Overseas Investment (Urgent Measures) Amendment Bill

I just want to take a brief call on this because it gets indirectly back to a topic we were talking about a little earlier. This part of the bill amends a number of other Acts, including the Fisheries Act, and it does it to enable the Fisheries Act and the way it manages quota to be included in this bill, and so quota then becomes part of this bill.

But it relates, interestingly, to the issue, again, that Andrew Bayly raised about potatoes, because one of the really interesting things for New Zealand, I think, in the course of this bill is that countries around the world will be now, more than ever, looking at food security and the fact that they need to secure food for themselves. A number of our very close trading partners are far from self-sufficient in food, so you’d imagine that—quite apart from the Fisheries Act and the fact that the fishing quota’s included in it—all sorts of food industries might well be of interest to the international market as a result of what’s going on in the world at the moment. I imagine also though that probably those industries aren’t discounted to the extent that some of the other businesses and enterprises that we’re particularly concerned about in this bill may be. But, none the less, it’s an important issue for us, and I think I’m just really using Part 2 to raise that issue, because it keeps it separate from all the other issues that we dealt with in Part 1, and I think it’s a perfectly relevant issue to raise here.

So fishing quota, of course, is hugely important to New Zealand as well, and some of those companies that own that fishing quota—quite apart from the Māori fishing quota—are very large companies and will undoubtedly have international shareholding in them. So that’s another interesting issue that this bill raises. I think earlier in the debate we had some talk about Silver Fern Farms, which, of course, has been the subject of quite a lot of discussion in this House and also is a major New Zealand food company which has large overseas shareholding. So, really, the only point I want to raise in Part 2 was just the issue around the food security, the fact that the Fisheries Act is being amended to accommodate the fishing quota and ensure that the fishing quota is included as part of this bill. But that’s my lot, Mr Chair.

Thank you very much. Part 2 deals with the issue of disclosure, and again this was one of the most critical areas that the committee traversed. The issue related to the ability of certain entities to share and transfer information that was confidential and sensitive amongst agencies. And, of course, there was a strong reliance on that being determined; in the list the name of the agency has been determined by a regulation-making power, as I’ve talked about before.

But the one change that we were successful in making is that we—and when I say “we”, the National Party and, I believe, ACT—were very concerned about the absolute power to, basically, be able to determine who in which entities could receive sensitive information or provide sensitive information on applicants. And the one change we were successful making was relating to a requirement that when setting the names of new agencies on to the list, which is going to be part of the bill, or Act when it comes into force, there was a requirement that the Privacy Commissioner be consulted on those arrangements, because we just think that’s a fundamental right for Government to be held to account for making sure that information, particularly where it’s highly sensitive, is protected and managed in an appropriate way. That part is addressed in clause 65, inserting new clause 39B in Schedule 7 of the Tax Administration Act 1994.

One of the one of the most dangerous pieces of wording was that, and I quote here, “if the regulator has reasonable grounds”—this is in relation to making a disclosure—“to believe that … disclosure of that information is necessary or desirable for all of the following purposes:”. And it talks about “(a) enabling the regulator to consider whether an investor meets the … test, … (b) managing national security, … (c) and any [other] purpose”. That, of course is that catch-all phrase at the end. But the one that was of particular concern to us was “or desirable” aspects. That is a very loose constraint on agencies, on people involved in the handling of sensitive information, so that was struck out. And that is one of the changes in the bill as it’s going through, thanks largely to the efforts of the Opposition in particular, to make sure that we are reaching an adequate and proper place around the disclosure regime in this bill.

So I’d be interested whether the Minister for Trade and Export Growth would like to comment on that, about the information disclosure, because in many cases, these transactions are highly sensitive. They are acquiring businesses. In many cases, there is a competitive process in place. And, once other competitors who may be interested in the same asset are aware of what’s going on, it’s not uncommon for that knowledge to be used to disrupt that transaction that’s been agreed. And that’s why it’s very, very important that these arrangements are tight, because that can cost people a lot of money just through people being careless with the use of information.

So I just want to receive the Minister’s response to this very, very important point and whether he believes that under the bill, the way it’s set up, the way it will be managed in the future, which he will have responsibility for, there will be no transgressions of the passage of sensitive information between agencies in a manner that is not proper.

I refer to Andrew Bayly’s question about the disclosure of information. I thank the Finance and Expenditure Committee for its work on that point, and for the Privacy Commissioner’s input into it also, and agree that the wording as came back from select committee, which deletes the words “or desirable” as being too loose a discretion for the passing on of information. The Government agrees with that change, and we will be voting for it. So we thank you for that improvement to the bill.

I didn’t really come down to the Chamber for the benefit of Mr McKelvie expecting to discuss fish and chips, but it seems that both of those have come up in the debate. I’m not sure how the great Irish potato famine is of great relevance to this bill, but in respect of his questions as to fisheries, the effect of these changes is to align the provisions in the Fisheries Act with the overseas investment legislation.

If we ignore the short-term change to thresholds in going forward, the investor test and the benefit test is varied by the amendments, but that will still be the fundamental test that is normally applied in respect of fishing quota transactions, but where there is a fishing transaction that is a large one that is over $100 million, in addition to the investor and benefit test, there will be the national interest discretion, should it be elevated to the senior Minister in respect of the national interest test process. If that was to happen, then there is a broader discretion that goes beyond the investor test and the benefit test that the relevant Minister can exercise in the national interest. Again, that, as I’ve previously explained, is taken from the Australian legislation, where they have, in respect of large transactions, a broad national interest discretion that is cast widely but exercised rarely.

Part 2 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 507 in the name of the Hon David Parker to the Schedule be agreed to.

Amendments agreed to.

Schedule as amended agreed to.

Clauses 1 and 2