Overseas Investment Amendment Bill (No 3)

I, firstly, present a legislative statement on the Overseas Investment Amendment Bill (No 3).

ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House. It can be found on the Parliament website.

Thank you, Madam Speaker. I move, That the Overseas Investment Amendment Bill (No 3) be now read a second time.

Can I begin by thanking the Finance and Expenditure Committee for their work on this bill and their work on the Overseas Investment (Urgent Measures) Amendment Act that was passed under urgency last year as part of our response to COVID. The deliberations of the committee covered both the urgent bill and the No. 3 investment bill that we now debated debating, and I’m sure that the bill as reported back is better thanks to the work. Can I also thank the 46 submitters who took time to consider what is quite a complex set of measures. Individual law firms and businesses all made submissions to the committee, and I’m sure those submissions assisted the committee in their deliberations.

These obviously have been unprecedented times, and although the economic out-turn from the COVID pandemic has, in the case of New Zealand, been far better than was initially projected, our concerns at the time were that we were going to have such a severe contraction and that the recession would cause a decline in the value of a lot of businesses. We were worried that some businesses, particularly in the sectors that were most affected by COVID, or were predicted to be most affected by COVID, would result in insolvencies. There was a risk, we believed—as did Australia and various other countries—that some of those companies might be in a such a parlous position that, notwithstanding credit support from central government, they might have thought themselves having no choice but to sell the residual assets and the businesses in a parlous state. As a consequence, we brought forward legislation which changed the threshold for Government to take action, to block some of those sales to overseas parties and brought it down to a nil threshold.

As it happens, we’ve rarely exercised those discretions to use a national interest test, kicking in at very low levels, and the system that’s been devised and applied by Government has proven to be a very efficient system, which has not caused undue costs to applicants. I think most applicants have been impressed with the speed with which those call-in processes have been conducted.

Now, we’re soon to take decisions as to whether we carry forward those interim measures, but when those interim measures do end, we need a background system of overseas investment rules that fit for modern times. Now, I think everyone—or just about everyone—in this House agrees that productive foreign investment will continue to play an important role in our economy. It’s obviously important that our businesses can access foreign investment that they need to thrive. Often, the spring is not just financial capital but international connections, which enable those businesses to succeed internationally. However, successive Governments, and indeed Governments in most countries, think that there can be risks from foreign investment that need to be managed. This bill seeks to do this by being more clear as to what the rules are, particularly in respect of farmland, and also deregulates some areas of foreign direct investment that have been overregulated and have been unnecessarily rule-bound.

In respect of changes that we’ve already made in the prior three years, we made changes to make it harder to purchase existing homes. Overseas buyers now find it hard to buy existing New Zealand homes, and that was a matter that was of considerable concern to New Zealanders. And most New Zealanders rejoice in the fact that we have made that tougher. There was a prior problem that we’ve largely closed down. As with some of the recent changes that we’ve been making to tax rules, we were careful to exempt scale new builds. Foreign investment in apartment buildings, for example, or large subdivisions with new housing being built is enabled. So a lot of those houses are eventually going to be sold to New Zealanders or leased to New Zealanders.

This bill that we’re now considering largely replicates what was already the case for farmland, by way of regulations under the Overseas Investment Act, but it lifts those provisions from regulation to the primary legislation so that, if a future Government wants to loosen up foreign direct investment in rural land, that the majority of New Zealanders and the majority of farmers oppose, then that future Government would have to come to this Parliament to change the law rather than change it by executive regulation without recourse to Parliament. And, given the importance that New Zealanders attach to landownership, and given that most of our exports come from the primary sector and the control of our large co-ops that are vertically integrated internationally is held by virtue of ownership of farms and the production which goes from the farms through the co-ops, we in the Labour Party think that it is appropriate to have those rules as to foreign ownership of land set out in the primary statute.

One of the changes that’s been made by the select committee is to make it clear that those restrictions on foreign ownership of rural land don’t apply where the land is no longer really primarily suitable for use as rural productive land but is more suited to development for housing purposes or commercial purposes, perhaps at the margins of a city. And because we’re not wanting to frustrate investment in housing, for example, or other commercial endeavours, the select committee recommended, and we’ve accepted their recommendation, that that not be subject to the stricter rules relating to foreign ownership in rural land.

Another change that is made is to require the advertisement for the sale of rural land to be made before the land is sold to an overseas buyer, rather than after. I think most members were surprised to learn that you could comply with the laws by, effectively, negotiating a sale to someone overseas, conditional on an advertisement not working, and then advertise after the fact.

In respect of some of the areas that are being loosened up, we are enabling changes in shareholding of overseas companies without requiring an application to the Overseas Investment Office if it’s a minor change in percentage and not an effective change in control or further change in control. We’re also excluding a number of other technical investments.

We’re making it clear that some of the provisions that currently require overseas approval under the national interest test, involving sovereign wealth funds, should not be screened so long as it really is an independent sovereign wealth fund of the type described in the legislation. We’re excluding short-term leases. We’re saying that, if you’ve previously proved your character to the Overseas Investment Office and you want to make another investment, you don’t need to once again prove your character to the Overseas Investment Office. That can be proven from your earlier application.

So these mechanisms will actually reduce compliance costs. The national interest test, which was introduced through the emergency legislation, is maintained. It was a gap in our legislation, and I expect that, had the National Government been re-elected, they would have moved to introduce a national interest test in respect of security issues which were raised by security agencies with the incoming Government, and I think had been raised with the National Government as they left office.

With that, I think that we have a better foreign investment regime after this by making it clear we’re open for business, making it harder to buy rural land, or elevating those tests into the primary legislation but also removing some of the niggly provisions that weren’t necessary.

The question is that the motion be agreed to.

Madam Speaker, thank you very much. I start where the Hon David Parker left off, where he says this bill reduces compliance costs, and that will be a welcome thing. But we won’t hear it that often in this House from this Government, because this is one of the few pieces of legislation that comes close to doing that compared to all the others parts of red tape and bureaucracy and compliance that has been applied across the board on the business sector in New Zealand on households, mums and dads, and the costs that come with that.

Minister Parker is correct: New Zealand needs to be open to do business and attract foreign direct investment. It is always important that the Government look to where it can be directed most productively. But, in so doing, what is just as important for those we seek to attract, to bring to our economy, to invest, to grow the economy, to partner, to create jobs—because we have to remember there are very few paths of economy that haven’t had foreign direct investment brought into them and therefore have benefited as a result of that—most importantly, is for these investors to have some certainty. Often a no can be as good as yes if it comes quickly enough, but in this case, actually, a very clear process that runs through quickly that they have sight of and can deliver an outcome.

So there are parts of this bill that do that, but I have to say that in the 3½ years since Labour first came to office, they have done more than tinkered with the Overseas Investment Act; they, actually, at times, have driven ideology through it, without it directly being able to demonstrate that there was a need or a real benefit. And that is why often we’ve seen them come back and have another go and have to correct something or fix it. I’d like to stand here and say they were well intentioned, but I am not sure that is necessarily the case.

In particular in this legislation, there are a couple of things that I think are a very good idea, and I’m surprised that they have to be fixed as opposed to that this Government shouldn’t have changed them to start with. And that is in two areas. If somebody has been deemed to be fit to invest in New Zealand and they have invested, if they want to incrementally increase that, previously, that investment, they’ve had to go back and seek additional clearance. And, of course, if nothing has changed, all that is is dead time and it means the investment comes more slowly, its investment in the economy takes longer to show benefit, and the jobs that foreign direct investment create are further away—if, indeed, they get permission. Well, of course, that has been rectified here in this legislation, which is important.

The other one is removal of the screening requirements for the non-resident leases up to 10 years. In Opposition, the Labour Party made a great deal, a song and dance, about the harm that foreigners do to New Zealand. They would, from time to time, qualify that in a particular area, but generally they gave the voting public the view that, actually, foreigners are not good when they come to invest here.

Ultimately, if we look at the changes the Minister spoke about around farmland and so on: well, actually, if it’s not productive land, it’s going to be used for something else, then if it is of benefit to the economy, then the decision-making process should be very quick; it doesn’t need to take a long time.

But in the case of non-resident leases, the difference between what Labour said 3½ years ago around the changes they wanted to make to foreign direct investment, and this, is that you can’t take the land away with you—full stop—and it would be even harder if they could make the case that you could if it was leased. So, in this case, for there to be a lease that is entered into, the owner of the land is a New Zealander, or could well be somebody from overseas that has been given permission to buy and own that land, irrespective of where the person comes from that wants to take up a lease, they have the ability to do so, and I’m glad that’s been recognised here in this legislation.

There are many other things this Government changed—or need to be changed around foreign direct investment, to give certainty so that investment flows to New Zealand appropriately and New Zealanders can benefit from it. I would say to Minister Parker that, whilst parts of this legislation are a good start, there are many other areas where changes are needed that are not being brought in this legislation, which is a shame. I dare say that we will be back before the House with more legislative changes proposed by this Government around foreign direct investment.

As an example, the changes around the leases. If there is enough noise, Mr Parker will want to come back and change that. The problem with that is it creates uncertainty. Whenever there is uncertainty or delay, people who want to make an investment can’t price or factor in that delay, and so guess what! They will go somewhere else. There will be some in New Zealand, there will be some in this House, there will be many in the Labour Party that would say that’s a good thing—it’s not a bad thing. But, actually, as far as growing the economy and creating jobs, we are a small economy. We do need to partner with the rest of the world. There are many, many, many examples of where foreign direct investment has benefited New Zealanders directly.

We are supporting this legislation, but we think there are missed opportunities in it. Thank you, Madam Speaker.

Thank you, Madam Speaker, and it’s good to hear that the Opposition will be supporting this bill, and for good reason, because as it went through committee we could see it is a bill which really does try to make it easier to make high-quality investments in New Zealand. As the Minister said, there were a number of submitters—and submitters who gave really high-quality submissions, who had taken a lot of time and thought very carefully about how to improve this overseas investment system. Whilst the concept of encouraging high-quality investment that’s good for New Zealand and is consistent with our security is simple to say, it became very clear in committee that when you think about it, and when you are actually trying to implement that policy, it becomes very difficult because even the concept of exactly who is an overseas person is by no means straightforward when you’ve got large companies with shifting ownership. And that’s certainly one thing we had to look at: there are companies listed on the New Zealand Stock Exchange whose ownership shifts on a daily and even hourly basis. So those kinds of things had to be looked at and also the assets we are protecting.

Obviously, we’ve just heard how important land is, but we really did have to dig a bit deeper, so to speak, in respect of that land and identify why we were protecting particular land. Obviously, farmland’s important but it was a really useful discussion—and the Opposition contributed in a meaningful way to this discussion—to look at what was zoned rural land but was on urban fringe, and the fact that, in many cases, whilst you might have stock on the land or some kind of crop it was really just being held there. It wasn’t being used to its maximum economic potential because it was really development land and, in fact, foreign investment in that land may well be very useful, and so in committee that was something that absolutely we looked at.

But in respect of farmland it is really important to recognise that we have in New Zealand some of the best, most efficient farmers and farming systems, and so it’s a high threshold to show that the sale of farmland to an overseas investor is going to bring greater benefits. An overseas investor who’s seeking to purchase New Zealand farmland, essentially, has to show that they can bring technology or jobs or something which can’t be obtained in New Zealand—so that’s a high threshold. Also, of course, there was a lot of discussion around the need to publicly advertise that farmland because historically the deal would be jacked up and any notification or advertising would be an after-the-event matter and really there would be no fair opportunity. You know, along with the kind of strategic interests of New Zealand farmland, there’s also a sense that New Zealanders—as with houses—should own New Zealand farms. They should be given the first opportunity to own New Zealand farms. So that was kind of one of those underpinning values as well. So that was a really important aspect.

The other thing—well, a number of other things came up, of course, but one of the important ones was just the benefit to New Zealand test. And there was some very useful—and the Greens contributed significantly to the discussion around the benefit to New Zealand test and whether it was a balancing of negatives and positives or whether it was simply showing that once you cross the threshold of qualifying as an investor to purchase something in New Zealand you could simply show that additional benefit.

I want to just recognise the robust discussion that went on in committee there. I really want to recognise the sense of the position that, ultimately, wasn’t adopted and I want to say why it wasn’t adopted, because I think that’s important. The idea of looking at, say, environmental impacts against the benefit to New Zealand—the reason that balancing exercise wasn’t adopted was because there’s a whole area of law devoted to balancing environmental impacts, for example. And that, of course, is the Resource Management Act and all of the associated mechanisms along there. So rather than kind of second guessing what the environmental impacts might be through a robust resource management process, this looks at benefit to New Zealand; it doesn’t contextualise it across all of the possible overs and unders, if you like. It just says, “Let’s look at the benefits. And if that’s the case, then the acquisition is permitted.” But of course, all of New Zealand law, whether it be planning law, whether it be employment law, and so on and so forth, will continue to apply. I’ve got to say that was a really useful discussion but one which, ultimately, fell on the side of that, essentially, single line test.

So, look, it was a very good and useful select committee process, but I do want to just recognise that it is a technical bill and one that committee members and submitters and officials worked hard to make sure we got our head around all of those complexities. I think we’ve done a pretty good job with it and of course, this is now a bill which becomes really the last piece in the puzzle of making sure our overseas investment framework is fit for the future. I commend it to the House.

Thank you, Madam Speaker. A pleasure to be talking on the Overseas Investment Amendment Bill (No 3). It feels like we’re coming to the end of the road—we’ve been talking about overseas investment for a long period of time, since the start of COVID back in March last year, and a lot of water has passed under the bridge since then.

I think it’s worthwhile just to remind ourselves why we’re so interested in this, and I think the main thing we’ve got to recognise is where do jobs come from in New Zealand, and where do people actually derive a living. That is from businesses getting out there, and particularly their owners getting out there and investing money in creating new businesses and taking the risk, and taking on new people to create those jobs. I think we need to look at this in that context of how we assist businesses to take on that risk and to take up that challenge.

I think if you look at New Zealand in terms of its investment flows, we’ve always relied on overseas investment. Some people say that was unfortunate, but it’s been a fact of life since, really, since Pākehā days when New Zealand has always relied on overseas investment—particularly originally from Britain, but now from many sources around the world. That is not going to change.

So the whole purpose of what we’re trying to do with the overseas investment bills, and this is the second of the two that we’ve been debating over the last months, is about putting in place an appropriate framework to ensure that the investment that we get and need from overseas is the right type of investment and goes into the right sort of areas, but is also subject to appropriate controls. Of course, we have said we’re going to support this bill.

I think the first thing I’d just like to say on this issue is really one around the key parts of this. And I think, as the Minister spoke initially about when he did his introduction, there are differing layers around this, there’s obviously things around water—and bottled water is one example of that—but I think the most crucial aspect relates to the land. When the bill was first introduced, we thought it was going to place unnecessary restrictions on unproductive farmland. And it’s good that, through the process of the select committee, we’ve ended up with a situation where there are, and will be, exemptions for farmland where it is deemed to be unproductive. Because we think there’s many examples—and I’ve been involved in transactions where deals have not occurred simply because of the worry about issues of sensitive land, which may actually be neighbouring to a business where it’s got its operations located, such as a watercourse or whatever, or just some ordinary issues that actually make the investment much more problematical and brings about a degree of risk. People do not like risk, particularly when you’re investing money.

So I think the issue round farmland is very important. There’s still one or two issues in the bill that we still have a little bit of concern about in terms of what they mean, particularly around better recognition of Māori cultural values, taking into account wāhi tūpuna, and all that needs to be defined in time, but hopefully through pragmatic regulations and also with better clarity around that, those types of issues will be in a way that people understand, and particularly overseas investors understand.

The one area that we did have a major point of difference and we think is an absolute loss of opportunity is one that relates to forestry land. As many of you will know, overseas investors are able to purchase up to 999 hectares—that’s 2,200 acres—of land for forestry rights, and the issue is whether in fact that is land that is intended to be planted in forestry or whether in fact it actually has a forest. But these are pieces of legislation that were actually forced through under the previous term of Government, particularly by New Zealand First, who were very keen to see a permissive regime for overseas investors to invest in forestry land in New Zealand, and, to be honest, at the time, we were very, very concerned about it. I do note that Federated Farmers have made some very specific calls about this. They note—and I quote here—“We have also become increasingly concerned about [the conversion] of productive land to forestry and … overseas investment regime’s contribution to this. … The significantly more relaxed overseas investment regime for forestry is just one of the policy drivers for forestry conversions.”

I think when you look in the context of carbon credits, particularly as they’ve increased in value quite rapidly over the past few months, the incentive for not only New Zealand investors but, more importantly, for international investors to buy very good quality farmland and to convert that into forest is a significant issue. Our view was that this was the opportunity to deal with that. We are concerned about the level of conversion. We would prefer that conversion occurs in areas where, basically, there’s unproductive land, but where we see conversion of wonderful farmland into forest, we have a great deal of concern. I think it’s worthwhile reminding ourselves that forestry assets in New Zealand—I think some people will be staggered to learn—the latest assessment I remember seeing was that 72 percent, i.e., roughly three-quarters of all forests in New Zealand, are owned by foreigners. I think that rule that brought it in, the 999 hectare rule, is something that should’ve been addressed in this bill, and that is one of our principal concerns with this bill.

But, in the main, the other aspects about streamlining how investments are approved, we’re in the main pretty comfortable with those, and on that basis, we will support the bill. But I can say to you that when we get the time, we will be looking at that forestry issue with some scrutiny, because we don’t believe that the settings we’ve got in place right now are appropriate to support our agricultural farmers and actually are going to lead to perverse outcomes over time and will increasingly be as carbon prices increase. Thank you very much.

Fa‘afetai tele lava. I stand to take a call on the Overseas Investment Bill (No 3).

I’ve just returned from a family service for one of Porirua’s finest, with a family service being a prelude to a funeral, for Tauiliili Tumuafa‘aetemanu Tuvale Uluilelata, or Joe, as many of us in Porirua knew him. Tonight, hundreds of people gathered at the EFKS Ketesse Manu Church, or the Samoan Congregational Church, on Spicer Hill to remember a good, kind, and humble man. Joe was a taxi driver in Porirua for Porirua Taxis for 40 years, and he was a father figure to many, but, most importantly, a husband to Sera, a father to Eddie, Philippa, Magele, and papa to many, including his great-grandchild, Lenny. Manuia lou malaga, Joe.

Now, some may ask: how does this story of a humble taxi driver called Joe link to the Overseas Investment Act and bill? To me, it’s simple. Joe chose to bring up his family here in New Zealand, the land of milk and honey, a place where children can receive quality education, experience the stable political system, and one could get ahead with support or hard work. The purpose of the Overseas Investment Act recognises that we are, in fact, the land of milk and honey, where we can grow, cultivate, and harvest our food, where our land is productive and our fisheries, forestry, and natural and physical resources are a rare privilege that is worthy of protection. It seeks to protect the privilege we have here in New Zealand.

So this bill, as the Minister has said, is the final stage in the Government’s reform. Hence the title—it’s “(No 3)”. This bill endeavours to balance the protection of our important assets while still being attractive to productive foreign investment.

I would like to focus my contribution on two specific protections within this bill that the committee took a lot of time scrutinising, and I’d like to take the time to thank officials from Treasury and the Overseas Investment Office for their time on the bill. So the first one I want to focus on is the information for tax purposes, having come from a tax background. So clause 16, which adds new section 38A, proposes a section to make regulations to impose requirements where an overseas person who makes or applies to make an investment in sensitive New Zealand assets must provide information to the Commissioner of Inland Revenue. Information that the commissioner considers necessary or relevant for the administration or enforcement of an inland revenue Act or, two, for the administration or enforcement of any matter connected with the lawfulness of the powers of the commissioner. What that information is, by whom, etc., etc., will be set out in regulations, so that particular clause gives an Order in Council - making power.

Now, during the select committee process, there were some concerns raised around privacy and whether this section removes the right to privacy for an individual or an entity who’s an overseas investor. So we sought the advice from the Privacy Commissioner, who confirmed officials’ advice for us that clause 16 was actually consistent with the Privacy Act because it established a lawful purpose, and that, for the regulator, was the Overseas Investment Office to collect tax information to support compliance matters and then share that information with IRD. If we want foreign investors to invest in New Zealand, then surely we want them also to be compliant with the tax laws that apply.

In the second part of my contribution, I just wanted to focus briefly on the national interest test, especially in relation to the call-in powers. So the urgent measures Act that came in last year added a national security and public order call-in power to overseas investments. The call-in power enables the Government to screen overseas investments in significant, strategically important businesses, and it also allows that the Government can impose conditions or, in extreme cases, actually, block investments that pose a significant national security or that pose a public order risk.

The call-in powers are actually due to come in once the temporary emergency notification regime, which is in the urgent measures Act, once that’s repealed and once this bill has come into force, and some submitters during the select committee stage raised their concerns about the scope of the call-in power. They advised that it was too broad and, therefore, it would inadvertently capture transactions which were never intended to be covered by the provisions. We heard from submitters that this would include routine purchases that are retail in nature. So the committee gave it great thought and decided that what we did was we would recommend amending the bill to limit the scope of the call-in power. This power would then only apply to transactions that actually pose a risk to New Zealand’s national security, with two specific exemptions.

So the committee spent a lot of time with this. We’d like to thank the number of submitters that came to us and who provided really in-depth and considered submissions. As the Minister said, New Zealand continues to be open for business. The purpose of this bill, combined with all the other changes that the Government has put through, is to improve New Zealand’s economic settings and to achieve a balance between welcoming investment and the need to protect our most sensitive assets. That means it will set us up to be able to make the most of the coming decades of economic change and transformation and, most importantly, to ensure we protect our land of milk and honey. So I commend this bill to the House.

Thank you, Madam Speaker. I’m pleased to take a call on behalf of the Green Party on the Overseas Investment Amendment Bill (No 3). Really, as the chair of the Finance and Expenditure Committee said this is a technical bill and it’s quite complicated. So I really acknowledge the changes to Standing Orders and the legislative statement, which is now provided by the Minister, because that and the select committee’s report is a very good summary of the content of the bill and the changes.

The Green Party does support the bill but has a few issues with it. Like others, we really acknowledge the high quality of the submissions that came before the select committee for their very thoughtful analysis of the current regime, some of the issues with that, and the very practical suggestions for changes, the work that was done by Treasury officials, officials from the Overseas Investment Office, and the select committee staff for their contribution. I acknowledge the work of Dr Duncan Webb as chair in overseeing some quite, as he said, robust discussions.

So one of the key things that the Green Party really strongly supports is the stronger protection for farmland. Because one of the first things that the Labour-led Government did last term was to change the ministerial directive letter to the Overseas Investment Office around the benefit test for farmland to better protect that, better recognise that an overseas persons seeking to buy farmland in New Zealand is a privilege. What this bill does is put into law that more stringent test around the benefit to New Zealand. It expands the Minister’s discretion somewhat, and, as Minister Parker said, it really entrenches that rather than just having it in a letter to the agencies.

We’re also really supportive of the greater recognition of Māori cultural values when that’s being considered, in terms of things like wāhi tapu, when there is an application to purchase farm land. The bill makes a number of significant changes around the whole application of the national interest test because with the urgent measures bill which came before the House previously, that was done at speed, and there was a lot of feedback that that was too expansive in the way it operated. And therefore, this is a much, in the bill, more proportionate in terms of the sensitivity of the land and the nature of the overseas investment.

We’re really supportive too of the provisions around water bottling, increased consideration of sustainability issues and water quality issues, when there is a proposed investment on sensitive land for bulk water extraction or water bottling.

Another significant improvement is around the good character test, which in the existing law is often too diffuse in the way it’s applied. What the bill does, it goes to factors like criminal offences, civil offences, whether there’s been any issue of tax evasion, and the bill also includes enhanced measures around tax disclosures by overseas persons when they are seeking to acquire significant business assets, which can be a really useful fact for decision makers to consider.

One of the issues that we have with the bill, and agree with—don’t often agree with Andrew Bayly. But the concerns around forestry—it is far too permissive a regime for overseas investors seeking to acquire land for forestry that resulted, as Andrew Bayly noted, from changes which New Zealand First promoted last term, and we are seeing land going to forestry with a different and much easier test than applies to farmland, with a lack of that need to really prove that there are benefits to New Zealand.

So there is a real opportunity and, perhaps, we will see that in Supplementary Order Papers in the committee stages, to change the provisions around that so that forestry is on a level playing field with other applications for purchase of farmland. Not the preferential position—the primrose path—that currently applies.

One of the areas that the Green Party disagreed with the majority on select committee was the issue around what constitutes productive farmland. I’m reminded of the issue of Foulden Maar in Otago, an internationally important fossil site, which an overseas company, Plaman Resources, sought to purchase to mine diatomite. Now, that was not productive farmland, it wasn’t returning much, it was a very dry—I think it was formerly a sheep farm—but there was a huge opposition by the local community to this land being potentially sold offshore for diatomite mining because of the significance of the fossil sites there, both internationally and because of the company, for which geological epoch it was—but they were internationally important. So that wouldn’t be considered productive farmland. So the narrowing of the test around productive farmland, we think, could potentially lead to rural land that is important for other values not being given the weight that productive farmland is when the Minister comes to consider it.

The other issue is around the way in which the benefit to New Zealand test operates. The fact that the changes that the select committee is recommending mean that the Minister is not able to take into account negative impacts, normally when a cost-benefit analysis is done, you look at the positive impacts and the detrimental ones. Yes, there was a High Court decision, but the way in which the law is evolving here, in the Green Party view, is contrary to common sense and focuses largely on a very narrow definition of benefits, which means that decision makers—Ministers—cannot weigh the negative and detrimental impacts, which we don’t think is commonsensical. And it’s not just Resource Management Act (RMA) issues here, but being able to look and make an overall broad judgment, which is the way decisions have been made in other areas of the law, such as the RMA, but is being excluded from happening in terms of assessing whether an application to purchase farmland is to the benefit of New Zealand. You should be able to weigh the impacts of that as well as the economic benefits. So, overall, support the bill but still have some outstanding concerns with it.

The House adjourned at 10.01 p.m.