Overseas Investment (Forestry) Amendment Bill

I present a legislative statement on the Overseas Investment (Forestry) Amendment Bill.

💬 DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Thank you, Mr Speaker. I move, That the Overseas Investment (Forestry) Amendment Bill be now read a third time.

The Government recognises that overseas investment supports a strong forestry sector, and we continue to welcome it. We also recognise that it is a privilege for overseas investors to own New Zealand land. We, therefore, strike a careful balance: the New Zealand forestry sector must remain an attractive home for foreign capital whilst also having a system that provides oversight to ensure that investments benefit New Zealand.

The special forestry test was introduced in 2018 to support investment into production forestry by creating a streamlined pathway whilst we also brought forest registration rights within the ambit of the overseas investment regime prior to the inception of the Comprehensive and Progressive Trans-Pacific Partnership agreement, which closed down the ability of Governments to add new areas of screening. At the time, the Overseas Investment Act (OIA) was itself highly complex—in fact, unnecessarily so. Since then, things have changed: the carbon price has more than tripled, to upwards of $70—this is quite attractive to forests investors—and also the consent pathways generally under the OIA have been simplified, with some of that complexity and some of the inconsistent criteria have been removed.

Since then, we’ve also heard concerns from amongst rural communities concerned about productive farmland being converted into forestry. So the streamlined process for forestry conversions, in the view of the Government, is no longer warranted. That’s why this bill is in the House. It ensures that overseas investors wishing to convert land into production forestry must demonstrate benefits to New Zealand. The current test operates, essentially, as a checklist and doesn’t give decision makers much discretion to determine the appropriateness of the investment and whether it benefits New Zealand. We’re also making a range of minor and technical changes that will provide investors with clarity about the rules.

Can I thank the submitters for their valuable submissions, which have led to additional amendments to the bill, ensuring the bill best reflects the Government’s policy intent. Can I reiterate my thanks to the Finance and Expenditure Committee for their efficient deliberation on the bill, and I’m pleased that the bill is attracting broad support in the House. That said, some people would say that we should have gone further and made rules more restrictive. I would like to reassure anyone who shares this concern that the “benefit to New Zealand” test has sufficient flexibility to manage proposed investments in land for forestry. The “benefit for New Zealand” test requires investors to show the benefit of their investment is proportionate to the sensitivity of the land. Proportionality, in this sense, means that overseas investment in our most sensitive land must demonstrate a higher degree of benefit than for land that is not so sensitive. This goes beyond economic productivity, applying to land that’s not just productive farmland but also land of high conservation values. The Government, outside of this work, is also looking at emissions trading scheme settings and Resource Management Act rules.

To conclude, production forestry is among New Zealand’s four largest export earners. It’s also a critical input for wood processing and manufacturing and, of course, is a key contributor to realising our climate goals. That said, we understand that oversight of overseas investment is needed to ensure that investments do bring benefits to New Zealand, which is why this bill requires overseas investors to demonstrate that forestry conversions benefit New Zealand. In doing so, it will support our efforts to have the right tree in the right place. I commend the bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. It’s a pleasure to be talking on the Overseas Investment (Forestry) Amendment Bill, third reading. I just want to say, at the outset, that National does support this bill. We have two overriding principles: the first one is that we do support the forestry industry, and the second one is that we do welcome foreign investment. However, this bill is about overturning a change that was brought in under this Government, back in 2018, when the Rt Hon Winston Peters proposed quite a significant change to the rules which allowed foreign investors to come into New Zealand and buy up to 1,000 hectares of forestry land, and to be able to do that with very little oversight from the Overseas Investment Office.

At the time, there was widespread concern. I sat on the committee at the time, and there was a number of Opposition members and parties who were opposed to the change of making it much easier for foreigners to come and buy New Zealand forests. It should be acknowledged that, at the time, we were informed that the ownership of New Zealand forests back in 2018 was approximately 72 percent owned by foreigners. I must admit, at the time when I heard that stat, I was very, very surprised at the level of foreign ownership of New Zealand forests. Obviously, the preference would, of course, be that we have New Zealand owners of forests, but we also acknowledge the contribution that foreigners make. Yet, contrary to all of the views that were expressed, the Labour Government and New Zealand First drove through these changes and did not take into account sufficiently the issues that were at hand at that point, and people knew what this was going to mean. It was pretty clear what was going to happen. Since then, I think, about 260,000 hectares has been converted into forestry in New Zealand. So we’ve sort of seen a revival from the Minister, and Minister Parker was just talking before. This is the Labour Government changing its mind now that it hasn’t got New Zealand First sitting alongside it.

We welcome these changes because we thought this was more appropriate—this arrangement that’s been put forward today. I think, if we were back in 2018, we would no doubt have supported these changes. The principal reason put forward by the Minister last night, during the committee of the whole House, was that it was an open country for forests without making some change back in 2018. So we went from, what the Minister described as, a situation where there was very little approval process around forestry registration to an extreme case where we allowed foreigners to come and buy up to 1,000 hectares of farmland and convert it to forests. We are concerned about making sure that we do have the right trees in the right place, as the Minister said in his concluding comments. It was interesting that the Hon Stuart Nash contributed to the debate last night and spoke about a farm in, I think, the Tukituki electorate, when he was a younger person, prior to entering politics, and he spoke about a beautiful farm where the farmer had planted unproductive parts of the land and planted those in forests, which was very good, and kept the productive parts and claimed that there was no decrease in the stock units on that property.

As I said last night, no one in this House would have any issue with that. Under the previous arrangement, I suspect that farm may no longer be a farm as it was then; it could quite possibly now be planted in trees—and, of course, the attendant issues that come with the loss of community, not just of people but also the wider impacts on schooling arrangements, transport arrangements; all that goes with it. So that is why we were very keen at that stage, in 2018, and why we are supporting this bill, because we think it’s about balance, making sure that we do end up with a viable, thriving forestry industry. But we want to make sure our agriculture and our productive lands are supported and have the opportunity to continue, because agriculture is by far the biggest component of our exports, and without it we would have been in trouble, particularly during the last 2½ years of the COVID crisis.

So this bill introduces a more beefed-up test if a foreigner is wishing to convert land to forestry. It’s a “benefit to New Zealand” test. We asked the Minister about it last night—about what that test involves; whether, in fact, it involved a counterfactual—but, essentially, what it means is that the foreign investor has to demonstrate that there are superior benefits from converting that to forest land. It’s closer to what a foreigner would have to go through if they were buying land for land purposes. It is certainly not the same level of scrutiny, but it’s certainly a much tougher level of scrutiny that foreigners have to go through.

I think the other thing is the issue around this target of one billion trees—a silly mantra that Shane Jones used to say in this House, about achieving one billion trees to be planted in New Zealand per annum, of which, of course, back then we were planting about 500,000 a year. So all this was his mantra about pushing this piece of legislation through, and I think hindsight has shown that it was poorly thought-through and resulted, in some cases, in inappropriate investment. None the less, I think where we are this afternoon is a good place. One of the big issues we have is that we want to make sure that foreign firms who do seek to convert farmland, who go through this process, get a proper showing by the Overseas Investment Office. We want to make sure that that processing is done in a timely manner, that they get a fair chance at it, because we don’t want to unnecessarily restrict people investing, but we want to make sure that there is a proper process and they’re not unduly held up.

So, on that note, I know many of my colleagues are going to talk to the bill, but we will be supporting the bill as we think, ultimately, it will lead to a better outcome, better balance between a thriving forestry industry and supporting our agricultural pastoral farms in New Zealand, which have played such a crucial part to New Zealand over our history and currently in terms of the extent of their exports. Thank you very much.

I rise to take a call on the Overseas Investment (Forestry) Amendment Bill at its third reading. I’d like to echo the sentiments of the Minister and thank officials for their work on the bill. I also thank the Minister for his support. Ultimately, all matters have been traversed in the various stages of this bill, and I just wanted to reaffirm why this Government is supporting this bill.

This Government wants to ensure that all overseas investment continues to benefit New Zealand. This means making sure we have the right forests in the right place. The proposed changes will help manage the increasing concerns of some New Zealanders over the negative impact of farmland to forestry conversions, particularly in relation to pastoral land and land that is otherwise important to local economies and communities.

This bill ensures that forestry conversions by overseas investors continue to bring more benefits to New Zealand. These investments will now be considered under the same rules as other investments in sensitive land, under the streamlined special forestry test. Again, this will channel overseas investment into the right forests in the right place for the right reasons. Therefore there is nothing more to add other than my support, and I commend this bill to the House.

Thank you, Mr Speaker. Now, I’m happy to take a call on this bill, because, actually, it is a long overdue step, bringing the requirements for overseas investors looking to invest in the forestry sector closer back into line with overseas investors who are looking to invest in other areas, such as our food and fibre sector—the amazing food and fibre sector that it is. It’s been interesting just listening to the contributions we’ve heard from the Government, who have put forward their views on why this is an important change to make, why we need to look at tightening up the rules around those investors. We support this piece of legislation. Interestingly, though, it was only four years ago that the very same Government, the Labour Party, were standing up and saying exactly why they needed to put this rule in in the first place. So here we are now, four years later, and the Government is arguing the complete opposite to what they argued just four years ago.

💬 Hon Scott Simpson: Flip-flop.

Flip-flopping all over the show, Mr Simpson—absolutely. And suddenly this is now the right place to be, and they’re trying to rush it through quite quickly without too much debate about that, hoping the public won’t realise that they have totally flip-flopped on their position.

Fortunately, we, I think, have been consistent throughout, and I’m confident the public will recognise this as well. We opposed the bill when the Government put it forward a few years ago, because when we think about overseas investment—and here we are, the Overseas Investment (Forestry) Amendment Bill third reading—foreign direct investment has an important role to play in New Zealand. We are a relatively small country. Access to capital can be challenging at times, and job creation, in particular the economic value that can be derived from that foreign direct investment, the community benefit from it as well, can be significant, and there are many great reasons why we should support that sort of contribution to New Zealand.

Unfortunately, what we saw, though, with the rules that were put in place by the Labour Party four years ago, was a significant skewing of the playing field, as it were. The level was significantly different in terms of the bureaucracy, the hoops you had to jump through if you were wanting to invest in forestry—a much easier and streamlined process compared to if you’re wanting to invest in the food and fibre sector; a much more cumbersome process. In my mind, that just shows how dangerous it is when you have a Government prepared to meddle in the markets like that. You get this negative or perverse impact as a result of Government interference in market processes. Ultimately, it has, in part, contributed to a significant shift in the values paid for farmland, and there are other factors around that, too, but we have seen, in many cases over the last couple of years, New Zealand farmers being outcompeted, food and fibre farmers being outcompeted from forestry interests for the same piece of land.

That’s a real concern, especially at a time of growing global food insecurity. There is a lot of concern around where our food is coming from. We have a very proud track record of producing top quality food and fibre products around New Zealand—some of the best of those coming from my electorate of the Waikato, of course. But at a time when we really need to be focusing on how we can contribute internationally, here we are with a Government providing the business community with a significantly skewed environment that meant it was easier if you were a participant in one particular area and much harder if you were a participant in another area. That simply is not right, in our opinion.

We do support this bill, because it takes out that special forestry test and brings it back to a “benefit to New Zealand” test, which is, as I say, a good shift back down that spectrum, making it more balanced. It still isn’t totally balanced, because there’s still a more stringent requirement if you are looking to invest in land for agricultural purposes as a foreign investor into New Zealand. So there is still a disparity there, and, actually, the Green Party did put forward a Supplementary Order Paper at the committee of the whole House stage to look at addressing that, to even up, for other reasons, perhaps, but the outcome was it would have evened up the playing field. Unfortunately, the Government didn’t support that, and could easily have had that addition made as well. So, ultimately, we do support it, as I said.

One other concern I had that came up through the committee stage was around one of the amendments that had been put forward by the Finance and Expenditure Committee, which sought to allow an exemption for accommodation on forestry land, because, effectively, the rules said there can’t be residential properties on the land; it’s only for forestry purposes. But that was believed to create a risk for any investor or any landowner who had accommodation on a particular forestry block that would have supported the forestry activities from time to time, for example: old shearers’ quarters, or something to that effect that the forestry workers would stay in, carry out the pruning task, for example, and then head away again. Often these forestry blocks can be in quite remote areas, and so having accommodation on site can be very important. So adding in that carve-out, as was done at the select committee stage, was a way to try and recognise and allow for that variability that is present on some blocks, but not all forestry blocks.

My concern that I raised in the committee stage was around whether that was still too restrictive in terms of not allowing for other uses, such as shearers to use those same accommodation premises, or school camp groups, for example, when they’re not being used by forestry groups. The Minister didn’t seem to understand that. He certainly didn’t address or give an answer to the committee on that, and so that is one area I will be interested to see how that is interpreted. My view is that there should be scope for a slightly more lenient allowance under that category to recognise that whilst the main purposes of that accommodation or neighbouring general curtilage group of buildings in that area is for forestry use, there may be some additional uses that would also still be appropriate and wouldn’t negatively impact on the ability to use that accommodation for forestry purposes. So I would hope that that would be looked upon favourably, to allow those sorts of things to happen, still, in remote rural areas.

So look, overall, we do support it. It is a good step in the right direction, unwinding what was a horrible piece of legislation put forward by this Government four years ago. Thankfully, they seem to have come to their senses or buckled to pressure, I’m not sure which. Ultimately, though, we are in a better position with the passing of this bill shortly than we were before it. So we commend this bill.

First of all, I’d like to congratulate you on your appointment as a Speaker. It’s really a great pleasure to see. I just want to talk in support of this Overseas Investment (Forestry) Amendment Bill for a minute, in opposition to what I’ve just heard from Tim van de Molen. I actually believe there is a place for Government to meddle in the markets, and I think this is a really good example of it being done intelligently. It was not acceptable when we were selling land without control. Land is very special, and that’s been pointed out by the Minister in charge of this bill several times. He’s talked about the value of that land, and indeed the word “taonga” might be the word most appropriately used.

What this bill does is it balances the needs of our society. This is long-term investment. It takes back the test from where it was to a better position and it puts it under the “benefit to New Zealand” test. Just to reassure those listening as to what that means in this specific circumstance, one of the things that will be asked is: are the benefits to New Zealand proportionate to the sensitivity of the land? That will depend on the quality of that land. So one of the things that will happen as a practical result is that high-quality land will likely not be sold under this test, but low-quality land, which is not suitable for farming, will be. I think that’s a really important balance, and I commend this bill to the House.

I’m pleased to take a call on the Overseas Investment (Forestry) Amendment Bill at its third and final reading. I congratulate the Minister for bringing the bill to the House and to Parliament for expediting its progress.

The Greens have got a strong preference for land being owned by New Zealand citizens and permanent New Zealand residents. As others have noted, land is special. It’s finite in terms of its quantity. It’s the basis of our culture and identity, and New Zealanders have a very strong association with place, with particular landscapes. So any overseas companies and individuals wanting to buy land here have to recognise that it is a privilege and that purchase should deliver substantial benefits to Aotearoa New Zealand.

Exotic forestry does, of course, sequester carbon, but, as the Climate Change Commission has noted, if we have an over-reliance on planting, that means a reduced emphasis on actually protecting the climate through reducing emissions. So the 2018 changes—and a note to National speakers: that was a Government where Labour was in coalition with New Zealand First and had a confidence and supply arrangement with the Greens. It is a different Government—it was New Zealand First, which pushed for this special forestry test to encourage the planting of more forests, as Shane Jones was the then Minister of Forestry. But some of the changes made in 2018, like that special forestry test, were problematic. Others, as the Minister has noted, such as bringing forestry cutting rights under the Overseas Investment Act, were, because they’ve got a similar status to long-term leases, an improvement on the prior regime, because overseas companies were using cutting rights in the purchase of those to circumvent scrutiny under the Act. But the Green Party is very pleased that we are now shutting the gate on this primrose path for forestry in that the very limited discretion that Ministers and the Overseas Investment Office have had until now in terms of forestry applications by overseas investors, because they haven’t had to demonstrate a benefit to New Zealand, meant there was really very limited oversight.

When we’ve got 57 percent of plantation forestry in Aotearoa being overseas owned, the Greens don’t think we need to encourage any more land purchases by those overseas corporates. So we certainly welcome the removal of the tick-box test and the fact that overseas applicants will now have to comply with the general “benefit to New Zealand” test. But yesterday, Supplementary Order Paper (SOP) 219 that was in my name sought to even the playing field and ensure that overseas investors wanting to buy land to convert it to forestry had to comply with the stronger farmland test, and that stronger farmland test involves the seven general benefit factors, like protection of the natural environment, protection of historic heritage, advancing Government policy, but with a greater weight on oversight and participation of New Zealanders and a consequential economic benefit to New Zealanders.

We were really disappointed that the National Party, despite speeches from Tim van de Molen and others recognising the concerns of Federated Farmers and many in rural New Zealand about the intensive wave of forest plantations, didn’t support the SOP, and I think that is a strong reminder to New Zealanders that National can be very loud on talk but does little to actually deliver. It didn’t develop any SOPs to make the changes to avoid the bill being skewed, as Mr van de Molen said. Nor did it support an SOP which would have levelled the playing field between overseas investors wanting to take land and plant pines and overseas investors wanting to buy land and plant kiwifruit orchards or grapevines to create vineyards.

The Minister said that the “benefit to New Zealand” test has sufficient flexibility and that the assessment would be in proportion to the sensitivity of the land. That still leaves a lot of discretion for the Overseas Investment Office, so we would have preferred that that stronger farmland test applied. We recognise that the bill doesn’t bring permanent forestry for carbon farming into its regime, but there is quite a lot of concern that some overseas companies will buy land, convert it to pine forest, tell the Overseas Investment Office that they want it for harvesting later but then claim the carbon credits and not actually log it, not prune it, and not use it to supply wood processing in New Zealand. That was one of the reasons we wanted that stronger test, and in the absence of that I think it is really incumbent on the Overseas Investment Office to do much more monitoring to ensure that the promises that overseas companies make—that they are planting for plantation forestry to harvest—are actually implemented.

Certainly, in the last Government there was an increase in the funding for the Overseas Investment Office to do more monitoring and to take more enforcement action, and it has certainly done that. But it needs to expand that into really looking at what’s happening in the back country with these big forestry plantations. That was a concern of submitters—and I acknowledge the 24-odd submitters who’ve contributed to changes to the bill. It was a concern of submitters that the land was well managed, that the trees were pruned, that weeds were managed, and that it wasn’t just a case of plant and walk away, and a reliance on carbon credits despite protestations to the contrary. So it is that real monitoring that’s needed to enforce the claims that are made in the application for investment.

So I just close by thanking our select committee staff for all of their work, and the very good report they helped the committee draft, and officials from both Treasury and the Overseas Investment Office. We really encourage the Overseas Investment Office to do much more monitoring to ensure that these provisions in this bill are enforced.

Congratulations, Mr Speaker, on your new role. I stand on behalf of the ACT Party and as a member of the Finance and Expenditure Committee (FEC) to support this bill. Just to get back to the main purpose of the bill, it was to prohibit overseas investors who planned to convert farmland to forest in New Zealand, a forestry conversion, from using the special forestry test in the Overseas Investment Act 2005 and instead require them to apply under the more stringent “benefit to New Zealand” test. We feel comfortable with that.

In 2018, the Government did introduce the special forestry test in order to make it easier for overseas investment to acquire an interest in productive forestry in New Zealand. The test was designed to stimulate forestry investment and could be used in respect of any land that was or was likely to be used exclusively or nearly exclusively for forestry activities, including forestry conversions.

Since 2018, the Government has recognised fairly that the consequential increases in forestry investment in New Zealand, including the increasing number of forestry conversions by both domestic and overseas investors, has led to this scenario where growing investment in forestry has been further accelerated by the increased price of carbon credits, emissions trading scheme reforms, and Government afforestation schemes.

So what will the bill actually change? The bill would remove this ability for overseas investors to rely on the special forestry test in seeking to convert farmland or other land to forestry, and these will be assessed under the test which is less permissive. Now, we do accept that in the real world—the Federated Farmers position: Gisborne is a province that has been hit hard by farmland being snapped up for forestry, including carbon only, not-for-harvest blanket pine afforestation. The Feds did believe that the pace of conversion, in large parts, was becoming distortionary, and Government policies and incentives were causing this.

According to an independent study commissioned by Beef + Lamb New Zealand in 2017, 3,965 hectares of entire sheep and beef farms were sold into forestry. This jumped to 20,000 hectares in 2018 and 36,000 in 2019. Only the dampening impacts and uncertainty of COVID saw a decrease to 25,000 of farmland sold for forestry in 2020. It’s now 14,000 hectares in the first six months of last year.

So the Federated Farmers argument that the playing field will not continue to be level was discussed, and Cabinet had made its decision to go through to the general benefit test for New Zealanders. If farmland to forestry sales will continue to have to go through the more stringent test, the benefits have to be substantial, they have to be considered by the Overseas Investment Office, and they have to address the proportionality of that decision.

While the bill is a step, according to Federated Farmers, in the right direction—and I can understand the Green Party’s Supplementary Order Paper yesterday—it is recognised, and I have spoken to the Federated Farmers, that there is some land that is totally needed to be converted to forests. While it’s correct that international forests can’t directly transfer New Zealand units overseas, they can, however, sell them in New Zealand.

So from an investment perspective it’s not easy, but we do believe in the free market. One of the things that David Parker said yesterday was that he believed in a market that had a long-term view and was disciplined, and he felt that the forestry market met this criteria. ACT believes and agrees that clarity was important, and we were disappointed that even though the FEC took the word of the advisers and the organisations, we would have liked to have seen a review of the guidance scheduled to this primary piece of legislation so people would have supreme clarity and the politicians would be able to sign off on it. We didn’t get that, but we look forward to seeing that at a later date.

We do accept that the Overseas Investment Office has plenty of experience in dealing with this sector, because the number of people who actually invest in forestry, whether it’s syndicates or corporations, is quite small as a universe, and we do believe that that’s highly manageable. The one concern that we did have is that it shouldn’t take more than 70 days to process this from the pre-application interview. We do believe that there is a difference, versus the Federated Farmers view, in terms of the economics of forestry, which has a different returns profile and a different business model to farmland as generally depicted. Forestry applications which are of long-term benefit focus on economic benefits to New Zealand—that makes us stable and measurable to the public.

We heard that subjecting forestry investments to stricter farmland benefit tests could exacerbate this further, which was the other side of the argument. But we also heard that the “benefit to New Zealand” land test would still impose the same advertising requirements across all pathways. ACT does believe, like the Minister, that the 30-year investment with market discipline matched with foreign direct investment is the way forward for New Zealand.

I myself have a member’s bill coming up to the House which fast-tracks investment from friendly OECD nations, embracing principles like that. It’s come to the stage in New Zealand now where we do need to find extra legs to the economy in terms of income, and we should be encouraging sensible investment that is sustainable and which is exposed to public scrutiny that all the political parties can actually see and monitor.

That brings me on to the Overseas Investment Office and Land Information New Zealand. I’m not satisfied yet that they have the capability to monitor exactly where the forestry patch network is, and that surprised me immensely. I thought that that would be nailed down in the books and somebody would actually be able to spit that out on a computer for us.

So ACT believes that this bill balances these competing objectives, and we support the Overseas Investment (Forestry) Amendment Bill to its third reading and into law. Thank you.

Thank you, Mr Speaker, for this opportunity to speak on the third reading—my third time speaking on this bill. We have had a problem of forest conversion for plantation being incentivised in a way that was predicted to be a good thing, and now the tools need to be change. So it’s important to note that this has always been about plantation forestry and it’s not about carbon forestry. Plantation forestry—those trees get pruned and harvested. And I know a little bit about this: it might surprise you, Mr Speaker, and other members, that one of my summer student jobs was, in fact, harvesting a pine plantation, primary harvest. It was a very hard job, and I didn’t go back the next summer. So I appreciate the hard work that goes into forestry.

Of course, forestry is important for New Zealand, and the production of timber is obviously going to be very important in the decarbonisation of our construction industry in particular. We’ve heard from other speeches that the rural community in particular has raised concerns with too much of this plantation forestry from overseas investors, and the Government has responded to that with this bill. So on that note, I commend it to the House.

Thank you very much, Mr Speaker, and it’s an absolute pleasure to be speaking in the third reading of the Overseas Investment (Forestry) Amendment Bill. I was just listening to the contribution by the last member, Rachel Brooking in which she reminisced, I think, in terms of her earlier days of working in forestry, pruning pine trees, and I, too, I have fond memories as a young person in my summer holidays in the mighty Waikato working what were quite long days, I must say, pruning pine trees.

💬 Hon Scott Simpson: He’s a lumberjack.

I wouldn’t go as far as saying a lumberjack, the Hon Scott Simpson, but I must say there is something about getting out in our forests of New Zealand and working as part of that productive sector. Tough work, but work that is enjoyable. I must say, as a member of the Finance and Expenditure Committee which heard this bill, that I think it was a process in which there was a number of perspectives that were brought in front of that committee. I do acknowledge the members of that committee who are in the House here and also those submitters from across the forestry sector that made a contribution in regards to this legislation. Those contributions, I think, are always—but in this case were—of absolute value, because I think the practicality of those contributions in terms of some of the complexities and challenges which exist within this important sector, a sector which contributes a significant amount of value to this great country, is important.

There will be no doubt, or it shan’t be any surprise, from the speakers that have gone before me today that National will be supporting this bill. The reason for our support is quite simple and it is really around the fact that the “benefit to New Zealand” test is going to be the basis on which future investments in terms of forestry are going to be considered rather than the special forestry tests. I think the degree of conversation that was had at a select committee level did go in, in terms of the specific challenges—because again, there are different views and challenges around that. But I think, at the end of the day, as a select committee, in terms of a unanimous position around support of that, I think we’ve landed in a place which is reasonable.

I think there was—and it is important to reflect in regards to, you know, where we have come from in regards to the sector. I must say it was a number of years ago when I was, as we say—and the colleague across the House—probably pruning trees, you know, on the job. But a lot has moved on in the last 20 years in regards to the sector. I think what we were able to—and, hopefully, what this bill will be able to—achieve is in terms of setting that basis and that platform for this industry to be able to move forward.

I think a key element of that is around certainty. So often we are hearing at the moment the feedback back from our business sector and our primary sector in terms of the fact that actually if only we had more certainty in terms of what that future pathway looks like. Heck, if I reflect on the significant contribution that our rural communities and our primary sector make to our country, they’ve absolutely done a stellar job in terms of carrying us through the period of challenge that we’ve had through COVID. I think in regards to forestry and other primary sectors, the weight of burden of compliance and regulation that is on that sector in particular, I think, you know, we do need to and should continue always—I know on this side of the House—absolutely acknowledge and support that sector in terms of the contribution, the important contribution, they want to make.

Sadly, I haven’t got too much more time to go, and I can hear the calls on the other side for another allocation of more time. Sadly, on this day that’s not going to happen but I am very pleased to be able to commend this bill to the House.

Good afternoon, Mr Speaker. It is a privilege to be taking a call on the Overseas Investment (Forestry) Amendment Bill. This Government welcomes sustainable, inclusive, and productive overseas investment. This Government has simplified the Overseas Investment Act by cutting unnecessary red tape and reduced the number of low-risk transactions being screened. We also want to make sure that the overseas investment continues to strongly benefit New Zealand, and this bill does that. The removal of special forestry tests only means that conversions are now treated the same as any other overseas investment in non-urban land. So I commend this bill to the House.

It’s a Thursday afternoon. Look, I just want to absolutely agree with that previous member, Dan Rosewarne, who’s just resumed his seat. He spoke wisely about the importance of forestry. We talk about the right forests in the right place for the right reasons. Everything that we’ve done, and we’ve traversed this quite thoroughly in the select committee process, in the committee of the whole House—but forestry is actually lifeblood. It’s livelihood, where I come from in the central North Island. It was off the backs of our grandparents, who built the Kaingaroa Forest, tree after tree. They wanted to make sure that it was a successful industry and successful economy for New Zealanders going forward, for their children, and their grandchildren.

What we’re doing here is we’re streamlining things. We’re making it more fair. The removal of the special forestry test only means that conversions are now treated the same as any other overseas investment in non-urban land. I commend it to the House.

Thank you very much, Mr Speaker. I rise to speak in support, on behalf of the National Party, of the Overseas Investment (Forestry) Amendment Bill. This bill tries to rebalance things that had become a little out of balance in terms of the assessment of foreign investment. So what we’re trying to do here is say that we welcome—the National Party certainly does—forestry, which has a significant contribution to New Zealand of about $6 billion per annum; we welcome foreign investment; and we welcome having the right tree in the right place, but the problem is that this had become a little out of balance, and so this bill rebalances this somewhat. Rather than having a special forestry test, it focuses on a “benefit to New Zealand” test.

You might ask why that is important. Well, in total, there have been 110 one-off consents granted under the Overseas Investment Act using the special forestry test since October 2018, when the test was introduced, through to 30 April 2022. The total area consented was 240,539 hectares, which included sales from one overseas owner to another overseas owner. There were 90,607 hectares transferred from a New Zealand owner to an overseas owner.

There is a balance that we’re trying to strike here because, like I said, we do welcome forestry and we do welcome foreign investment, but we also think it’s really important that we protect the productive land that is producing food, and I may note that the primary industries themselves contributed $52 billion to New Zealand last year. So that’s huge for our country.

It’s an incredibly important part of our economy and it’s incredibly important for our communities, as well, and I can say that I have personal experience on both sides of this discussion. As a young guy, in fact, I remember going with my younger brother cycling around local farms and asking if they had a job. When I was a 12-year-old, a farmer was good enough to take me on—and I think my brother was 10—and we got our first job, working on farms, and it went on from there. I worked for years as a young person on farms. I helped out in the shearing sheds, I went out cleaning troughs and checking fences, and I went on to do a whole lot of things.

Through many summers, I worked on farms around the region. When it was hay-baling season—you know, the old square bales—we’d get out there and we’d work day and night, bringing in the hay. You’d have to get it in before the weather broke, so we’d stack these hay bales up, seven or eight tiers high, and we’d be driving these old Bedford trucks so you could get them into the sheds at the back of farms. I got my driver’s licence and got my truck-driving licence, and we’d drive these trucks into some pretty precarious places and then unload these things at midnight or after midnight, and then go back and carry on with it.

So I’ve got a very good understanding of just the value of the productive farming sector to the country through that experience from my younger years. I also have experience in the forestry sector. In my teens, I also worked both in the Hawke’s Bay and in Northland in forestry in my summer holidays, making money so that I could pay for school, etc., and—

💬 Angie Warren-Clark: Did you work for my family?

Oh, who knows? I may have—there may be a connection there. So look, I’m familiar with getting up at 4 o’clock in the morning, driving for miles in the back of the van, and then going out in all weathers, pruning trees. You’ve got to fight your way through blackberry to get tree to tree, and then start pruning from the bottom and pruning your way up. You get the ladder on the tree and then climb up and carry on, and you’re often doing this in very steep country.

I did a significant amount of that work. As one of the speakers said before, it’s tough work, and all credit to those who do it because it is challenging work. You really work hard for your money and, certainly then, you were paid by the number of trees you did. So the more trees you did, the more money you’d make, and, obviously, if there’s more blackberry, it takes longer to battle your way from tree to tree.

So I have an understanding of the forestry industry from that practical perspective as well. It is a valuable industry, and it does provide employment and it does provide economic potential to New Zealand, but we need to balance it also with this conversation around our biodiversity. That’s one of the other challenges that we have along with our carbon sequestration and food production. So we’ve got these various things that we’re trying to balance here and get it right.

I understand that the select committee sought advice on this “benefit to New Zealand” test. There were some concerns expressed that this test would preserve incentives for foreign investors to convert farmland to forestry, and after receiving advice on it, the select committee “heard that the benefit to New Zealand test will reduce the risk of losing highly productive farmland to forestry because it requires investors to demonstrate benefits that are proportional to the land’s sensitivity. For example, highly productive farmland would require a correspondingly high benefit.”

I think that’s quite an important point. It’s certainly something that I’ve heard quite a bit about in my electorate of Southland, where there has been quite significant concern expressed by many people in my region, with farms being bought that were quite productive land that are going to be put into forestry. There is a real concern that there will be a significant loss in productive food capacity from those farms being converted into pine trees and, certainly, there is a strong view that this was not the right tree in the right place. Also, there is the impact on the surrounding communities, because the various businesses that provide services to those farms would no longer have that work, and the people who normally live and work in that area would no longer be able to put their kids into school, so it would have the impact on schools, with schools being, potentially, shut down. So there are quite a few concerns there, and also quite a few concerns from some folks that they will not be able to compete in a fair market because what they could pay for productive, food-producing farmland was not the same as those who could purchase it for forestry when taking into account carbon sequestration, etc.

So it’s encouraging to see that the intention here is to demonstrate that the benefits from forestry—which are significant and important, both for wood production and for carbon sequestration—are proportional to the land’s sensitivity. For example, our productive farmland has real benefits—particularly in this current era, where food security is becoming an increasingly significant issue around the world—and we need to really pay close attention to the value that we provide, both economically for ourselves but also for the food that we can provide to others for their needs in a world where food has become constricted and is more and more important for people. So that is an important thing here, and it is something I think is good.

The final thing I would note here is that we certainly do want to send the right signals here. The signals I clearly want to make, as I said at the beginning of my speech, are that we do welcome forestry, we do welcome foreign investment, we do welcome having the right tree in the right place, and we are trying to balance these different considerations with carbon sequestration, biodiversity, food production, and strong communities. This is a bill which we believe has made a positive step in rebalancing the investment framework so that there is a fairer playing field in terms of those who are investing in New Zealand land for the purposes that are important for this country. So, with that, I’ll conclude my remarks and commend this bill to the House.

Thank you, Mr Speaker. It’s a pleasure to take a short call on this piece of legislation. What we have with this piece of legislation—it’s an important piece of legislation. We’ve heard today about the economic performance of forestry here in New Zealand and we’ve heard about the importance of the right tree in the right place, whilst also we’ve heard about the importance of overseas investors being able to invest here in New Zealand. This piece of legislation, I think, puts all of those three into perspective and into a good balance. It’s been very well-traversed on all sides of the House, so I commend this bill to the House.

Motion agreed to.

Bill read a third time.