Overseas Investment (Exempt Investment from OECD Countries) Amendment Bill

Mr Speaker, thank you very much. National will be supporting this bill. We clearly have a view that foreign direct investment delivers jobs, it raises incomes, and it helps New Zealand grow. Therefore, it’s a pleasure to support this, and we hope that it will go to select committee, so that we can dig more deeply into exactly what the bill does. The challenge we have is that although the Government over the last five years say that they have freed up the investment regime, they haven’t; in fact, the opposite has happened. The majority of the changes that they have made have made it more difficult for responsible investors to invest in New Zealand. They’ve screwed the scrum in the direction of forestry, away from other assets. Good that we may have a few more trees planted, although not the billion trees they pledged five years ago that they would deliver for New Zealand. But, in effect, what’s happened as a result of that is the investment has gone in areas that it may not be as productive as the country needs it to be, nor has it benefited the economy as much as it should and hasn’t created the jobs that it needs to.

So when the Government says they’re doing a good job, they’re talking rhetoric and it’s not backed up by the statistics. Unfortunately, New Zealand’s ranking in the index of economic freedom has fallen from third to fifth place over the last three years. And whilst the Government would say, “Well, we’re still five out of all of those countries.”, we are going in the wrong direction, which means that investors around the world—responsible investors who have choices about where to put their capital to help economies grow—are looking less favourably at New Zealand because the direction of openness and ease of doing business is going, sadly, in the wrong direction. We’ve fallen further away from Singapore and Switzerland who are in front of us, both of whom have economies that have performed significantly better than New Zealand’s on average, but certainly over the last few years they’ve performed better than New Zealand’s when it comes to what’s happened around restrictions and COVID, and they’re getting so very, very much more investment than we are getting.

I mentioned—and this is something that we’ll want to look at at select committee if the Government decides to send this to committee for further investigation and discussion, because they’ll be backing up their suggestion that they are in favour of foreign direct investment in New Zealand. But one of the things this bill doesn’t fix and I think we need to look at is the change that was made around the ability to invest in productive farmland in New Zealand if you are going to plant trees on it. And, unfortunately, what that means is we’ve seen foreign companies and others come to New Zealand to buy farmland to plant trees where there could be very many other uses that are better for the economy, would create greater jobs, and would be better for New Zealanders, but the regime that the Labour Government has put in place does not allow that.

One of the areas that we’ll need to look at very, very closely is the impact or interaction this proposed legislation has upon free-trade agreements that New Zealand has entered into, particularly in as far as the most favoured nations provisions in our agreements where we give better conditions in one area—in this case, investment—to others that is not better than is in the agreement that we have with a country, we must extend to them as well. We’ll need to understand that better. But here is the simple position of the National Party: if you are a responsible investor and you want to come and invest and make an active investment in New Zealand—not put your money in a bank or something like that—that will help the economy grow, that will create jobs and help New Zealand pay off the significant amounts of debt this Government has run up and spent on things that actually are not working as well as they need to, then we should be considering that, we should be encouraging those investors to come.

This legislation would send a very clear message to companies and individuals of the OECD countries that New Zealand actually is open for business, as opposed to when the Prime Minister went across to Singapore on her very first trip when she left the country after the COVID restrictions were in place and went there and said, “We’re open for business and we’d like an extra 200 students to come down and work in New Zealand.” Well, that doesn’t actually do it. That doesn’t send a signal that we’re open. That’s not the type of things that responsible investors are looking for. They’re looking for an equal and fair playing field. They want less restriction and regulation, and they want to know that there is certainty that the Government of the day won’t just change the rules and take their investment out from underneath them. This piece of legislation starts to give them that certainty. There is not a single thing the Labour Government has done in five years that does the same thing. In fact, that’s why we’ve fallen two places to fifth.

Thank you, Madam Speaker. What a ridiculous speech that was. It didn’t even touch on the bill; just a series of swipes at the Labour Party’s policy on overseas investment, one which, while slightly different, is largely congruent with that of the National Party, in any event.

Historically, the National Party has been very keen on protecting our strategic assets, and that’s what the Overseas Investment Act does. Let’s just think for a moment, if we exempt OECD countries from the Overseas Investment Act, what that actually means. That means that strategic assets, things like our broadband network, could be bought by overseas countries. That is an asset which carries data of all New Zealanders and all Government agencies. So the Government of Colombia could buy our fibre assets. The Government of Colombia could be transmitting our most precious secrets for us. That’s what it means. That’s what the ACT Party wants. That’s what the National Party is supporting.

If we didn’t have this protection, our treasured high-country stations of the South Island could fall—[Interruption] Yeah, and here we have a party which has fought long and hard around the high-country reforms, and yet here they are saying “Don’t worry about it. Anyone can buy them. Let the President of Turkey buy them. He belongs to an OECD country. He can buy it.” What an absolutely fatuous, unprincipled, and, frankly, undermining position that is. You would sell the family jewels to anyone around the world. All we’re asking is that if someone wants to come and invest in New Zealand, are they a person of good character, is this asset a strategic asset, and are there any security risks involved? That’s the principles that underpin the Overseas Investment Act, and you would say “No.”

So, sure, we might feel we’re in pretty safe ground with some of our OECD partners, you know, Western European nations that have similar values. Oh, but did you know that Russia and Belarus were only recently suspended from the OECD? They’re two nations which have been participating in the OECD. And here you are, they will be back in the fold, quite likely, when peace breaks out in Ukraine, which we hope it all will soon, of course. But that’s what you’re doing. You’re just a knee-jerk reaction. I suppose they’re doing it to grandstand. I suppose they’re doing it because they know that this ridiculous bill is never going to see the light of day under any responsible Government. But I want New Zealand to think about what that means, because if they get into Government in the future, what will they do with our national assets? What will they do with our high-country farms? Our best farmland? The farmland that feeds New Zealand and much of the world, will that fall into the hands of countries which do not align with us in terms of democratic values and our approach to security?

They are really important questions that that side can’t answer. I’m looking forward to the summing up from the member in charge, because I’d like to hear him say whether he thinks our broadband network should be able to be owned by foreign interests like Colombia with no check whatsoever; whether Mexico should be able to invest in some of our most important companies and assets; or whether Costa Rica should be investing in our own high-tech and aerospace and space industries. These are all questions which need to be answered. And you know what? They’ve got no answer. They can chip away, they can heckle, but they can’t actually give a consistent answer. The reason for that is because there isn’t one.

So I’m very proud of the work that the Labour Party’s done around the Overseas Investment Act, stopping foreign buyers buying homes that Kiwis should live in. That was a really good step and we have tightened the framework, as the Minister of Defence will know, around the security test that we need to run the ruler over to make sure we’re not allowing foreign interests to, by stealth, gain a foothold in New Zealand’s security framework. This is a ridiculous bill. That’s a party without ideas. I can’t believe they’re supporting this kind of legislation.

Thank you very much. I’ve met the first lawyer who can’t actually read. If you read the bill, it says that those investments are subject to the national security interest test, which would deal with that, Mr Webb—

💬 Hon Member: Fearmonger.

Yes, it’s pure fearmongering. Also, some of the major companies you’ve mentioned do have international shareholders. So Labour doesn’t want the world to give New Zealand money; it’s quite clear. We’re slipping away from our First World status by an unambitious Government who just, if they had any collegiality, would sit down at select committee and nut out a possible solution in this area. The time is right for this legislation, given the world economic events, and they could have killed it at the committee. But, no, because of pure dogma, they decided to kill it there. You had the opportunity tonight to provide my member’s bill a real fair hearing, and you just wouldn’t do it.

Labour and the Green Party have sold their own demise. In a year’s time, you’ll see that New Zealand wants real change, and overseas investors will be treated as friendly entities from the OECD countries right now. We’re not letting them walk in the door; we’re just saying, “If it’s a proper investment and it’s fast tracked, you can build supermarkets here.”, because there will be no supermarkets built in this country by the time the election comes, and Mr Webb knows that.

So Australia receives 80 percent more foreign direct investment per capita, and their median wages are 40 percent higher than New Zealand’s. So, under socialism, they’re happy to not let investment come in and keep people poor and keep young people from having proper jobs when they have to leave for Australia. Even amongst small nations now, on a per capita basis, Israel attracted twice as much as us, and even Estonia is beating us, attracting three times as much foreign direct investment as we are. This is all just about policy settings. This bill was just about looking at the settings and working through, with the Ministry of Business, Innovation and Employment (MBIE), what could be done.

Grant Robertson promised me eight months ago that he was having a piece of work looked at by MBIE on foreign direct investment, and, “Damien, you should come along and sit down.” I said, “Well, Grant, I’ll wait for that.” It still hasn’t arrived. So, being the gentleman that he is, I’d like him to release the terms of reference for that, and I’ll send him a box of lamingtons to say thank you.

Also, the existing trade laws would have been grandfathered. No existing trade agreement would have been affected by this law. Ingrid Leary from the backbencher B-team who came in at the start to talk about this bill—I mean, the people over there have had no experience of international commerce, banks, or finance, and yet they’ve killed the bill just for the sake of killing it. If that comes from up top with Mr Robertson, I’m very disappointed.

Just to give you an example in Canada: Canada’s GDP, 72 percent of that is originated by foreign direct investment. In Australia, it’s 47 percent, and in New Zealand we are a measly 37 percent. New Zealand has closed the doors from the rest of the world and now we’re a hermit kingdom, and everybody in the Labour Party who’s not elected next year should move to Hobbiton and really hunker down and let us get on with the work.

Inward foreign direct investment in New Zealand is significantly lower than our international competitors and we have only ourselves and our policy settings to blame. This country’s starved of capital. It can’t do the infrastructure projects it needs to do and it’s because of bureaucracy. The capital is out there, the projects are sitting on the drawing board, but it’s the policy wonks that are getting it wrong. Even more scarily, external foreign direct investment, i.e., money going out to other countries—it shows that New Zealand has, on a global investment scale, only got 7.6 percent of its GDP dedicated to going offshore versus 40 percent in Australia. As an example in the United Kingdom—

Order! Order! The member’s time is up.