Overseas Investment Amendment Bill

Thank you, Mr Chair, and when it comes to Part 3 of this bill, it is important that we have a long debate on that since it was such a short debate on Part 2, which was an important—

CHAIRPERSON (Adrian Rurawhe): Order! [Interruption] Order! I am on my feet. It is inappropriate for any member to question the decision of the Chair to accept a closure motion. I accepted it, and it is not to be commented on.

OK. Part 3. Very sensitive day today, isn’t it, because we’ve had two parts—

CHAIRPERSON (Adrian Rurawhe): Order! Order! Sit down. And you’re not allowed to comment on a ruling that I’ve just made. That’s two. Don’t do it again. Third time, I will terminate your speech.

Mr Chair, thank you for that. So when we come to Part 3 of the Overseas Investment Amendment Bill, we’re talking about enforcement and other miscellaneous matters within the bill. When we look at the enforcement issue, it also comes down to what you would be enforcing in the bill. It’s important to look at some of the options where enforcement could come into effect.

If we look at clause 22, to amend section 39, it says, “Regulator may require any person to provide information for statistical or monitoring purposes”—that seems like a fairly standard approach. Then you get to new section 40, in clause 23, which says, “Regulator may require person who is subject to condition to provide statutory declaration”—that is also a fairly basic sort of approach. But, then, when we get down to clause 25, new sections 41AA to 41D, we get to things like providing information or documents, and confidentiality of information and documents, and conditions relating to publication or disclosure of information or documents. That’s where it gets a little bit more interesting because confidentiality is something that this Government is not known for. It had prided itself on having openness and transparency—that was what we were told when they started off in Government—yet we have yet to see that.

I just want to give an example of how we want to see how they would relate to that confidentiality in this situation. Just take the situation of an overseas investor that wants to come to New Zealand and invest in land. That overseas investor may have a less than reputable history in their home country. They may not meet the good-faith test that one would expect. They may even have a source of income or source of assets that one would not expect. Yet, when we come to that information about the confidentiality of information and documents, it would be really interesting to see about the sources of those funds that come into the country and how they’re used.

Take that potential investor that may come in—Mr Chair, it’s in new section 41C, inserted by clause 25, if you’re looking for it there—from that overseas country. Now, there’s an exemption for forestry that’s carved out in the legislation. So with that exemption for forestry, they don’t actually have to provide the information that would normally be expected. So there is an element of confidentiality there for that particular buyer.

What is even more important than that—and something that hasn’t really been traversed in the debate so far—is the payments that will actually be made to that investor. What will happen under this legislation is that there is an exemption for forestry, but, at the same time, the Government is going to introduce payments to forestry. So there will be an incentive that the Government will give, through its emissions trading scheme (ETS) programme, for forestry. We have yet to see the amount of that incentive, but we know it’s coming.

So, effectively, that foreign investor that may have a background that is less than rigorous and less than successful, in the sense of a normal investor that would come in under an overseas investment regime would have a free ride to come into New Zealand, to pick the best of New Zealand land that’s under 1,000 hectares—

💬 Andrew Bayly: Probably it’s around the Waikato.

—yes, it’s probably in the Waikato—and to put that land into forestry and not care about it. The Minister, when he spoke, talked about a 1 percent return as being something that some of those investors from overseas that are just looking to park their money would be quite happy about. Now, are we going to have that confidentiality clause apply when we actually have the payment that will come from the New Zealand Government to that investor? I can guarantee you—

💬 Andrew Bayly: What was that again?

That payment that will come because there will be a forestry incentive payment coming under the ETS. We know that’s coming. So, basically, that foreign investor that might be less than reputable and not meet any criteria under New Zealand foreign investment now will get a free ride to invest in New Zealand. There will be confidentiality clauses that will apply, and then there will be a payment to them from the New Zealand Government. Now, we don’t know whether that payment is actually going to be equal across all forestry investments or whether that payment is going to be on the basis of scale of forestry investment. We don’t know if that payment would actually be there to encourage that investor to come in. There may be some other compensation that that person was looking for, as well.

So there’s potential for this clause to be used in this bill to actually mean that it will hide information around someone that may be less than reputable and that has got a free ride to invest in New Zealand land now, under this legislation, by going into forestry, and that will get a payment from the New Zealand Government which would exceed the 1 percent return that the Minister had said some people around the world would be quite happy with. In fact, many people that are in the situation that a confidentiality clause wouldn’t apply to don’t want any return; they just want to park their money up for a number of years. They just want to have a balance of investments around the world, because they may have business interests in their home country—

💬 Mark Patterson: You’re a bit late coming to this conclusion.

—that they’re not so clear about. What was that from the member across there—that member across there that has been trying to be like “We’ll look after this bill.”?

💬 Hon Member: He’s only got about 20 more contributions before he’s gone.

He has. So I think there’s a real problem here with transparency for this Government, because we have heard this is going to be the most transparent Government out. What is happening here is the worst kind of a foreign investor: the person that doesn’t want to actually add to the New Zealand economy, that actually would take a very effective dairy farm or kiwifruit farm or apple farm out of that and put it into forestry just to park their money, just to have their assets there. They would be quite willing to do that, knowing that they are getting a guaranteed return from the New Zealand Government on that investment and nobody would know—nobody will know.

The members opposite say, “Oh, that will never happen. That will never happen.” Well, mark my words, the exact people that want to come and invest in New Zealand that can’t now, under our current regime, because they are banned—whether they’ve got a reputation in their country, or whether the funding that they are going to bring in has a source issue, or whether they are not going to add anything to the New Zealand economy; they just want to park up their assets—have now got a free ride and a free cheque. They’ve got a free cheque from this Government.

I can’t understand why the New Zealand First Party, which is against foreign ownership, is now enabling foreigners to come in and paying for them to come in. That’s what they’re going to do. The New Zealand First Party will be passing in this Parliament, before the end of the year or next year, a payment for forestry investment. They are paying for foreigners to buy New Zealand land. What has happened to New Zealand First? But that’s what happens with Shane Jones running it and making great economic decisions!

Where’s the Green Party—the Green Party that’s for the environment? Where are they? Why aren’t they actually thinking about those kinds of potential investors that will have their hands on dirty money? There could be money from making bombs that are sold around the world. That’s who the Green Party is letting come into New Zealand now and have a free investment. What’s worse, they’re going to pay for it. They’re actually going to pay for it, and then nobody will ever know because of the confidentiality clauses that will be in this.

So I think this is a disgrace to the New Zealand Parliament. I think it really shows how, if you make legislation on the hop and you’re doing it for a particular issue, and not actually looking at what the practical application will be, it will mean that New Zealanders are taken for a ride by the wrong people. What we need is an open, transparent Government, and we need to be able to know who are making these investments, why they are making these investments, and where the money came from.

Thank you, Mr Chair. I’ll just take an opportunity to clarify a few things in Part 3 of the bill, “Enforcement and other miscellaneous matters”, and it does provide provision there for regulators to get access to more information. One of the things that have happened with overseas investors is that they’ve come in, purchased, made promises, and not delivered. This will increase the ability of people in charge—the Overseas Investment Office—to follow through.

There were a couple of comments made—questions, I guess. Firstly, I want to acknowledge that the coalition Government does support overseas investment, but for the good of New Zealanders. You see, what we are passionate about is actually having investment into this country for New Zealanders. Those who want to come and live here are New Zealanders. So they can come here and bring themselves and their families and be residents and they can invest, and we welcome that. The reason for forestry is—the National Party may not have heard of greenfields investment, and if ever there was an example of that it’s forestry. You create greenfields—forests—where they would not have otherwise been, and that’s why we welcome that investment.

There was a comment made by one of the members of the National Party that this is a dog of a bill. Well, I don’t disagree. In fact, this is an amendment bill—an amendment to the Overseas Investment Act. The Overseas Investment Act, run by the National Government, was a lapdog bill. We are going to change it to a watchdog bill—a dog bill, yes—because it now will be able to be a watchdog on the investments that come into this country and be an appropriate level of scrutiny that ensures the objectives of the bill, which should be—they certainly are under the coalition Government—to invest for New Zealanders’ benefit. Then we have watchdog provisions in here—particularly through Part 3—that enable the regulators to check on that investment and have those people deliver on their promises.

There will be members of the National Party who are happy to clip the ticket on the sale of anything to anyone around the world just to make a quick buck. We’re not into that game; we are into long-term strategic investment. We welcome partnerships. We welcome people who want to come in and invest in greenfields projects like forestry and other things that add to the value of the economy in this country. But just being a lapdog bill, as it was prior to the amendment, where the previous National Government allowed anyone to come in, to make their capital gains, and to take their money—we are not going to sit on our hands and allow that to continue. So Part 3 of this piece of legislation will provide the tools to turn this bill from lapdog into watchdog, and I know each and every New Zealander will appreciate that overseas investors are welcome, but they’ve got to add to this country and work with us.

Thank you, Mr Chair, for this opportunity. I must say that was an interesting speech from the Hon Damien O’Connor. He told us—he told Parliament—that this Government is pro - foreign investment. I think they’re as pro - foreign investment as they are pro - the West Coast: not really at all, actually—certainly not at that protest I was at the other day. Gosh, it was fun getting back to protesting. I haven’t been able to do it for a while. Fantastic! Now we’ve got something to protest about, and it’s this useless Government. And, I’ll tell you what, the West Coast people were busy down there. I didn’t see Greg O’Connor there. I didn’t see Greg O’Connor. He wasn’t there—he wasn’t there. No, they’re all wondering what happened to him. They used to think he was one of theirs, but they don’t now.

I thought it was very interesting listening. This part of the bill is all about enforcement and other miscellaneous matters, so let’s have a look at this enforcement, shall we? We’re going to have bureaucrats enforcing it and checking things are happening. Well, are they going to have a little uniform? Are they going to have a little uniform? What are going to be their little powers? Is the Government going to give them the powers of the Search and Surveillance Act? No! No! The Minister in the chair, Damien O’Connor, is looking a little bit worried now. This is, by the way, the same Government that wants to get rid of the Serious Fraud Office.

💬 Andrew Bayly: Oh!

Yeah. So they’re the people in charge of corruption investigations, and what they’re doing is they’re going to get rid of that and, at the same time, by the way, they’re going to have all of these bureaucrats running around checking what’s happening—checking without any powers of search and surveillance. Oh dear! So I suppose they’ll just have to ask for some paper, because that will definitely tell the truth.

I think that we’ve got a Government that doesn’t quite understand that if you’re going to have enforcement and lots of rules around things—or you say you are going to have enforcement—you have to give your bureaucrats the powers to do so. So I just think this is a most interesting part of the bill. We’re going to have all sorts of opportunities here for things to be done outside of this bill and within the exemptions as well. When we look at this, what they’re going to say here is that the “Person who acquires interest”—this is new section 51A in clause 31—“in residential land must make and provide statement”. Oh, that’s going to be good! That’s going to be tough!

💬 Andrew Bayly: A one-pager.

A one-pager—a statement. Well, I guess the trouble is that if you’re dealing with people who are telling the truth, that won’t be a problem, but what if they’re not? Who’s going to check? Are we going to have people checking are they really living in a relationship with a New Zealander, are they really permanent residents, or are they actually having us all on?

I’m also fascinated about why we have the exemption for forestry. I say this because the Hon Damien O’Connor talks so much about it. Some of you will remember that there is a place called Kāingaroa Forest. As a child—so just a mere 10 years or so ago, or a few decades, maybe—I was taken on a bus trip. Not to be lost, thankfully, like little Gretel, but, instead—

💬 Rt Hon David Carter: I bet she sat on the back seat, eh? I bet she sat on the back seat!

I always did—I always cause trouble. Back seats made more fun on the bus, and sometimes in Parliament too, I’ve found. Anyway, we went down to see Kāingaroa Forest, and it looked like it was this fantastic forest, except that it wasn’t because it had been planted during the Great Depression, and once employment came on, once the Second World War came on, there weren’t people there to prune it. So we ended up with this massive forest that was only ever good for pulp and paper—for newsprint. And that’s the problem: you can’t just plant trees and think it’s all going to happen. They have to be pruned, they have to be looked after, and one of the things with this is that it doesn’t actually require any of that.

We’ve got 70 percent of our forests currently owned by foreign interests. This Government that’s so against foreign investment is happy for the rest of them to go to foreign investment and get emissions trading scheme credits. There’s something very strange going on here, and I think it’s something that this Parliament should be asking more about. Why forestry? Why not sorghum? Why not blueberries? Why forestry? And when I look at the exemptions and the rules, it’s very hard for this to be operational.

Thank you very much, Mr Chair. I’ve just got to say I’ve got to congratulate my colleague here before. There are not many people who can see into the future and know what’s going to go on. When Mr Bennett was talking about the future and saying to mark his words, I think we should mark his words.

If you’re talking about people really doing work, it’s a little bit disappointing. On this side of the Chamber we have people actively engaging, seeking the call, wanting to talk to the matter, because this is an important bill. But the most disappointing thing—I’ve got to acknowledge the Minister in the chair, Damien O’Connor. I’ve got to congratulate him because he is doing a good job, standing and responding to well-asked questions about this bill. We need to understand more about this bill, so I do congratulate him. But the disappointing thing, as I look across the other side of the room, is people have buried their heads, and not one of them is taking the call other than to close this debate down. I just invite them all to stand up, stand up for what they want to vote for, and talk to the bill, especially Part 3—

CHAIRPERSON (Adrian Rurawhe): And I invite the member to speak to the bill.

I am. I am, Mr Chair.

CHAIRPERSON (Adrian Rurawhe): No—no, you are not.

Especially anything starting after page 26 of the bill, for you people across the other side.

Just to a matter I do want to talk about, which is enforcement, I particularly want to turn my mind to the issue of new sections 51A, 51B, and 51C, inserted by clause 31. One of the issues we had about enforcement is that when we were hearing from the officials, we asked them a simple question: how many consents do the Overseas Investment Office process a year? The number was about 150, I seem to recall—150. So, in the context of the Overseas Investment Office and with this new bill coming through, we, naturally, asked the next question. We were informed that they couldn’t tell for sure, and I understand that entirely, but I seem to recall—and I’m looking at Mr Carter—I believe the answer they said is an approximate figure—

I’m afraid I have to interrupt the member. It has come time for me to report progress.

House resumed.

Progress reported.

Report adopted.

The House adjourned at 5.55 p.m.