we’re not talking about a date, we’re not talking about a number, and we’re not talking about a commencement day on which the bill comes into enforcement; we’re talking about various geographic areas in New Zealand. The members who have put up their tabled amendments believe that the residents of those areas would be benefited by their exclusion from the Act. Now, we already know that the Government has sought to exclude certain projects from the Act, so it can’t be unreasonable for the committee to wish to exclude certain areas of the country from the Act. To simply read them all out and say, “Well, they are now excluded.”, I think is an absolute abuse of the provisions that are laid down in the Standing Order, and, in fact, any interpretation of the Speakers’ rulings, and I think it would require a new Speaker’s ruling.

With respect to the Hon Gerry Brownlee, I think the member confused two issues. Where a vote is taken on a particular amendment to a provision that, effectively, overrides later proposed amendments, the later proposed amendments are ruled out of order—that’s not the situation here. The other situation arose not from the Employment Contracts Act but as a consequence of a change to Standing Orders made after the Auckland City legislation, where the then Opposition delayed the process of the bill by a number of days by presenting a number of amendments, which were required to be voted on and that were virtually identical in substance, except a date or a locality changed in a similar way.

Now, what the Chairman has ruled on here—as I heard his ruling—is that in his view, according to Standing Orders, having dealt with the Hamish Walker amendment, all of the others were identical in form except for changing the number for the numeric threshold and the district to which it is applied. He has, in accordance with Standing Orders, found that those other ones are out of order.

I’m going to rule on the first point of order.

💬 Hon Gerry Brownlee: Well, there’ll be another one coming.

💬 Rt Hon David Carter: Point of order. I want to make a further—

💬 ADRIAN RURAWHE: Yeah, I’m hearing you both, gentlemen, but I’m going to rule on the first point of order, thank you. There is a way forward on this, and I think the Hon Gerry Brownlee mentioned that in wanting—or maybe asking—for a new Speaker’s ruling. I’ve applied the rules as I see them in this instance, and I believe that that Standing Order does apply in this case. The way forward, if the members wish to do so, would be to test my ruling with the Speaker.

Mr Chair, that’s probably the right thing to do. The difficulty for the House, of course, is that this original ruling in here was largely due to a series of amendments that were laid on the Table at the time by none other than the Rt Hon Trevor Mallard. However, I move, That we recall the Speaker.

Motion agreed to.

House resumed.

Speaker Recalled