Overseas Investment (National Interest Test and Other Matters) Amendment Bill

Members, the House is in committee on the Overseas Investment (National Interest Test and Other Matters) Amendment Bill. Members, we come first to Part 1. This is the debate on clauses 3 to 33, “Amendments to Overseas Investment Act 2005”, and the Schedule. The question is that Part 1 stand part.

Madam Chair, I apologise for being up here in my seat. I know your neck will have to turn a lot—

CHAIRPERSON (Barbara Kuriger): I can see you better there than if you’re over there.

Hon DAMIEN O’CONNOR: Yeah, that’s true. Look, thank you very much, Madam Chair, and I guess the saying is that leave the worst to last—which is, effectively, what’s going on here. This piece of legislation being passed through in urgency might seem rather harmless to people out there who think that overseas investment is good for our country—and indeed we believe it is. However, this bill—and Part 1 that we’re starting on here—is shifting the onus of proof, if you like, from the person doing the purchase, from the overseas investor, back on to actually almost the Minister of Finance or the regulator to prove why this investment shouldn’t happen.

Part 1 covers a wide range of areas. But if we start on clause 4, replacing section 3, the purpose—and if you read the purpose, I have to say it sounds pretty good: “The purpose of this Act is to acknowledge that it is a privilege for overseas persons to own or control sensitive New Zealand assets”. Indeed, the Opposition would support that. That was, I guess, a bit of a veil put up, in my view, by the Government to say that “We confirm that position”. But through submissions that came to the Finance and Expenditure Committee—and, unfortunately, I was only kind of a member that popped on and off the select committee, so some of this stuff I did miss—from a couple of people, a couple of parties, not surprising really, were saying that, actually, we shouldn’t necessarily consider that it’s a privilege to invest in New Zealand; there’s some economic advantage, therefore we should just automatically approve it.

The Opposition maintains that it is a privilege to be able to invest in our country. We have sovereign rights, we have Treaty obligations, we have ancestors who fought and worked hard to create what we have here. The ability to invest—through the purpose here, the clause—with conditions is something that we support. But if I can work through this: “providing for notification or consent for any overseas investments in those assets”—this is what has to happen—“imposing appropriate conditions on those overseas investments;”, “managing the risks to New Zealand’s national interest”. I’ll go on to talk about that, because the national interest test is one that has been, effectively, a consolidation of three different areas of oversight, I guess, that were in the previous regimes. We’re going to come up with one oversight.

But there was in here, as subsection (2) of section 3, “This Act also has the purpose of recognising the role of overseas investment in increasing economic opportunity by enabling the timely consent of less sensitive investments through an initial national interest risk assessment.” Look, we support that. But what we’ve had is a fast-track or a streamlining process that shifts the onus of responsibility from the Minister on to a regulator—and there are details in here that I’ll go through. That, in some cases, is OK, but I have a list of amendments here that, if the Government agrees to, I think will tweak the onus and the responsibility back into the place where it belongs, which is with the Minister—placing an obligation that we look at things like character test, which, through the Government’s proposals, through the select committee process, have almost, effectively, been eliminated.

The coalition Government’s intent in saying that anyone who lines up with some money—and they have a late amendment to the bill that says anyone who lines up with $5 million can get automatic residency, but aside from that, anyone who’s investing should be able to invest and buy into New Zealand.

We go back to the principle that it is a privilege. The question I ask of the Associate Minister of Agriculture: does ownership matter? Was that a consideration by the Minister and his party when they were looking at this, or does he simply consider that the sale of anything is OK because we are reducing the oversights, pulling back from the oversight system that we had through this piece of legislation? I’ll leave that question with the Minister as we work with my colleagues through the clauses in Part 1.

The Minister’s prepared to answer, and it’s good if we can get backwards and forwards.

Thank you. Thanks to the member for his questions. In terms of the purpose there, you talk about the ownership; is that an issue? I mean, the key thing here is we want to increase investment. We want to have more investment in this country. It helps create jobs; it creates economic activity.

In terms of the character test, I mean, there is still the opportunity for someone, through this system we have—that if we feel that they pose a risk to our national security interests, those tests still remain. It’s not as, sort of, definitive as it were before, but sometimes being very definitive on a test may not actually be a very good thing. You look at how it used to be. There was a very brightline test: has this person had criminal convictions before? Nelson Mandela had a criminal conviction. If he had have come here, we wouldn’t have said no to him investing, would we?

Hon Dr Deborah Russell: That is so fatuous.

Hon ANDREW HOGGARD: It’s an example. I mean, that is a clear and simple example: someone who had a previous criminal conviction—completely wrong, completely ridiculous—but as an example of someone who is in good standing. There are people out there in real good standings who have been given criminal convictions in countries under systems that we don’t agree with. Of course we wouldn’t want to eliminate them from being able to purchase property or investments here, create investments and jobs here in New Zealand.

Look, thank you, Madam Chair. As I work through interpretation here, we’ve got the breakdown of forestry activities. In spite of all the rhetoric we’ve heard from the coalition Government about coming in and buying land and planting trees, this piece of legislation will still allow that. I think that the Minister has to front up to the farmers on that one.

But can I ask a question around the ministerial directive letter, which is referred to here in clause 5. There’s a lot of weight put on the ministerial directive letter. The question I have of the Minister is: did he or his party or the coalition Government give consideration to any checks and balances in that process? Maybe he can explain how the ministerial directive letter will be developed, because, clearly, in this piece of legislation, it, effectively, tells regulators what they should do. We believe that’s quite a stretch and quite an oversight. We’d be interested to know from the Minister how the directive letter will be developed and what safeguards there will be within Cabinet or within the parties to make sure that we don’t end up with what will always be, I guess, litigation and a battle in the courts because some Minister has got it wrong.

The other point I’d like to make in his consideration and answer is that if there is so much weight given to a ministerial letter, he should remember that what goes around comes around. At the moment, it might be Minister Seymour in the seat, but in the end it could be a Green Minister or Te Pāti Māori or—

Simon Court: No.

Hon DAMIEN O’CONNOR: Well, yes, it could be. You just have to work out that I want to know how the directive letter will be accountable to Parliament, given the strength of legal weight that this piece of legislation is going to give to that directive letter.

One of the key things with this bill is strengthening the oversight around what may be New Zealand’s security interests, what are our national interests—making sure we protect those. One of the challenges, of course, is that that changes over time. Investment in a certain industry at one point in time may not be that relevant to our national interests, but, in time, technology changes, and it could well be. Having a fixed point in time of “this is important right now” is not a smart way. That’s what the ministerial directive letter is about—it’s being able to clearly articulate that if something starts becoming more important, something starts becoming more of a concern, that is the directive that is applied.

Following through on that, does the Minister consider that a letter from an ACT Minister that might be encouraging the sell-off of assets and the investment into New Zealand would be going too far and that a letter from a Green Minister putting the brakes on it won’t be going far enough, and how, then, does he think that Parliament should manage that process?

Thank you, Madam Chair. I do have a series of questions and, obviously, will be going clause by clause. I also have six tabled amendments that we lodged earlier, which I hope in particular the New Zealand First members will consider voting for, because I know some of them align with interests and wins that they have gotten in the past from different Governments.

Since we’re just talking about the purpose right now, what it seems to me is that, firstly, the overwhelming majority of submissions at select committee were against the bill and raised a lot of concerns about the bill. I know that it’s the Government’s view that overseas investment is necessary and sufficient to create jobs, but aside from putting in the purpose of just recognising that overseas investment increases economic opportunity, to what extent do applicants have to demonstrate that they actually will be creating jobs? Can the Minister let us know: is it now, with this new purpose, simply the presumption that jobs are created, whether they will be or not, or is there any way for Governments to look at the reality of whether or not it will create jobs or whether it is simply, for example, in the case of a water-bottling plant, an opportunity for a foreign company to come in here and take an asset like our fresh water without paying any royalties on it, and then make a profit off it by selling it overseas, which we know was very unpopular at the time that it happened. It was extremely unpopular.

This bill, later—and we will speak about this at a later part—is actually taking away the ability of the Government to specifically consider water-bottling plants and decline applications for purchase of land that would allow bottling of fresh water. The question is: is the presumption now that all foreign purchases of sensitive land will create jobs, or do the applicants actually have to establish that with some evidence? Is there an ability of the Government to acquire the evidence and to assess the evidence, or is it just a presumption that that is the case?

I think it’s pretty selfevident. If someone’s going to invest more than a hundred million dollars in something, it’s something pretty serious and there are going to be some jobs. It’s pretty self-evident—water-bottling plants don’t run themselves.

Thank you. Look, following on from that, I guess the assumption is that the Minister’s saying that all the investment comes in for greenfields projects. That’s not the reality, in fact; some of it is for purchase of existing assets. There is reference here in the legislation to “control”. I ask the Minister: what does he consider control should be?

The thresholds in here are quite interesting. The control test is that at least one overseas person alone has 10 percent or more ownership; that that control composition is 25 percent of the amount of a general partner or more—25 percent of the company—or, indeed, more than 25 percent of the voting power to meet that of a general partner.

The question of what percentage ownership of a company does the Minister consider as appropriate—does ownership matter, to go back to my first question of the Minister, and does he think that the thresholds in this bill here are about right, if it comes to, say, buying his farm or buying his family farm or buying, perhaps, Fonterra?

Well, even though it’s not on the table in this bill, if I were to get some investment in my farm, I’d probably be a bit more relaxed in regard to interest than my bank might be, so that might be quite a good thing. It might get some new technology and stuff on the farm. The reality is that every farmer in the country and most businesses all have loans and there are not that many New Zealand banks, if any.

Just further for the member, in terms of the ministerial directive letter, a key point is it “must have regard to the purpose of the Act.” It is presented to Cabinet, and it is secondary legislation, so it’s tabled and it’s gazetted, and so there is good transparency around it.

Thank you, Madam Chair. I’m sure my colleague the Hon Julie Anne Genter will also have follow-up questions to the Minister regarding the job component, but I want to also start on clause 4, “Section 3 replaced (Purpose)”.

The first question I have for the Minister is under section 3(1)(a). I am actually quite concerned with the wording of “providing for notification or consent”, not necessarily “and consent”, which then suggests that as part of the purpose of the Overseas Investment Act, what we’re saying now is that overseas investment doesn’t really need to be consented in some regards or in some instances, and only a notification needs to be provided.

I want to check with the Minister if that was drafted as intended, because that is of concern. Even though we do see subsection (2) about expediency, which comes up in the national interest risk assessment, that is still a consent process, as far as I believe—the Minister may be able to correct me—and that’s not, simply, a notification process. If it is a drafting error, I do have an amendment on this, which is just to replace “or” with “and”, just for some reassurance and, potentially, some clarification.

I want to seek guidance from the Chair—I do have number of questions for you. Do you want me to do a back and forth, or just have some of the questions—

CHAIRPERSON (Barbara Kuriger): I think just keep going and if the Minister indicates he’s ready to answer—

Hon Andrew Hoggard: I can answer that first question.

Dr LAWRENCE XU-NAN: Oh, great.

CHAIRPERSON (Barbara Kuriger): He’s going to answer this one first.

The notification is required where it’s under the national security, so for the core regime, it is still consent.

OK, thank you for that. Oh, sorry, Madam Chair.

CHAIRPERSON (Barbara Kuriger): No, that’s OK.

Dr LAWRENCE XU-NAN: Thank you for responding to that. My second question is around clause 4, replacement section 3(1)(c), which is about managing risks. Now, this is something that we don’t see in the original bill and it’s something that we are seeing popping up more and more and is quite peculiar—this idea of national security and public order risks. When we saw it first popping up was a few weeks ago in the Immigration (Fiscal Sustainability and System Integrity) Amendment Bill and we’re seeing it here. Can I then just check—first question for the Minister, because I do want to, kind of, maybe, have a little bit of back and forth with the Minister on the explicit reference to national security and public order risks—who is responsible for monitoring or for making a determination on what are national security and public order risks?

I might just keep going—

CHAIRPERSON (Barbara Kuriger): Yeah, keep going.

Dr LAWRENCE XU-NAN: —while the Minister is getting some advice. The reason I ask this is, for example, if the national security and public order risk is on the basis of the Government Communications Security Bureau, on the basis of the New Zealand Security Intelligence Service, etc., we know, based on their latest reporting, that they do have a target on, for example, China. In which case, are we actually now going to be saying that as part of a national interest, which is a risk for us because of national security and public order risks, we are actually going to scrutinise and start having a tiered system based on the origin of some of those investments and saying that if you are from countries that are not a member of the Five Eyes alliance, we are going to treat you differently than anyone else because you might pose a national security risk to us? I do want to check with that on who is monitoring, because that is an important question.

In terms of national security risks, it’s already part of the existing regime. In terms of when you talk about certain countries, it’s not about saying no to any particular country; it is about where the investment is going into. If it’s something like our critical communications, then we’re going to be interested as to whether or not that company has links to any other Government out there. As you can probably well imagine, those are real concerns at the moment in the very geopolitical, conflicted sort of world that we live in. Those are the sorts of decisions we’ll be making.

Thank you, Madam Chair. I do appreciate the Minister’s sort of very earnest answer to that, but I think that does then raise the question of where are we getting this information from and what is the source of how we determine? I do admit that from the Minister’s perspective, telecommunications, for example, is a key area. We’ve seen this sort of thing popping up in one of the latest bills, for which we also went through urgency a little while ago, the Outer Space and High-altitude Activities Amendment Bill, where we had to put in certain frameworks around it. But even then, one of the questions we asked was is this something that we are getting from our Five Eyes partners? Will our Five Eyes partners start interfering in the way that we look at even something like overseas investment? If the Minister could acknowledge that Five Eyes will have a role to play in terms of determining some of these elements of national security, that is important for this House and for the public to know.

I’m going to move on to my final question for clause 4, on the purpose, and that is on what is the intention behind including new section 3(2), because, again, section 3(2) is a new provision. I also understand the need of recognising the role of overseas investment, increasing economic opportunities—all of those. That is already embedded in the rest of the bill. Does it need to be a part of the purpose? What does the Minister think it is going to achieve to include that particular subsection as part of the purpose?

Just on the point around who makes the decisions, the New Zealand Government makes the decisions.

Thank you, Madam Chair. As I slowly work through Part 1—and we’re not going to dwell on this unnecessarily—there are some legitimate questions here. Effectively, the bill is allowing the Minister to delegate to regulators the decision-making power about who comes in and who is allowed to invest. Clause 7(3), new subsection (4), states, “Subject to subsection (2), if the national interest test is met under section 19 and if the transaction is not contrary to the national interest,”—there is an issue and I have a question about national interest for the Minister, but this is for the regulator—“the regulator must grant consent.”

While we are not opposed to efficiency and some streamlining, putting this in place—that he or she must grant consent—is something that I think this legislation goes too far on. I have an amendment here that would take out “must” and put in “may”, because I think that right up to the final point of decision making, regulators and Ministers should have that discretion, based on either last-minute information or some other consideration that has occurred during a process. This would say that the regulator must grant consent.

Can I ask the Minister whether he would consider supporting my amendment that would insert “may grant consent”. We are not trying to tip the whole process on its ear, and if the Minister appropriately delegates to the regulator and we go through the national interest test and it’s met, then just saying that the regulator has to grant consent, I think, removes the ability for us as a sovereign State to actually make that last-minute decision.

In terms of the “must”, the reality is over the last couple of decades, only 2 percent of investments have been declined. The vast majority just go straight through. What we’re trying to do is streamline the process—more efficiency. Previously, we were in a situation where two Ministers had to spend their time and effort approving these things. When we’ve got the test, these things can be delegated down. Is there a national security interest? Is there something in the national interest that needs to be checked? If not, let’s get on with it.

I appreciate the points the Minister’s making, but he didn’t answer my question. It shouldn’t then impose an obligation on the regulator to do this—that is one step too far. If ultimate accountability is with the Minister, then delegating the process to officials might be OK, but not a final decision. The fact that later in this piece of legislation, the Minister has the ability to approve, even if the national interest test has not been met—now, that’s for a later discussion, but there are a lot of concerns in this. I guess what I’m asking for—and I’ll table this later, of course, and we’ll vote on it, and I’ll move on to something else. But if the Minister can consider that—to insert “may”—then I think we would support that. As I say, the Opposition is not opposed to foreign investment and we’re not opposed to bringing money into our country for development and for jobs and for wealth creation, but a lot of that money doesn’t necessarily—in the latest amendment that the Government has tabled, saying to someone, “If you’ve got $5 million, you’re in.”, in my view, that should be $50 million, but I know my colleagues will ask those questions. Really, to the Minister, I would really appreciate if he could consider that “must” to “may”.

Thank you, Madam Chair. I did want to ask one more question just about national security, because now national interest seems to be very linked to what we think is national security. The Minister gave the example of communications technology. Does the Minister believe that our freshwater resources are not strategically important to national security? Same with, I guess—I was also going to ask whether ports infrastructure would fall into that category, as far as he is aware, or is that something that is—yeah. It’s not specifically defined, so I’m just wondering if the Minister could give us a little more guidance on how narrow the definition of national security is.

Moving on from that, in clause 5, subclause (3), we have “strategically important business”, which is “prescribed to be a strategically important business by regulations made”. What sort of, like, process—I mean, how much democratic oversight are we going to have over what is determined or deemed to be a strategically important business?

Thank you, Madam Chair. Sorry, I moved location. Sorry, I do have one final question—a couple of quick-fire questions under the “Purpose” section. I do take note of the fact that the Minister responded by saying the New Zealand Government makes the decision but did not deny the fact that there is influence from Five Eyes partners, which we also see in the regulatory impact statement. For example, both page 6 and also page 19 make specific mention of “other countries” which all happen to be part of our Five Eyes partners. I want to check with the Minister, then: has the Minister or the department done any potential chilling effect this will have for other overseas investments who now may consider that New Zealand will, in fact, take a very biased view when it comes to overseas investment based on your geographical location? That’s my first question.

My second question, just to follow on from what the Hon Julie Anne Genter asked earlier in her first contribution in terms of jobs—the Minister mentioned it’s a no-brainer that if an overseas investor comes here, they are going to be bringing jobs domestically. But can I check: has there been any studies or any assessment done by the officials or by the department that look at what happens if you have a particular industry where the overseas personnel or investors will come here and bring their own team and their own people here, as opposed to hiring local people? Have there been any sort of studies done on whether that is a scenario, because we know that it happens, but what is the prevalence of that, if the Minister wouldn’t mind elaborating?

Now I’m going to move on to a new clause, which is clause 5A, and this is a clause that is being, understandably, inserted after the select committee stage. I wasn’t part of the select committee for the consideration of this particular bill, but I do want to check with the Minister on what is the rationale behind the inclusion of “limited partnership”, because we are already seeing a number of different aspects, including trusts, including body corps, including individuals, that are considered overseas persons—understanding that we’re talking about legal personhood and not necessarily a person as in a human being. So, yes, I just want to check in terms of the rationale behind including a limited partnership. Obviously, we have many questions after this, but we’re just going to start moving clause by clause.

Just on that last point, I mean, this clause, effectively, corrects a potential ambiguity currently in the Act, which has when listed limited partnerships are considered to be an overseas person. The newly inserted subsections set it out for when a limited partnership can be treated as an overseas person.

Thank you, Madam Chair. Just looking at the Minister’s Amendment Paper, on page 10, clause 15, new section 19E, I’m just struck by a sentence at subsection (1)(a), which is “either the relevant land is or includes a residential dwelling”. Why I’m interested in this is because I know that “relevant land” is defined in section 12 of the primary Act, and it’s amended a wee bit, but not particularly, here. I know also that there is the schedule to the Act that goes through in some detail about different land classes, so that’s not my question. My question is about this relationship to the land and a dwelling and the language there that “either the relevant land is”, and it could be then “a residential dwelling”, because it’s “or includes a residential dwelling”. If there’s a reason for that drafting at paragraph (a), I would be interested in that.

Then I see further down in paragraph (b), it is more specific at subparagraph (i) and (ii), about the $5 million and whether the $5 million is just for the land or if the $5 million includes both the land and an existing building or the land and the potential construction of a new building. If I read this and I see land is a dwelling—that doesn’t make sense. Land is land and a dwelling is something that sits on top of the land. They are quite different components when you come to the price of, I guess, what we might all call a property, which may or may not include that house. I was wondering if the Minister could give some commentary around that wording. Thank you, Madam Chair.

Thank you very much, Madam Chair. I’m just interested to pick up on that new section 19E provision in Amendment Paper 470, which is around when the qualifying investor visa may be relied upon under the national interest test. In particular, it’s the agreed purchase price I’m interested in, which is $5 million or more. When you go to the commentary of the bill, the purpose of this bill is to “reduce the regulatory burden on overseas investors”. The idea I get from reading this is that there’s going to be some investment in New Zealand—like, maybe some infrastructure or some jobs or something that would benefit more than just the individual—but, from reading that provision, it looks like someone can just buy a big house somewhere for $5 million, and that’s about it.

I’m really interested to understand from the Minister how this Amendment Paper would actually fulfil some of the purposes of what the bill sets out to do. Has he considered requiring an investor to maybe employ a certain number of New Zealanders or maybe train one—what about that? Imagine if one investor had to train an apprentice in a particular trade that might benefit New Zealand or invest in our training or our people. Has there been any consideration that if someone’s coming into New Zealand from another country with some money, we might ask them not only to just buy a nice house for $5 million but to actually contribute to the building of our country in a way that benefits more than just themselves? I’d be really interested to hear from the Minister if he’s considered any of those additional factors.

Thank you, Madam Chair. In keeping with my agreed process of working through, I’m not going to dwell. I’ll go now to clause 19, national interest test, and go to new section 19A(3), as inserted by clause 15 of the bill. It’s the process of going through to establish what is national interest. It says, “See section 34,”—right—“which provides that a Ministerial directive letter may direct the regulator about the risks or factors that suggest that a national interest assessment is required … and that the regulator must comply with the direction.”

Well, it does imply that the ministerial letter could say there’s no risk. There is a scenario that—let me put it to you, and I’m pleased that someone from New Zealand First might be contributing to the debate, because I’d hate to think that New Zealand First puts New Zealand last. I’d hope that they will vote for some of our amendments that offer more security to the sovereign rights and protection of our country. I welcome his interest in this. But there was a time when his leader, who’s now the Minister of Foreign Affairs—and I’m not saying there was anything wrong with this, but he was enthusiastic about building relationships with Russia. If he was the Minister, then I guess he would have, or could have through a ministerial directive letter, implied that there was little or no risk in allowing Russian investment.

Now, I’m sure he, like the rest of us, now understands the risks, and we wouldn’t like that. But this process, this piece of legislation, would allow a Minister to direct the regulator about risk or absence of, so that does concern me a little bit. I guess the “Stage 2”, if I can go on to new section 19B—I asked the Minister whether he’s considered the downside risks of a Minister who might, just for a period of time, maybe make a wrong judgment on risk, and where that would leave our country. That certainly would have been the case with Russia. But if I can go on to new section 19B, “Stage 2: national interest assessment by regulator”. This is what the regulator has to do: “(a) must comply with any relevant directions”—including the ministry or directive there—“(b) must have regard to the mandatory factors in section 19C(1); and (c) may have regard to 1 or more of the non-mandatory factors”.

Now, if you go back and look at the statutory obligations that you’ve got to look at and then the non-statutory ones, then they’re not frivolous; they’re not insignificant. I’ll just go back and say why would you make it voluntary to look at the non-statutory ones when, in fact, most New Zealanders—if I can see them here—would consider them to be quite significant? They do relate to character. That’s one of the factors there that if the regulator doesn’t have to consider those factors, then it’s very easy for someone in today’s world to get through the door and to purchase assets in this country. There’s some, as I say, fairly liberal kind of benchmarks here, and coming into our country in a way that, even with the best of intentions, has been allowed to happen through this. My question to the Minister is, once again, will he support my amendment that, in 19B(1)(c), changes from “may” to “must”, which says the regulator must have regard to one or more of the non-statutory factors? The Minister will be aware of those non-statutory factors. If he’s not, I’m sure officials will provide that.

But I also requested New Zealand First to consider whether they should support us in having that go through. It’s a perfectly reasonable adjustment to just offer a little more security to a system that we have supported, can be made more efficient, but we’re not prepared to go as far as this piece of legislation takes us, because we believe we do, as I said before, have sovereign rights. We’ve got assets that we want to protect and a direction of travel that we as Kiwis want to determine—not have that placed into the hands of these investors, many of whom will be positive, but not all. The vast majority, as the Minister is referring to, just the odd one or two cases—most of the law we make in this place here is for a very small number of people who want not to abide by the law, who want to rip us off, not pay taxes, kill someone, or whatever. We make law all the time for the minority, and this, once again, is a piece of legislation that if we just think, oh, there’s only a couple of exceptions, then it is quite relevant to this, the amendment that I’ve tabled, and I ask the Minister to consider that, and I’ll leave this to my colleagues to ask some other ready questions.

We’ll be sticking with the word “must”. In relation to Ginny Andersen’s question, first of all, to get the visa, you’ve got to have invested $5 million to start with, and then if you want to buy a house here, you have to pay $5 million for the house. With regards to Rachel Brooking’s question on that house, it is the property, if you want.

Apologies, yes. Look, thank you very much. I would like to continue with the inquiry here, as I say—sorry, I got lost here. The non-mandatory factors that I referred to in my question for the Minister are: investor risk factors, whether the national interest risk may be adequately managed, or whether the risk that is contrary to the national interest may be offset by the benefit of the transaction. These are reasonable questions—that they don’t have to be considered. I ask the Minister that we do.

Can I go on to another area, which is just below that: “Stage 3:”—it’s, again, new section 19D, inserted by clause 15, for the Minister—“decisions under national interest test by Minister”. Acknowledging we have a national test process, but this quotes, “The Minister may decline consent to a transaction of national interest if the Minister considers that the transaction is contrary to New Zealand’s national interest.” I’d like to say, “must decline”.

What this does is leave the door open for a Minister to approve a transaction or a consent even though it doesn’t meet the national interest test. Now, I’m not sure whether that is what is intended here. I don’t think that New Zealand First would support such an amendment or such a proposition in there. My amendment says that the Minister must decline if it hasn’t met the national interest test. It’s a perfectly reasonable amendment.

Again, I ask the Minister to consider that. I ask members in New Zealand First to put New Zealand first and make sure that they support that amendment. I’d be interested in the Minister’s feedback.

Thank you, Madam Chair. Just going back, I note that the Minister hasn’t replied to most of my questions from my previous contribution, so I’ll just go ahead—I mean, it’s fine; it just hasn’t been replied to, so I’m not sure if I should ask it again or not. But I can think, off the top of my head, of four different types of cases where a foreign company purchasing assets in New Zealand has not benefited New Zealand. Of course, our current regime didn’t stop those purchases, so, if anything, I think the regime should be tightened, not loosened. New Zealand is a small country that struggles to get good levels of competition, which means we’re susceptible to oligopolies and monopolies, which everybody knows. Making it easier for foreign corporations to come in and purchase companies actually makes that worse, because it’s not a competitive environment, and so they’re able to extract profit without investing and making the service better.

For example, retirement villages—I had a number of constituents who live in a retirement village in Berhampore in Rongotai extremely concerned that it was sold to an American hedge fund and that that company was looking to maximise profit from the operation, which means cutting services. That’s not in the interest of our elderly here in New Zealand, and particularly those living in those villages.

Another example is our bus companies. We’ve had multiple bus companies that were familyowned businesses, built up here in New Zealand, providing public transport services, who’ve been purchased by, again, American or Australian hedge funds who are simply looking to maximise their returns, to the point where they didn’t have a single staffer in Wellington to talk to the bus drivers who were supposedly employed by the company.

Water-bottling plants—I think it’s very clear that the New Zealand public is not in favour of Governments being required to sell land that’s going to be used for the purposes of a water-bottling plant to foreign-owned corporations. Much of that work can be automated, but water is a taonga—it is a taonga. It’s a precious resource that absolutely is something that is fundamental to us being able to live here in Aotearoa. If foreign companies are able to come in and buy up all our land and bottle the water and take it and sell it overseas, well, they’re benefiting. How is Aotearoa New Zealand benefiting from that? It’s not.

I could keep going with these examples. I know that it may be the ideology of the Government of the day that allowing foreign control of our strategic assets is magically going to make us richer, but if we want to own our future, selling it off to overseas corporations who are not invested in the future of Aotearoa is not the way to do that. I can’t believe that New Zealand First is contemplating supporting these changes.

I have a number of tabled amendments that I want to speak to. One is amending clause 12. This one is specific to the issue of extraction of water for bottling and would keep consideration of whether the investment will result in negative impacts on water quality or sustainability, because water is fundamental to life. There will be water wars in the future. New Zealand would be wise to keep control and protect our water, because there’s no life without water. People realise that, right? We’re going to sell it off in bottles to people in other countries without even getting a royalty on it. We can’t put a royalty on it. All we can do is try to make sure that it’s New Zealand - based people and organisations that are able to use the land and use the water. Now, I think there should be a lot more control on that.

All right. My next tabled amendment amends clause 15. That’s just bringing in consistency with Te Tiriti o Waitangi and Treaty settlements and the public benefits of an investment. If this legislation—and what we heard significantly at the select committee was that this legislation is weakening oversight on things that matter to the long-term interest of New Zealand. There were multiple expert submitters who came who were experts in law, experts in public good, who were saying, “These changes are not simply about efficiency and they’re not about maximising benefits to New Zealand. They make it harder for Governments to act on the public interest, because they’re not allowed to consider a broad range of factors that will be about the long-term interests of New Zealand.” But maybe the Minister could just respond to my question about whether he thinks water is a matter of national security or not.

Just regarding your first point there around competition, and, I guess, the comment I’ll give you flows through into the water bottling element with regards to the environmental measures. We’ve already got rules and regulations in New Zealand that manage these things. We don’t need to do it twice through the overseas investment formula.

Hon Damien O’Connor: You can’t rely on the RMA.

Hon ANDREW HOGGARD: Well, true, you can’t rely on the Resource Management Act, and that’s why we’re getting rid of it. In terms of competition—[Interruption]

CHAIRPERSON (Maureen Pugh): OK—OK! This is not a political rally.

Hon ANDREW HOGGARD: —you’ve got the Commerce Commission dealing with that. In terms of water bottling, if there is a challenge around, say, water availability in a region, regional councils are already managing that—while they still exist. Whatever follows them will manage it as well, around how that water is allocated. We’ve already got mechanisms in place to manage all this. We don’t need to do it twice and complicate the hell out of things through the overseas investment regime.

Thank you, Madam Chair. I have a couple of questions. My first question relates to the provision—it’s actually in the explanatory note of Amendment Paper 470, which talks about existing forestry land: “the Bill as introduced allowed land that could previously have been acquired under the special forestry benefit test to instead be acquired under the new national interest test pathway, unless residential land is involved … This Amendment Paper allows land that is used exclusively, or nearly exclusively, for forestry activities, but that also includes residential land, to be acquired under the new national interest test.” I’d really like to understand from the Minister what is the purpose and what is the intent of that change in particular, which is marked right out front.

My second question is in relation to the provision around—I’m going to go back to this question around the national interest and purchasing property. My recollection quite clearly is when I worked as an official in the New Zealand Police, one of the biggest problems we saw for organised crime was in a time when you didn’t have to be a New Zealander to buy a house. People from overseas with money could buy houses in New Zealand until the law was changed—I think by Labour; I’m pretty sure.

CHAIRPERSON (Maureen Pugh): Can I just check which clause you’re speaking to, please.

Hon GINNY ANDERSEN: I’m speaking to the provision—new section 19E, inserted by clause 15, and this is set out on Amendment Paper 470—that enables anybody to purchase, if they spend $5 million, a property in New Zealand, access into New Zealand, if they have a qualifying visitor visa.

The Minister has already addressed some of these issues, but I’m picking up on the fact that we had a situation not too long ago in New Zealand’s history where organised criminal networks would purchase properties in New Zealand. They would turn up with someone bona fides and they’d have all the right documents, and they would purchase a property, and in the police it was known because these properties would be in lucrative areas. There would be no lights on at night, so the neighbours would report them, and they would be put on the market and they would be sold.

CHAIRPERSON (Maureen Pugh): Can I ask the member to get to her question.

Hon GINNY ANDERSEN: How can the Minister reassure New Zealanders that this provision will not enable what has happened in New Zealand’s history, which is that organised criminal networks come in and purchase properties in New Zealand and use it as a way of money-laundering? If anti - money-laundering legislation is important to this Government, how can he reassure us that opening the gate to $5 million property purchases from people who are coming into New Zealand will not once again expose us to the same risks we saw in the past under the previous John Key Government?

In terms of your questions around the forestry, the example is a worker’s cottage or accommodation—that’s what that’s all about.

In terms of the qualifying visa, the whole intent here is that we want these high net worth individuals that can really add something to this country to want to come here, to want to invest, and if they’re going to that, they want to live somewhere. They don’t want to spend all their time in a hotel; they want to be able to have a house of their own here. This is about encouraging that and making sure that we get more of those excellent investors into this country. That’s the whole purpose.

Thank you very much, Madam Chair, and I thank the Minister for that assurance. It leads on to my next amendment, that the Minister will, hopefully, consider carefully. It’s to do with the ministerial oversight. If I can go back to the non-mandatory factors that must be assessed in a national interest assessment, all of the following—these are the nonmandatory. It says, “investor risk factors”, but the Government took out “including character and capability”. The second one is “whether a national interest risk may be adequately managed by a condition imposed on the investment;”. The third one: “whether a risk that is contrary to the national interest [can] be offset by the benefits of the transaction.”

Now, hopefully, there’s an obligation that—no obligation. The regulator “may”, under the current bill—hopefully, with my amendment, “must”—consider those factors, as adjusted, with “character and capability” taken out, which is horrific. Then, when it comes to the ministerial decision-making, what I suggest is that what is good enough for the goose is good enough for the gander, so, again, the Minister “must have regard to … relevant directions”, “must have regard to the mandatory factors”, and “may have regard to 1 or more of the non-mandatory factors”.

Minister, I have an amendment that says “must” there. It’s a simple adjustment. Again, I hope that New Zealand First can consider this. It’s bad enough to take out “character and capability” from the non-mandatory test, but at least the Minister should have to consider those other factors that remain. My question is to the Minister: will he consider that? I’ll leave that with him before I take another call.

CHAIRPERSON (Maureen Pugh): Can I just check, is this the same “must” that you referred to in a previous contribution?

Hon DAMIEN O’CONNOR: My amendment, Madam Chair, is to new section 19D(2)(c), inserted by clause 15. Have a look there. It says “may”, which is the third requirement of ministerial decision-making. What I’m suggesting in my tabled amendment is that that would shift to “must”. I’ll leave that with the Minister to consider.

Thank you, Madam Chair. Noting that we are on the crux of the bill, which is clause 15, I want to start by focusing on Amendment Paper 470. Now, noting that this Amendment Paper was only released after the select committee stage, so we haven’t had a chance to discuss it during the Finance and Expenditure Committee—and I know that the Hon Ginny Andersen has asked a few questions on this, but I’m just, I guess, seeking the committee’s understanding. We do have a few questions, and some of them might be quite broad, because we’re trying to get a sense of what this amendment is trying to do.

Going straight into my first question: what is considered in this—I’m sorry, this is clause 15, inserting new section 19E. Subsection (1)(a)—we’re going to start with that. I’m also just seeking your guidance, Madam Chair. I’m happy to do a back and forth with the Minister, as we did before, or I’m happy to just go off on a number of questions—whatever is the easiest for the Minister. The first question is: what is considered to be a residential dwelling or relevant land? I’m guessing relevant land has to be residential land, in this case—if the Minister wouldn’t mind nodding or acknowledging.

Hon Andrew Hoggard: I think it’s land you put a house on.

Dr LAWRENCE XU-NAN: Second—and that’s my first question. Oh, sorry?

Hon Andrew Hoggard: Pretty sure it’ll be land you put a house on.

Dr LAWRENCE XU-NAN: OK, thank you. My second question is: what is the rationale behind, I guess, in terms of including a residential dwelling or constructing a new residential dwelling? I’m noting that subsection (1)(b)(ii) says it’s, basically, looking at the cumulative cost of both the land and the dwelling, which is $5 million. Can I check with the Minister: was there any consideration of the proportion around that? What happens, then, if someone spends no money on the land but spends like $4 million on the house—I’m assuming that’s fine—or someone spends $4.8 million on land and $200,000 on the house? Is there any proportionality needed? I’m just going to check with the Minister—no? I can keep asking questions, all good.

The next question I have is subsection (1)(c)(i), and this is something that I found quite peculiar. I do have an amendment on this, but I also seek, I guess, a clarification from the Minister. For (c)(i), it says an individual who holds a residential class visa, or another qualifying individual—and I want to check with the Minister why another qualifying individual is required in this definition of an individual. I wondered if it’s a drafting error. Again, we have no understanding of this particular amendment. That’s my amendment 7.23.06, just to remove that, because I do find it quite peculiar that you need to have two definitions there.

I’ll start with those questions, if the Minister wouldn’t mind responding. I do have further questions.

Hon Members: Madam Chair? Madam Chair?

Dr LAWRENCE XU-NAN: Oh! Madam Chair?

CHAIRPERSON (Maureen Pugh): You want to continue with your line of questioning?

Dr LAWRENCE XU-NAN: Yeah—and the last time, just mentioning, Madam Chair, that the Minister does need to seek some—

CHAIRPERSON (Maureen Pugh): Dr Lawrence Xu-Nan.

Dr LAWRENCE XU-NAN: Thank you, Madam Chair. The Minister does need to seek some guidance, but when the Minister is ready to respond to any of the questions, feel free to stand up and then I’m happy to sit down, and then we can keep going from there.

My next question is—I guess we’re looking at new section 19E(1)(d), and this is another really interesting clause that I’m trying to get my head around, which is “A will not have any beneficial interest” or beneficial—on “more than 1 property as a result of any person relying on A’s qualifying investor visa.” Now, previously, under (c)(ii) or (iii), it sets a certain framework, i.e., a body corporate or a trust which “A” already has, I guess, a stake in—in both of those two, if you’re looking at a requirement under (i) and (iii). But for (d), it’s talking about someone who is acquiring property but on the basis of A’s qualifying investment visa.

How would that work in practice? Are we saying that it’s someone who has no qualifying visa but yet on the basis of somebody else—it doesn’t specify any familial relations or any business relations in this sense. It just says someone needs to rely on A’s qualifying investor visa. Can it be anyone who says, “My friend A has a qualifying investor visa, therefore I’m able to have a property because they have a visa.”? I don’t quite understand the drafting of this, so I’m seeking the Minister’s guidance. Indeed, if that link is tenuous, I do have an amendment—and this is the one that’s lodged at 7.23.09—that simply changes (d) to say that no person actually shall rely on A’s qualifying investor visa to have any beneficial interest in or beneficial entitlement to any property.

I want to start with those, and those are my questions for new section 19E(1).

OK, so just back to your original one—in terms of the property, how do we define it? It must be residential or lifestyle on the district valuation role. In terms of proportion, there is none; it’s just $5 million. Qualifying individual is a New Zealand person, their wife or spouse, immediate family member—it could be in a trust or account name. OK. [Interruption] We’ll be all right without all your amendments.

CHAIRPERSON (Maureen Pugh): It would be polite, if nothing else, to wait for the Minister to finish speaking—resumed his seat. Not quite there yet.

Dr Lawrence Xu-Nan: Point of order. I’m so sorry, Madam Chair. Because there was so much noise on that, I didn’t actually hear the Minister’s final comment.

CHAIRPERSON (Maureen Pugh): I’m not surprised. I’ll ask him to repeat it. Thank you.

Hon ANDREW HOGGARD: I said we’ll be all right without your amendments.

Thank you, Madam Chair. I do want to speak to my proposed amendment; this one is a tabled amendment to clause 15, new sections 19 to 19D, and cross-headings inserted. In clause 15, delete 19C(2)(a). In clause 15, after section 19C(1)(c), insert “(d) investor risk factors”.

Now, the point of this is to make investor risk factors—to move them from a non-mandatory factor to a mandatory factor for the national interest assessment. I would like to understand the Minister’s rationale if the Government would consider that investor risk should be something that is always considered as part of the national interest test or not.

I’ll give a recent example, because I know the Minister’s very enthusiastic about the idea of foreign investment in New Zealand benefiting New Zealand. But while I can think of many examples that are different, one in particular is SolarZero, which was a New Zealand - grown company that was enabling people to access solar panels on their homes. They had a significant investment and highquality job creation in developing their own software and hardware here in Aotearoa New Zealand.

What was really interesting—I mean, we all know that solar electricity is a major opportunity for our country; that’s an opportunity for lower power prices. But in order for people to access that, we need them to not have to deal with the upfront cost of the solar panels. What SolarZero did—and it was Solarcity prior to that—is they would own the solar panels, and they would, essentially, provide the solar panels on somebody’s home or business. They were operating a kind of distributed power plant with batteries and technology, so they could manage—

Hon Member: Question?

Hon JULIE ANNE GENTER: Yeah, I have my question. But my point is that that was a company grown in New Zealand that was of significant benefit to New Zealand, employing a lot of people and providing affordable power to a lot of people. They had some investment by BlackRock, which promptly then put them into liquidation. OK. I say this as an American—

Hon Member: They also had to invest in the New Zealand Government, which lost them money.

Hon JULIE ANNE GENTER: No, I—all right. Just for the members opposite: there was never a Labour-Green Government. There was a Labour majority Government. The Greens were not in Government.

CHAIRPERSON (Maureen Pugh): Can we come back to the bill.

Hon JULIE ANNE GENTER: We worked with them just like we worked with—

CHAIRPERSON (Maureen Pugh): Come back to the bill, please.

Hon JULIE ANNE GENTER: OK. I just, like—it gets repeated in here a lot. I think it was worth putting on the record that there was never a Labour-Green Government. There was a Labour - New Zealand First Government and a Labour majority Government. The Greens have never been—

CHAIRPERSON (Maureen Pugh): Come back to the bill.

Hon JULIE ANNE GENTER: —in a formal coalition Government, so stop blaming us for the mistakes of previous Governments.

The point is that, to me, that is a massive investor risk factor. I don’t know what the motivations of BlackRock were to liquidate the company, but a whole lot of New Zealanders lost their jobs, were not paid upfront; a whole lot of New Zealanders lost the solar panels that were providing affordable power—so yet another example in recent times of foreign companies basically being vultures who are not at all interested in the long-term benefit of New Zealand and providing major risk factors.

I’m worried that I’m not going to get another call, Madam Chair, so I’m just going to speak to the rest of my Amendment Papers. My next Amendment Paper—and there’s two—is about the ministerial directive letter. I would like to take a separate call on that one, actually. There’s one on time frames, which I think would be of interest to New Zealand First, simply amending clause 23 to replace “15” with “30” days, because 15 days is a very short period of time for our public servants to be able to consider sensitive land sales and it does undermine due process to shorten it so much. I think 30 days is perfectly reasonable.

Then there’s some issues with clause 27—that’s still Part 1—and with clause 22 about the ministerial directive letter that I would like to—but it would be great if the Minister would consider whether investor risk factors are something that should be considered in the national interest test.

That will still be a point of consideration, whether these people are good—that’s still going to be considered. In terms of the 15 days, that’s simply the time frame in which they consider if there is a national interest, yes or no. If it’s a no, then it gets approved. If they feel there’s a national interest, then we look a little bit deeper. We’re not going to waste time looking over everything to the nth degree when we don’t need to. If there’s nothing that concerns us, then we move ahead.

I move, That debate on this question now close.

We’re not quite there yet. There’s still a bit that hasn’t been covered, so I’m prepared to take those questions.

Thank you very much, because I do have these amendments. I’m getting close—I think there’s another two or three to talk to. This one relates to clause 18, “Section 25A amended (Conditions of consent)”. Then it goes down to new section (4)(a) and (b). It relates to “The regulator or Minister may apply conditions to manage a risk to New Zealand’s national interest only if—”. Can I just say that while there’s a streamlining of the process at the front, I think it’s important to have some safeguards at the back. This is why I’m asking to actually remove new paragraph (b), because it says, “only if—(b) the conditions are no broader than necessary to manage the identified risk.”

The reality is that there’ll be other factors, rather than just a specific risk that might be identified. This would constrain and hog-tie the Minister of Finance and prevent him or her—whoever it is at the time—from providing or imposing reasonable conditions that might allow the consent to go through but otherwise might not. I just want some flexibility there, which would be the removal of section (4)(b). It doesn’t make a material difference, other than the constraint on the Minister would be removed, which would then allow him or her to just apply the conditions that might identify the risks. I ask the Associate Minister of Agriculture if he could perhaps respond on that one. The officials might have some advice.

I think there’s just another couple of amendments that I’d like to speak to, if that’s possible, Madam Chair? Thank you. I’ve still got some time here. The next one is in clause 21—I’m just going to make sure I get it right, because I do fear that in one of my other amendments, one of the letters might be out of place, which would be horrific.

Hon Rachel Brooking: Horrific!

Hon DAMIEN O’CONNOR: Anyway, yeah, horrific, but it might mean that it might get ruled out. Anyway, we’ll wait and see.

This is on clause 21, replacement section 32—here we go: 18 and 19B. It relates to the delegation in subsection (1), which has the effect that the regulator—sorry, people might be interested; you never know. There might be someone there. This is “Delegation of powers and functions”. It is in the delegation area that I’m talking about. Delegations in subsection (1) have the effect that the regulator may exercise all of the relevant powers and functions—[Interruption]

CHAIRPERSON (Maureen Pugh): I’m sorry to interrupt the member. Can I please have some quiet over here. I can’t even hear. Thank you. We’ll make up the time.

Hon DAMIEN O’CONNOR: Thank you, Madam Chair. I’m sorry if I got too close to the mic—I don’t mean to—I’m just getting down to read it. It’s getting a bit hard to read at this time of night.

Can I just go back—in subsection (2): “The delegation in subsection (1) has the effect that the regulator may exercise all of the relevant powers and functions as if the relevant Minister or Ministers had delegated those powers and functions”, right—“as if”. My amendment says to take out “as”, which would mean that it read “may exercise all of the relevant powers and functions if the relevant Minister or Ministers had delegated those powers”. It’s quite important here. I think delegated powers have to be specified. This would possibly allow non-specific delegations or assumptions around delegations as if they had been delegated rather than having actually been delegated. It is technical. I call on the wisdom of my colleagues in law to know how an astute lawyer might pull this apart, in my view, and challenge those delegation powers. I’m asking that the amendment that I put on the Table be supported to take out “as” and just say “if” the delegations have, in fact, been made.

I’m getting down—and I think I’ve only got another one. I guess there’s a few questions there. The next one I go to is clause 23. I’m just trying to get my head around this one here—new section 37B(5). We’ve got an obligation to process these within 15 working days. That’s not a lot of time. We’ve streamlined it a bit, but I’d suggest that Ministers, particularly with the constraints put on them by the current coalition Government, don’t have excess resource, don’t have the ability to do these things in a very limited timeline. I’m just asking that that be extended to 30 working days. That’s still—in the international scheme of things, to be able to invest in a sovereign country like New Zealand, with rock solid systems—a good deal for any investor. I’m asking that this amendment be supported by New Zealand First as well, that extends the time out from 15 to 30 days to process these applications.

Look, in terms of removing paragraph (b) from new section 25A(4), inserted by clause 18(2), this just creates a requirement to ensure that the condition is proportionate. In terms of the delegation, the regulator currently exercises a sort of default delegation, but the bill empowers the Minister to regain those powers if he/she so desires.

Can I follow on from that, because it’s “if he or she thinks”. The process will be down the track, and the investor will, rightfully, assume that they’ve got the deal done. I’m looking out for the investors as well. What we need is some certainty. If this is a robust process that goes before the Minister and then the final decision is made, then that’s OK, but if we have regulators making a lot of these decisions with some variable oversight because they haven’t had to consider some of the non-mandatory features here, then this is opening it up to litigation. This is the area of concern that Labour in Opposition has—that, actually, supporting efficiency, we don’t want to remove the effectiveness of the regime, which is to protect New Zealand’s interests. It is to develop investment, but it is always to protect the interests of New Zealanders and New Zealand first and foremost. I appreciate the Minister’s response, but I just ask that he consider this carefully.

I move, That debate on this question now close.

I think there’s a little bit left that I’d encourage members to address if they so wish.

Thank you, Madam Chair. I wanted to talk about my proposed amendment to clause 27. This is about the Minister being able to grant individual exemptions. I think there is significant risk to any Government if a Minister is able to grant retrospective exemptions for any “person, interest, right, or assets” from consent requirements from the definition of “overseas person or associate or associated land”. I have asked the Government and the Minister to consider whether having a clause or a provision like this in the law actually opens us up to significant risk in the perception of our transparency. It’s just not good lawmaking to enable retrospective exemptions like this and, arguably, to enable ministerial exemptions at all, let alone retrospective ones.

While I’m up here, I’ll also just refer to my amendment to clause 22, which would delete new section 34(3)(ab). This is about providing a ministerial directive letter that states “the Government’s preferred approach to undertaking a national interest assessment:”. Our feeling is very strongly that national interest assessments should be enduring and not variable based on the views of a particular Minister or Government of the day. Ministers are already decision makers on overseas investment consents; it’s really overreach into our Public Service and their neutrality to then say what the Government’s preferred approach is to a national interest test when they’re already the decision maker on the consents. That’s clause 22 and clause 27.

In terms of clause 27, the provision of the retrospective exemptions is intended to fill a gap in the regulatory tool kit and provide flexibility, giving the regulator more options to address accidental breaches of the law. Companies could well be unaware of an investment regulatory rule and could have inadvertently breached them—so just minor stuff. These will allow the regulator to take a more proportionate approach to compliance.

Look, in terms of—and I’ve already covered this once before—the national interest assessment, as I said at the start, things change over time. Suddenly something’s of much more importance to your national interest than it was a few decades ago and sometimes they no longer become. That’s important that the Government of the day is able to make that judgment.

I think there’s room for one more question.

I thank you very much—you must come from a wonderful place, Madam Chair. This is my last call, and, in fact, it follows on from Julie Anne Genter, and it is my last amendment, because I too share the concerns that she has. The Minister pointed to some of the risks here: that it’s proportionate, the response—that’s dangerous—and if mistakes have been made, then officials can follow it up in the right way. The reality is that this disincentivises investors and potential investors to do the right thing. This must be removed. My amendment asks that new subsections (1A) and (1B) of section 61D be removed, because otherwise we have perverse incentives for people to do the right thing.

The question I have is: would a ministerial directive letter go so far as to influence the proportionate response of these areas? It’s no reflection on the Minister in the chair or anyone else. We have to ensure that we have robust legislation that is not subject to outside influence or people’s personal views that might allow proportionate response to illegal activity. The reality is that this is a response to illegal behaviour—outside the law. If we remove this, then we just simply ensure that both officials and the investors and everyone do the right thing. If the law is broken—if I’m only one or two kilometres over the speed limit, I still get prosecuted, right? Absolutely. This is allowing flexibility that doesn’t occur in many other parts of the law, so, to the Minister, I hope that you can support my amendment that removes these two very dangerous provisions in the legislation.

I move, That debate on this question now close.

The question is that Mariameno Kapa-Kingi’s tabled amendment inserting new clause 3A be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 4, new section 3(1)(a), to replace “or” with “and” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 4, new section 3(1)(c), to insert “Te Tiriti o Waitangi” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 4, new section 3(1)(c), to insert “environmental protection” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 4, new section 3(1)(c), to insert “climate change mitigation” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 4, new section 3(1)(c), to insert “climate change adaptation” be agreed to.

The question is that Dr Lawrence Xu Nan’s tabled amendment to clause 4, deleting new section 3(2) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to delete clause 5A be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to delete clause 6 be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendments to clause 8(1) set out on Amendment Paper 470, to delete new paragraph (ea) of section 16 be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendments to clause 8 set out on Amendment Paper 470, to delete subclause (3) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendments to clause 15, new section 19E(1), set out on Amendment Paper 470, to replace paragraph (a) be agreed to.

Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendments to clause 15, new section 19E(1)(b)(i), set out on Amendment Paper 470 is out of order as not being a serious amendment.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1)(b), set out on Amendment Paper 470, to delete subparagraph (ii) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1)(c)(i), set out on Amendment Paper 470, to delete the words “another qualifying individual;” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1)(c), set out on Amendment Paper 470, to delete subparagraph (ii) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1)(c), set out on Amendment Paper 470, to delete subparagraph (iii) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1), set out on Amendment Paper 470, to replace paragraph (d) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(1), set out on Amendment Paper 470, to replace paragraph (b) of the definition of exempt individual be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(3), set out on Amendment Paper 470, to insert the words “and improved outcomes for environmental protection” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E(3), set out on Amendment Paper 470, to insert the words “and improved outcomes for climate mitigation” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Hon Erica Stanford’s amendment to clause 15, new section 19E, set out on Amendment Paper 470, to delete new subsection (4) be agreed to.

The question is that the Hon Erica Stanford’s amendments to Part 1 set out on Amendment Paper 470 be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 7(4), replacing “must” with “may” be agreed to.

Mariameno Kapa-Kingi’s tabled amendment to clause 11, inserting new clause 11A is out of order as not being in the correct form of legislation.

Mariameno Kapa-Kingi’s tabled amendment to clause 12, inserting subclause (1)(a) is out of order as not being in the correct form of legislation.

The question is that the Hon Julie Anne Genter’s tabled amendment deleting clause 12(2) be agreed to.

Mariameno Kapa-Kingi’s tabled amendment replacing clause 15 is out of order as being inconsistent with a previous decision of the committee.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C, to insert “after consulting with relevant iwi and hapū” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C, to insert “after consulting with the Parliamentary Commissioner of Environment” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C, to insert “after consulting with the Environmental Protection Authority” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19A(3), to insert “unless the direction is contrary to national interests” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under Te Tiriti o Waitangi” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under UNDRIP” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under the High Seas Treaty” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under the Paris Agreement” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under the Convention on Biological Diversity” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s obligation under the Kunming-Montreal Global Biodiversity Framework” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “environmental protection” be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19C(1)(b), to insert “New Zealand’s commitment under sustainable development goals” be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 15, replacing “may” with “must” in new section 19B(1)(c) be agreed to.

The question is that the Hon Julie Anne Genter’s tabled amendment to clause 15, inserting paragraphs (d) and (e) into new section 19C(1) be agreed to.

The question is that the Hon Julie Anne Genter’s tabled amendments to clause 15, deleting paragraph (a) from new section 19C(2) and inserting paragraph (d) into new section 19C(1) be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 15, replacing “may” with “must” in new section 19D(1) be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 15, replacing “may” with “must” in new section 19D(2)(c) be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 15, new section 19D, to insert new subsection (4) be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 18 be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 21, deleting “as” from new section 32(2) be agreed to.

The question is that the Hon Julie Anne Genter’s tabled amendment to clause 22, deleting new section 34(3)(ab) be agreed to.

The question is that the Hon Julie Anne Genter’s tabled amendment to clause 23, replacing “15” with “30” in new section 37B(5) be agreed to.

The Hon Damien O’Connor’s tabled amendment to clause 23, replacing “15” with “30” is out of order as being the same in substance as a previous amendment.

The question is that the Hon Julie Anne Genter’s tabled amendment to delete clause 27 be agreed to.

The question is that the Hon Damien O’Connor’s tabled amendment to clause 27, deleting subsections (1A) and (1B) of new section 61D be agreed to.