Overseas Investment Amendment Bill

Members, when we were last considering the bill, we were debating the question that Part 2 stand part. The Hon Gerry Brownlee was speaking and has four minutes and 42 seconds remaining should he wish to continue.

I do wish to take this time. This, as I was saying as we came to a conclusion last night, is the part in the bill that fills out the substance of what is intended in the bill, in a legislative sense. But it kind of misses the effects that the bill might have on the New Zealand economy.

So the first thing is that I would assert that there is enough leeway in this bill for anyone who really wants to buy land in New Zealand but does not qualify by way of being a resident to drive a bus right through the middle of it. There are ways in which there can be a manipulation of the Government’s other policies, and, most particularly, their forestry policy, that could see people buy the properties they want. So let’s be clear: forestry blocks are allowed up to 1,000 hectares. So where are the best properties with the highest value in New Zealand? They’re generally at the lake’s edge, generally at the seaside, or generally in some well-respected, well-loved, inner-city suburb. Most of those will have various restrictions because of the fact you can’t aggregate policy there. But if it is a rural policy somewhere in the Queenstown district, or if it is anywhere up and down the coastline—perhaps Northland—and there is sufficient land nearby to put in a forestry operation, the law specifically says it’s OK to have a dwelling there, to superintend the forestry operation, and it won’t be hard for people to put planting programmes in place that ensure that the property can be onsold to the highest bidder from offshore in the future.

So it doesn’t do what it sets out to do. But what it can do is see some of the more productive land in New Zealand taken away from cash production on an annual basis and put into production that might be some 30 years out, in forestry—unless, of course, they do something clever, like plant some pine nuts, for example. These are a small pine tree; it’s called the stone pine. They grow to about 5 or 6 metres in five years, and they’re productive within that time. Now, of course, I don’t think Mr Jones thought that this would work, but I’m not sure that that would be excluded as a horticultural product. It is, after all, a pine, and it would be a forest. But the goal of somehow creating a massive carbon sink from trees that, after five years, only grow about 300 millimetres a year is completely lost, and also the chance that trees that height might block those pristine views of the ocean or the lake or wherever it is that their plantation goes is not high. But it further serves to recognise the nonsense of not encouraging horticultural investment in this country, as well.

Then there’s the opportunity to build, inside cities, apartment buildings. People are quite welcome to come in and build these apartment buildings and even hold the ownership of those apartment buildings, becoming a foreign landlord in New Zealand—all permissible in this bill; all permissible in a bill that’s apparently going to stop foreign ownership of land in New Zealand and make New Zealanders the tenants in those apartment buildings.

So we think, Madam Speaker, that this is—

💬 Hon Jacqui Dean: Mr Speaker.

—once again—my apologies, my apologies. We think, Mr Chair, that this is a bill that just like the last one that the House was discussing before we got to this, is one of those “pay-the-piper” exercises—the cost of having New Zealand First in the right place at the right time. The problem is it will put huge pressure on the economy. We’ve seen building companies collapse in the last 48 hours, and there’ll be more. And that’s because of the tightness of being able to get capital. So I haven’t even begun to speak—and my colleagues who follow me will—about the restrictions on business activity in New Zealand.

Thank you, Mr Chair. I rise to speak to clause 19(d), which inserts schedule 3 of this bill, and, in particular, I wish to speak to a series of SOPs—Supplementary Order Papers—introduced by the Opposition.

💬 Hon Judith Collins: What’s a “SOP”, dear?

The “SOP”, a slop, a slip, a slither, a slew, a slaw—a veritable salad of SOPs indicating that all they want to do is mess with the House. Let me read you one of the amendments that have been introduced by the Opposition.

The amendment introduced by the Rt Hon David Carter talks about horticulture. He wants to introduce an exemption in respect of horticulture. And on the very same form—the very same form, virtually the very same words—the Hon Alfred Ngaro wishes to introduce an exemption in respect of bananas. Simeon Brown wants one in respect of mānuka. Chris Penk wants on in respect of apples. These are all the same. Chris Penk goes on to strawberries. Todd Muller is going for kiwifruit. Melissa Lee is cabbage, Judith Collins is blueberries, Matt King is blackberries, Simon O’Connor is tamarillos, Jian Yang is gooseberries, and Simeon Brown is here again, on mandarins. Maureen Pugh has hops, Louise Upston has lavender, Jacqui Dean has nectarines, and more to come from Jacqui Dean: it’s apricots. Jacqui Dean can’t stop there—swedes. Lawrence Yule is interested in fajitas, Dan Bidois has raspberries and then he has tulips—perhaps he’s tip-toeing through them.

I can understand why the Hon Gerry Brownlee gave the last speech: he’s keen on pine nuts. Simon O’Connor is interested in grapes and also in almonds. Jonathan Young is interested in exotic edible mushrooms. There is Jonathan Young, again, on plums. Tim van de Molen is interested in corn and also in maize. Matt Doocey is into quinoa and also into beans and also into peaches. Denise Lee favours cherries and lentils—that’s not a good mix, Denise Lee. Melissa Lee’s amendment has at least something pretty going for it—it’s sunflowers, but also flax. Denise Lee is back with pears and olives; Hamish Walker has wheat and oats; the Hon Judith Collins has sorghum, sometimes pronounced “sour gum”; Paul Goldsmith has barley—and on it goes. Paul Goldsmith also has rye; Andrew Bayly has potatoes and hemp—what is Andrew’s interest in hemp?—and hard nuts, not pine nuts. David Bennett—ah, that’s not horticulture; he’s going to move on to equine bloodstock. Good on him. But David Bennett also has canola—a healthy man is David Bennett—and peanuts.

A mix, a melange, a mess—I suggest that the Opposition is messing with the committee, messing with this bill. They are not interested in actually debating the substance of this bill. This is simply a way to delay progress, and one can only suggest that they should eat their salad, not present it to the committee.

Thank you very much, Mr Chairman, for the opportunity. I listened to the speech from Deborah Russell, and she listed all the possibilities for exemptions that were tabled, but, in her short speech, she didn’t give one valid reason why we shouldn’t accept them. So I ask the Minister in the chair, the Hon Ron Mark, whether he could explain to this committee why we are making an exemption for forestry. As the Minister thinks about his answer to that, I’m going to help him with his answer, because I know the answer. The issue is the bill was so rushed and ill-prepared in the hands of the Hon David Parker. It was about stopping foreign investment, because the other side of the Chamber does not like foreigners investing in this country. Then the Hon Shane Jones finally, at the eleventh hour, realised that this would stop his forestry programme from planting a billion trees each year. So they’ve rushed in this Supplementary Order Paper 19, which has suddenly made a grand exemption for forestry, and yet for nothing else.

So I want the Hon Ron Mark to stand on his feet and tell us why, and justify why we’ve got an exemption for forestry, because I don’t see any reason why it should be only forestry. I’ve got an amendment, as Deborah Russell pointed out, for horticulture. Why can’t we welcome foreign investment in horticulture when the Hon Shane Jones wants to welcome foreign investment for forestry? So I look forward to that answer from Mr Mark.

The second question I have for the Hon Ron Mark—and this is after an intervention by the Hon David Parker last night, when he said that this bill is here so we can drive down the price of houses. I want to know from the Hon Ron Mark how much they intend driving down the price of houses. I can tell him that if they drive down the house prices in cities like Christchurch and Wellington and Auckland, there will be a lot of people who will be very quickly in zero equity. A lot of people in recent years have struggled to buy their first house; they’ve mortgaged themselves to the hilt, leaving them not a lot of margin of equity. If Ron Mark and this Labour - New Zealand First - Greens Government is intent on driving down the price of housing, I warn him today that he’s going to face a backlash from voters that will, at least, have one desirable effect: make sure we don’t have to put up with New Zealand First in the 53rd Parliament of New Zealand.

The last point I want the Hon Ron Mark on his feet for is to provide an answer to me around rural proofing, the new concept in the House today at question time from the Hon Damien O’Connor. He gave a guarantee that all legislation advanced by the Labour Government would be rural proofed, and I want to know how this piece of legislation has been rural proofed, because I suspect it hasn’t. If it’s been rural proofed, then the first thing the Ministry for Primary Industries should have picked up is that the real estate value of farms has now been lessened by this legislation. Previously, there was a market where international buyers could have a look at buying a farm. They then went through a rigorous Overseas Investment Office process, and, ultimately, they had to prove net benefit to New Zealand. That’s good legislation, modified by the National Government, and it stood the test of time, but what you’ve got now is the effective elimination of those foreign buyers. For any farmer who’s heading towards retirement years, about to consider putting his farm on the market, I can tell the Hon Damien O’Connor that this legislation will affect the price that retiring farmer gets.

So I want to know what process it went through with rural proofing. We’ve heard the Hon Damien O’Connor in question time saying every policy and piece of legislation will be rural proofed—well, let’s hear it today from the Minister now in the chair, the Hon Damien O’Connor.

Thank you, Mr Chairman. I’m very pleased to take the opportunity to answer some of the questions put forward by the previous speaker, David Carter. No, this piece of legislation has not been rural proofed. We are going through a thorough process of implementing this, because what happened last time in Government—we did rush to get it in place, it wasn’t entrenched, and then the National Government threw it out. In spite of being the so-called champions of rural New Zealand, they threw out rural proofing.

I don’t want to take the committee’s time for too long, other than to say no, it hasn’t been covered in this legislation, but if it was, I’d have to say that I’m sure the vast majority of rural New Zealanders would actually support this, because the one thing that they are most concerned about across rural New Zealand is succession. Succession is not transferring a New Zealand farm into foreign hands; it’s actually transferring it into the hands of another keen New Zealand family. The National Party, as it always does, just wants to sell—sell, sell, sell, sell—and give all their mates an opportunity to clip the ticket along the way. Frankly, we are here for New Zealanders, and this piece of legislation is unashamedly for New Zealanders.

Around the world—that previous Government may not have realised—there are trillions of dollars slushing around. A lot of it’s just been printed, actually, and if you can get a 1 percent return on your money somewhere, you’re very lucky. So the opportunity to bring that money into New Zealand, where there’s currently no capital gains tax and where, you know, you can get 5 or 6 percent for your money, is just a goldmine, literally, for them, at the expense of hard-working New Zealanders and farming families. So I have to say that, in defending and answering some of the questions, we’re unashamedly for New Zealand farming families.

The previous member and his colleagues might want to sell every farm to foreigners; we don’t. Quite frankly, we don’t, and we don’t want those foreigners to set unrealistic values based on them paying 1 percent for their capital when poor, challenged, hard-working Kiwis have to pay 5 or 6 or 7 percent for their money. We just want succession in the rural sector.

I don’t want to take too much time in the committee, but I hope that answers the previous speaker’s question. We are unashamedly for New Zealanders, not for foreign investors.

Thank you, Mr Chair. Just in response to Minister Damien O’Connor’s statements about being in favour of New Zealanders but not in favour of foreign investment, he seems to have forgotten that the whole economic history of this country has been built on foreign investment over many, many decades. If we want to grow and have jobs and opportunities for New Zealanders, that requires somebody to make an investment, either to start a new business, plant a new set of trees, plant a new bit of horticulture, hire a new person—take a risk. It requires somebody investing. Now, if we want to rely on our domestic savings, that’s fine, but we’ll grow very slowly because there’s not many of them. If we want to grow faster, we import capital, as we have over many, many decades, and that is why this bill is so dangerous for the economic prospects of this country.

I also wanted to respond to the comments from Mr Jones the last time this bill was before the committee a couple of days ago, where he talked about why forestry was exempted from this bill in Part 2, as we’re discussing at the moment. Mr Jones—this is the same Mr Jones who doesn’t like being asked pesky questions about his involvement in the Provincial Growth Fund. He gave a long and detailed speech about why it’s important to shrink red tape for the forestry sector, and that was what he was going to go about doing. He’s going to shrink the red tape through this piece of legislation, and he also waxed lyrical about the need for investment in forestry. The thing that was left hanging was: what is so unique about the forestry sector that that needs to enjoy the shrinking of red tape but every other sector of the economy does not, whether it’s housing, all manner of other primary produce, whether it’s golf resorts and tourism spots—all those other things that benefit from investment and can provide jobs and growth? Somehow, that same logic doesn’t apply, and I think most New Zealanders are scratching their heads and trying to figure out what is so special about forestry. The obvious answer to that is it is something promoted by New Zealand First, and this is a political jack-up that’s been dealt with in this Government in an unseemly way. No normal Government would get away with legislation that is so unprincipled as this.

It’s always a good place to start to go back to the regulatory impact statement, and I dug this out because that’s where Treasury officials have the opportunity to have a look at the draft legislation and just check some basic questions about how it was developed and how it’s put together. In this regulatory impact statement, the first thing Treasury says is it was done very quickly in order to fit the time frames of the 100-day plan. That has meant that there has not been any opportunity to consult with private sector organisations or the general public to inform the development of this policy. Well, that’s obvious, because we’ve seen that there has been, certainly, no involvement from the population. Then it asks whether there was a range of options considered, and the answer to that is, well, no—because of the Government’s commitment to a specific policy, no other housing policy measures or wider overseas investment regime issues were raised or discussed. And then, thirdly, the assumption underpinning this impact analysis was that it was constrained by a lack of empirical data, including around current levels of overseas investment. So, basically, the only conclusion you can draw from the regulatory impact statement is that Treasury completely washed their hands of this bill and would have nothing to do with it.

So the question that I have for the Minister in the chair, Damien O’Connor, is: has there been any further analysis asked for from Treasury as a result of the many detailed recommendations of the Finance and Expenditure Committee in terms of the costs and benefits of this part that we’re dealing with at the moment and the exemption of forestry? Has there been any further work done, and has there been any subsequent effort on behalf of Treasury, particularly in the regulatory impact unit, to try and get a better understanding of what we’re dealing with here in this particular part?

Now, I have a couple of amendments relating to “If it’s good enough for forestry, why is it not good enough for barley and for rye?”, and I’d be interested in the Minister’s views on that. He’s a man of the soil, and he’ll understand that we all need our barley sugars and that those particular crops are important to New Zealand. There is a logic that Shane Jones explained to the committee that we do need to have investment from around the world in order to grow our economy and we want to be slashing red tape so that people can get on with it and make the investment and draw upon global pools of capital. It’s good enough for—[Time expired]

Thank you, Mr Chair. First of all, I’d like to acknowledge the poor, suffering officials over there, especially under the regime they’re under at the moment, but I’d like to acknowledge the work that they’ve done. The Overseas Investment Amendment Bill: what a dog of a bill—a flea-infested, tick-ridden, mangy dog of a bill. Nothing surprises me. This is classic poor bill-making—ad hoc, piecemeal.

Now, I’ve heard from the other side of the Chamber the often-repeated phrase that we have the highest homelessness in the OECD. Do you really believe that of all of the OECD we have the highest homelessness? The infamous Nazi Joseph Goebbels said “Tell a lie once, it’s still a lie; tell it a thousand times, it becomes the truth.”, and I think they’re trying to cover that philosophy. Countries have different definitions of what homelessness is. The Japanese are the lowest end of the homelessness scale. They have 0.04 percent homelessness. That’s one of the lowest in the OECD, because their definition of homelessness is rough sleepers. Now, if you used that definition, we’re at 0.04 percent, down at the bottom with Japan. So that myth that we have the highest homelessness in the OECD—that is exactly what it is: it’s a myth.

Now, these kinds of statements are made by this coalition Government all the time. This bill is reactive legislation—no analysis. There’s no evidence that foreign investment increases house prices, and this bill doesn’t work overseas, so why would it work here? This bill is full of random exceptions. For example, in Queenstown, foreigners can buy an apartment; they just can’t live in it. In Singapore, it breaches the trade agreement with them, so they’re an exemption. This is full of loopholes. Ministers have the power to grant exemptions for whole classes. They could grant an exemption for all of the urban houses. In the bill, it says in new section 61C, inserted by clause 33A, “any transaction, person, interest, right, or assets … from the requirement for consent or from the definition of overseas [person] or associate or associated land.” Now, I don’t know about the rest of us, but I don’t want Government Ministers having that power. This will create a field day for lawyers seeking exemptions for their clients.

Forestry has an exemption: 72 percent of our forests are foreign-owned. Why not viticulture, agriculture, horticulture? This is full of unintended consequences. They saw that the telecommunications and the power companies—some of them are partly foreign-owned—would have to go through the Overseas Investment Office, so they carved out an exemption. But what about the developers of retirement homes? It doesn’t work overseas, and it won’t work here.

Now, this Te Ārai case—that’s a case in point. That stinks to high heaven. The Minister was doing backflips in the House a few weeks ago trying to explain this decision. No amount of cartwheels will explain away that faux pas. Last year, former MP for Northland Winston Peters said, “Why do Kiwis, going about their lives as best they can, have to fight every step of the way to preserve what is their right against a billionaire developer from another country and a complicit Government?” And you know what? Now he’s in Government, he’s doing exactly that. All I can say is thank God for the Speaker shutting this down. I’ve come to expect this from this coalition Government. The bar has been lowered—has never been so low. Lift your game; otherwise, you’re going to be gone in 2020.

I move, That the question be now put.

Thank you, Mr Chair. It’s an absolute pleasure. I want to talk mainly about clause 10(1)(b) and its subparagraphs, but before I move on to that, I just want to reflect for a moment on the contribution from the Hon Shane Jones earlier in this debate, which a couple of my colleagues have also touched upon today, because I think it was really quite remarkable what he was really saying. In trying to justify why there should be exemptions and exclusions to allow large slices of land to be carved off for foreign-owned forestry investment, he is really categorising and characterising what New Zealand First has become in Government. For a party that campaigned upon being all about New Zealanders, it instead is all about foreigners, because Mr Jones is talking about the ability to use the Provincial Growth Fund to help to provide incentives for foreign companies to invest in forestry in New Zealand. That is $3 billion of taxpayers’ money, $3 billion that comes from the sweat of the brows of hard-working Kiwi taxpayers, and he wants to give a huge chunk of that to foreigners—hardly putting New Zealand first.

But I do want to actually talk about—because this part of the bill is actually where the ideology that sits beneath this legislation shines through, and nowhere is it more clear than in clause 10(1)(b) and its subparagraphs, because what they show is the Minister responsible for this bill in his full Marxist flight. One speaker last night was accused of being socialist, where they seek to grab the means of production. Well, this goes so much further than this, because this clause and the subparagraphs expropriate the property of New Zealanders without compensation, and I’ll explain how it does that. It expropriates the property by expropriating, in part, the maximal value that a New Zealander could realise on their property, by introducing, first, a new category that didn’t exist, which means that all residential land not otherwise sensitive is captured under the provision and has a set of criteria that determines who that property can be sold to—criteria that does not exist for such land today.

In a stroke of the pen and with the ink in creating this bill, the Government is taking from hard-working New Zealanders—New Zealanders that work, in some cases, for 20 or 25 years to pay off the mortgages on their properties—their right to sell that property to the person who is prepared to give them the most for it, and, today, they can. Today, New Zealanders live and go to work and live on those properties knowing that they can sell it to the person that will give them the most value. Those members can’t argue to oppose that, particularly New Zealand First, but other Government members—not only before they took those benches but since they’ve been in Government—have tried to tell New Zealanders that it’s foreigners that are coming in and bidding up the price of houses.

Now, the stats actually don’t show that. The data from Land Information New Zealand actually gives the lie to that statement, but they’ll make the statement none the less, and what they’re doing here is they are preventing New Zealanders from realising the full value of their property investments. That is an expropriation of that property. I ask this committee: where else in the world do they do that? Where? Where do they expropriate property without compensation? They’ve done it for years in Zimbabwe. This is a full-on Mugabe moment. But it’s worse. It’s not just Zimbabwe. If you were reading the news reports yesterday, the Marxist faction inside the African National Congress—if you go to South Africa, they’re going to be doing this, as well. So New Zealand’s going to join the ranks—the illustrious ranks—of the new South Africa and Zimbabwe in this piece of legislation.

Should we be surprised? Shocked, yes, but should we be surprised? No, because immediately before this discussion, we were discussing—and, in fact, passed a second reading of—another bill which is also shared by Zimbabwe, the ability for a party leader to dismiss errant members of Parliament. We’re going down that track very quickly—very quickly—and it’s an absolute disgrace that members remain in this House. When they go back to their electorates, where they’re electorate MPs or list MPs, look into the eyes of a constituent and say to them why it’s good for them that you can expropriate their property, because that’s what you’re doing.

This is a disgrace. I actually welcome all of the Government members to go out and tell New Zealanders that what they’re doing to them is a good thing, because it most certainly isn’t.

Before I give the next—

💬 Hon Member: Communist!

CHAIRPERSON (Adrian Rurawhe): Excuse me. Before I give the next call to the Hon Jacqui Dean, I just want to remind members, after that speech, that we are dealing with Part 2 of the Overseas Investment Amendment Bill. Members have been drifting into other bills before the House, and as the sole decision maker around relevance, I’m advising members that if they have new arguments to this part, they ought to bring them out now.

Mr Chair, thank you. I too have been perusing the regulatory impact statement for this ill-considered and ill-founded bill and also noted the clauses that were brought to the committee’s attention by the Hon Paul Goldsmith, but I want to go over them again because they really are quite damning of this piece of work.

So the first comment is around “Key Limitations or Constraints on Analysis”. In the development of a bill, analysis and consultation with private sector and consultation with the public, with industry experts, and with colleagues is, I would have thought, a critical part of the development of any decent piece of legislation, particularly one as far-reaching and important as this one. The regulatory impact analysis notes—Treasury note—that “The key limitations and constraints applying to this analysis are as follows:”, and so right up at the front there, Treasury are saying that there are limitations and there are constraints. So this is not a good start to any Cabinet’s consideration of a significant piece of legislation that comes before them in the Cabinet room.

“Time constraints: Ministers have directed officials to prepare this policy within the timeframes of the 100 day plan.” Fair enough—every incoming Government has its goals. “Accordingly, this analysis has been prepared under tight time constraints. This has meant that there has not been any opportunity”—any opportunity—“to consult with [the] private sector organizations or [to consult with] the general public to inform the development of this policy.”

So, in other words, Treasury are saying—just as the Hon Paul Goldsmith noted—that the Government and Treasury have not had time and not had the opportunity to take New Zealand along with them on this very significant piece of legislation. No time to do it; no consultation with the public or industry experts—well, how does that make for good decision-making by Cabinet?

So we go on: “Range of options considered:”—really important, and Treasury does this very comprehensively, normally. They weigh up the options, because there are always options in the development of a piece of legislation. “This analysis”, they go on to say, “has been constrained by the Government’s commitment to implement this specific policy.” So, in other words, the Government has identified this specific policy in their minds—housing affordability—and all the work in this bill has to lead to that goal. OK—fair enough. “As such, no other housing policy measures (for example policies that would support the broader objective of increasing the supply of residential property)”—so, in other words, they didn’t actually look at any options; they just looked straight down the line at the end and aimed their policy work in that direction. No wonder Treasury are backing away and saying, “Well, you know, we didn’t have time—not our problem.”, which, actually, is what the Government is tending to do themselves.

Nor did Treasury have the opportunity to look at “wider overseas investment regime issues”. They haven’t been analysed and they haven’t been evaluated, so we’re going to do the work for them. We’re very happy to do that in recognition of the importance of the agricultural economy in New Zealand. So it is fortunate, in a sense, I guess, that this exemption for forestry development has given us an opportunity—and I know that the Hon Damien O’Connor is going to thank me for this—to widen the net of exemptions so that other aspects of the economy can have those exemptions under this bill, under this Act, to allow for overseas investment in their particular sectors.

I’m going to get very parochial here, and I’m going to now address my amendment which provides for “Exemptions in respect of overseas investments in sensitive land involving apricots”. Now, one of the members from over the other side of the Chamber helpfully ran through all the amendments which our members have tabled, and, obviously, having raised them and shown an interest in them, we are very happy and willing to speak to them. So, first of all, I’d like to address the issues of apricots—[Time expired]

I move, That the question be now put.