Overseas Investment Bill

I am happy to rise on behalf of the National Party to address this part of the Overseas Investment Bill. If commentators on this bill take nothing else out of it, they will know one thing—that is, the tide is going out for this very tired Labour Government. It is on the way out big time when its coalition partner, United Future, will not even support its tired, old Labour policy. Even if Labour does not think that people with property rights should be respected and rewarded, at least United Future was smart enough to understand the issue, and left the Government on its own—on its tod—with nobody else in the entire Parliament supporting it. The Government could not convince the Greens, who are opposed to everything, and it could not convince New Zealand First members, who are opposed to everything in this field. The Government did not get support from United Future members, who could at least see it National’s way. It did not really care about the Progressives, and ACT would not support it on this measure, also for some very good reasons. Labour members were “Johnny-no-mates”, and they have come to Parliament in the incredibly embarrassing position that they cannot even pass their own legislation.

David Parker was quoted in the Otago Daily Times, telling the people of Otago that he had a victory. He said that he had won and declared victory. That reminds me of Michael Cullen and Helen Clark declaring victory a few months ago—well, they are not smiling quite so readily tonight. David Parker will be looking for a new job post - election day, 17 September. He will be looking for a new job, but it will not be in this sort of area. No wonder Government members look a downtrodden and disheartened lot; they cannot even pass their legislation.

I want to refer to one thing that Mr Parker said in the Chamber recently. He took offence that National wanted people who owned something to be paid for it when it was taken off them. Then he said our position was inconsistent because, when it came to the foreshore and seabed issue, we were not prepared to give Māori anything for taking it off them, and that inconsistency was the problem with our position. I hate to tell Mr Parker, but he may not be aware that in National’s view Māori did not own the foreshore and seabed in an exclusive situation. They owned it along with all other New Zealanders, and they have not had anything taken off them. They are in the same position that they were in beforehand regarding the foreshore and seabed legislation.

So Mr Parker might be a bit confused about National members’ position on marginal strips, but we are not confused and we do not intend to send the message to anybody who invests in New Zealand—a domestic person or someone from offshore—that we will somehow legislate to have that person’s property rights taken off him or her anytime we like, just because the people in power think it is a really good idea on the day. We have seen that system operating in various other regimes. It has not worked tremendously well in Zimbabwe and I doubt that it would work terribly well here in New Zealand. So we will not be supporting that notion. [Interruption] That is right.

I do want to refer to the investment in companies that come here from offshore, and I think lifting the threshold does make sense. There are some very sound and credible reasons why foreigners who invest in New Zealand companies can actually add some real value beyond just the capital they invest in those companies. They can bring knowledge and skills and, more importantly, they can bring a gateway to take those New Zealand products and really grow them in offshore markets. I think we sometimes look with far too much scepticism at companies that come to New Zealand and invest. New Zealand is a country born out of entrepreneurs and people with a number eight fencing wire mentality of doing things, and we want to encourage that.

The last point I want to make—if I can make it in the 37 seconds that I have available—is about the purpose of the bill. I think it makes sense. The purpose clause of the bill states that it is a privilege for someone from overseas to buy land in New Zealand, and that when they do so, they should meet and honour some criteria. One of the other things I heard when I sat on the Finance and Expenditure Committee was that all foreigners who invested in land in New Zealand were bad and all New Zealanders who invested in land were good. That is not true; plenty of New Zealanders actually stop access in any form to their land. But foreigners who come here do have to recognise that they are playing in our playground, and that New Zealanders have a right regarding that situation.

It is with some sadness that I speak to the title of this bill, because the bill has gone in the wrong direction, in the Green Party’s point of view, and it has even gone in the wrong direction from the point of view of the Labour members who were on the 2001 select committee inquiry into the activities of the Overseas Investment Commission. In that inquiry, the Labour members and the New Zealand First member backed a number of Green Party recommendations that would have tightened up the control on foreign investment in New Zealand, whereas instead this bill actually liberalises the foreign investment regime. Yes, there is the smokescreen that so-called iconic sites will be more difficult to buy, but nothing in this bill will actually stop them from being purchased by overseas investors, and there is now every encouragement in this bill for foreign investors to come in and buy up more of our land, buildings, and businesses.

I think the complete removal of any land threshold in central business districts is extraordinary. It means that there will now be absolutely no control on land and buildings being purchased in the central business districts of Auckland, Wellington, and Christchurch. Dr Cullen has realised his dream, which is to make New Zealand one of the most liberal foreign investment regimes in the world. This legislation makes us consistent with the United States’ requirements for a free-trade agreement with it, and it brings us into line with what the multinational corporations have been pushing for under the General Agreement on Trade in Services. So the title of this bill really ought to be the “Overseas Investment Liberalisation Bill”, because it does nothing to achieve the stated purpose, which—as the previous speaker acknowledged—is to provide that it should be a privilege for overseas persons to own or control sensitive New Zealand assets.

I have moved one amendment to clause 2, “Commencement”, to ensure that no commencement date appointed by the Governor-General by Order in Council can take effect before 30 June 2006. That is to provide a cooling-off period, if you like, for the Government to think about the merits of this legislation, or perhaps to give an incoming Government that is more progressive in its outlook than this Government the chance to amend this legislation. I think it would be entirely consistent for the Government to support that amendment, because it dragged the chain over the amendments that Winston Peters managed to negotiate some time ago. They were not gazetted during the life of the National - New Zealand First Government nor during the balance of the period of National-led Government after New Zealand First left that coalition. To give some credit to Dr Cullen, he did finally gazette those changes, which have at least required farmland to be publicly advertised for sale in New Zealand before it is flogged off overseas—never mind how small the advertisement is.

It is quite consistent with overseas investment legislation for the Act or regulations not to come into force straight after the Governor-General has signed them. So I would urge other parties to support delaying this legislation until at least 30 June 2006, to provide something of a cooling-off period—a buyer-beware period—so that the people of New Zealand do have the chance to vote on this issue at the election, without the country being locked into a foreign investments regime that means, basically, that we are like the Wild West, but with a sheriff who is working hand in hand with the outlaws rather than on behalf of the good citizens of this country.

I rise to speak to clause 1 of the Overseas Investment Bill on behalf of the ACT party, and I think that the bill is incorrectly named. It should be called the “Attack on Private Property Rights Bill”, because one of the fundamental rights one has when one owns property is to be able to sell it, but here the Government is claiming the right to dictate to citizens about who they can sell it to.

They have not actually given any reasons. Most of the speeches have been incoherent, like Mr Donald’s speech in which he was talking about the good citizens of New Zealand versus the outlaws. What an amazing statement! He is prepared to claim that anyone who is not a New Zealander is an outlaw. If statements like that were being made overseas, he would immediately condemn that as xenophobic, but then with no shame at all he is prepared to make xenophobic statements himself, and also demonstrate a complete lack of history. This country was actually built with overseas investment. This country was built by people who came and invested in this nation, and we still need their capital and expertise today.

I listened also with some confusion to Mr John Key’s speech, because while he was attacking the Government in the Committee stage, it appeared to me that the two old parties were voting together for this piece of socialist—

Hon Member: The great coalition!

Hon RICHARD PREBBLE: Maybe I misunderstood, or maybe Mr Key did not know how his party was voting, but it appeared to me that the two old parties were voting together for this legislation, which is clearly a nonsense. Intellectually it does not stand up. It is correct, as Mr Donald said, that there are some clauses in the bill that will, in fact, result in some liberalisation. But there are other measures for which there is no intellectual or moral basis. If a person selling his or her land is required to provide a walkway for citizens, and if that is desirable, why are only foreigners required to provide that walkway, and not people born in New Zealand? That is a complete nonsense.

Dail Jones: That is the next step.

Hon RICHARD PREBBLE: Maybe it is the next step. From the ACT party’s point of view, if the community wants to own a piece of land, then the community should pay for it. To just take it, is communism. That is socialism. I am amazed—well, actually I am not amazed. I would like to think that one should be amazed that the National Party is voting for such a measure, but I am not, because the National Party members were going around the country today saying they were opposed to attempts to take farmers’ land, and then we have Nick Smith’s bill—and Nick Smith should actually be in the Alliance—which is a socialist measure. That was being put forward.

The party that has been—and I think it would be fair enough to say this in the House—consistently in favour of private property rights does not believe in this type of intervention, and says that it is morally wrong that this Parliament has no moral right to be placing restrictions on citizens’ private property rights—

Gordon Copeland: That’s United Future

Hon RICHARD PREBBLE: Well, I have not actually noticed United Future being consistent on that matter. I think, in fact, the only party that has been consistent on that question has been the ACT party. I have looked at the minority reports, and I do not see a minority report from United Future making a strong stand on behalf of private property rights. Indeed, I have not been hearing such speeches on behalf of them. I hear Mr Peter Dunne making speeches on behalf of some sort of outdoor group that claims to have the right to trample over people’s private property rights. Am I right there, Mr Copeland?

Gordon Copeland: Fourth paragraph, page 11.

Hon RICHARD PREBBLE: Fourth paragraph, page 11.

Rod Donald: No heading.

Hon RICHARD PREBBLE: Fourth paragraph, no heading. What does it say, Mr Copeland?

Gordon Copeland: I have read it out to the House.

Hon RICHARD PREBBLE: Oh, the member has read it out to the House. Does the member want me to read it again? All I can say is that it is so pathetic I cannot even find it. What I am interested to know is, and given all these speeches, how is this bill going through? The National Party is opposed to it. The Greens are opposed to it. The United Party—

Brian Connell: National is for it.

Hon RICHARD PREBBLE: I heard Mr Key say he was opposed to it. Now if he is going to vote the way that he says he believes, how can this bill be passing? There must be some extraordinary mathematics going on.

Thank you for a call on the title clause of this bill. One knows, when one looks around this Chamber, that a Government is on its way out when it is relying on people like the Greens, who want to stop all investment in this country, to come not into caucus but into Cabinet with it. Then it wants the same Cabinet to coalesce with the Māori Party, which wants to send everyone out of New Zealand. The Government expects that it will then have the support of a nation, and wonders why the tide is going out for it.

Mr Prebble said he was confused. I cannot speak for Mr Prebble’s state of mind, but what I can say is that if Mr Prebble had been here throughout the course of the debate he would have known that National was strongly opposed to the bill before Supplementary Order Paper 376 was tabled, which precludes the Government annexing private property without even offering compensation. So with that cleared up, I am sure that Mr Prebble will accept that investment in this country through foreign capital is what this country needs, and to send signals that that is not important, as the Green Party is doing, supported by the New Zealand First Party, would be totally unacceptable.

Now we have some Luddites here who are trying to turn the clock back. After years of market reform through the 1980s and 1990s we now have a strong-performing economy that people want to invest in. That is a vote of confidence in this economy, and we should embrace people who want to come to this country and invest here. Capital creates jobs, prosperity, and confidence. I tell Mr Donald and others that if we want to share wealth then first we have to create it, and creating it depends on getting capital and on getting people to invest their hard-earned dollars in things like infrastructure and property.

Dail Jones mounted an argument earlier in the debate that all investors coming to New Zealand are large companies, and they are going to suck every bit of goodness out of this country. They are here just to rape and pillage. Well, I have to say to Mr Jones that the vast majority of foreign investors in this country are not—

Peter Brown: The member admits that there are some people of that view.

BRIAN CONNELL: Well, yes, New Zealand First members are of that view. We are in agreement.

The majority of investors who come to this country are small investors who come here to live, and to invest their time and their money—they have kids—exactly the same as Mr Jones and Mr Brown did not so long ago. It is good enough for them, but they want to chase everybody else away. Reasonable people know that in order for New Zealand to continue to prosper we need capital. Throughout the course of this debate I have given numerous examples where foreign capital has created infrastructure and jobs for hard-working New Zealanders. I do not think that people listening to Mr Jones talk about the people who have risked their capital to create jobs will agree with his argument that foreign investors do not create any value in New Zealand. That is an absolute nonsense. I know that when Mr Jones was saying it, he had a smile on his face, but unfortunately people listening across New Zealand cannot see the smile on his face, and some—a very small number admittedly—might in fact take him seriously, which would be a travesty.

The other thing that has been noted throughout the course of the debate is that a number of investors have come here and bought high-country stations. Well, that is a crime, is it not? That is an absolute crime. The hysteria is that they will close all the roads up.

Having been drawn into the debate, I could not resist a call, and if I have a smile on my face it is because, really, the National Party just cannot understand what happens when people invest $50 or $100 million in New Zealand, as the previous National speaker mentioned this afternoon. They invest that much money in New Zealand to take control of companies for the benefit of their overseas shareholders. They may export goods, but they also export the profits. The profits do not stay in New Zealand. The profits go overseas. [Interruption] Mr Carter and Mr Connell can laugh. Overseas shareholders want their money sent to them overseas. It is elementary. It is as simple as that, but the National Party just cannot understand that situation at all.

The National Party says, “What about investment in New Zealand?”. New Zealand First supports New Zealanders investing in New Zealand products. The way we say that should be done, of course, is through the New Zealand Superannuation Fund—something the National Party opposed constantly and vigorously until it did one of its flip-flops and now supports it. But if we want New Zealanders to invest, they have to save, and one of the ways in which they save is through the superannuation fund. That is how one gets New Zealand investment in New Zealand businesses and how the profits are kept in New Zealand. What is bleeding New Zealand to death, and will bleed New Zealand to death, is that if the world economy changes, all the money goes overseas in profits and does not stay here. We have seen it before in New Zealand on many, many occasions in New Zealand’s fiscal history, but the National Party just cannot see it at all.

What we have here tonight is a clear example of the two old parties, as Mr Prebble was saying, searching for a coalition partner. When one thinks about it, one realises that Labour’s best coalition partner, on tonight’s performance, is the National Party. I do not know why the commentators have not woken up to that. Mr Connell talked about the market reforms of the 1980s and the 1990s with the greatest enthusiasm. Those were the Labour reforms of the 1980s and the National reforms of the 1990s, and now he wants to get in bed with the Labour Party. The polls show—and that is what he was looking at—that that is the only way the two of them can get into Government. One has to add up the two parties’ totals. If one adds either of them to any one total of the other parties, neither of them can do it. Members know how much the Labour Party loves power and how much the National Party loves power, and, boy, they will do just about anything to share that power or to have that power.

Some of the commentators should look more closely at what is happening in this House, especially on bills like this, when members of each party talk about how successful the reforms of the 1980s and the 1990s were. Those parties are positioning themselves as they look at the way in which the leadership poll results change. Some people go up all the time and some people come down all the time. It is interesting to see how the National Party and the Labour Party are positioning themselves for a situation that might arise after the election. It is so important for the people of New Zealand to realise that if those two parties got together again, as they did with the 1980s and 1990s reforms, New Zealand will be in trouble. As I said, the only way that can be prevented is by New Zealand First being two or three times stronger in this House after the next election. We were founded on the mistakes of the National Party and the Labour Party in the 1980s and the 1990s, and I think that Mr Connell has given away the game tonight.

Chairman Mao of former Communist China would have been proud to have Dail Jones as a member, because in those times China closed its door to foreigners absolutely. Chairman Mao would have been proud to hear that speech from Dail Jones. I wonder whether Mr Dail Jones is also telling the public that New Zealand First does not want to be in power—as he has apparently just declared. New Zealand First has already declared itself to be in a permanent Opposition position. That is interesting.

As a member of the Finance and Expenditure Committee I would like to share the views of some of the submissioners who came before that select committee who believe that this bill has gone too far. I particularly want people to hear from a very important group—and my learned colleague the Hon David Carter would agree—Federated Farmers. I think they put a very credible counter-balance to the overwhelming submissions opposing the bill that came before the select committee. They were very, very anxious about the lack of overseas investment. Federated Farmers shared that with us. They are a very reputable group that we all know.

Farming is the backbone of the New Zealand economy. They were saying that people build up a business in a farm through their lives, so do we want to deprive them, when they reach the well-earned retirement stage in their life, of getting the best price for their hard work of building up their business? The Greens would, Labour would, and New Zealand First would, because they want to shut out people’s options. Any New Zealand - owned businesses and landowners can sell to anybody. They do not have to sell to foreign investors. They have the absolute freedom to choose who they sell to.

It is wrong for the Government to restrict that right—to artificially put in legislation and say that people should not be allowed to sell their hard-earned businesses that they have built up over a long period of time to the best offer. But what the Government does need to do is to introduce legislation that puts down criteria so that if overseas—or even domestic—investors want to purchase properties and businesses they will be subject to legislation and will have to conform to conditions. I think it is fair that people who enter a transaction should give an undertaking and be held to fulfil those conditions. That is why National has supported this legislation after the sensible Supplementary Order Paper to remove the creation of marginal strips without compensation was tabled during the Committee stage.

I hope I have shared with the members of the Committee, and, also, the public who are listening to this debate, that it is a matter of striking a balance. No Government has the right to restrict New Zealanders who have built up a business or who own a piece of property from accepting the best offer, given that the purchaser will have to fulfil a set of conditions. That is a pretty balanced outcome.

It is a very emotive issue. A large number of submissioners came before the Finance and Expenditure Committee. I emphasise once again that a lot of those negative feelings were generated because they felt that the law was not being enforced.

I rise to support the bill and to follow from Pansy Wong’s good contribution with another rationale, before other members—particularly Dail Jones—speak, as to why National supports this legislation now it has been amended. I refer to the process by which foreigners have the opportunity to buy land in New Zealand—[Interruption]—and that, for the benefit of Craig McNair, is an absolute privilege. Having been lucky enough to invest in New Zealand, they do so on the conditions imposed by New Zealand law and by the rules at the time of the Overseas Investment Commission.

What I have found particularly galling are the many cases in which foreigners have been allowed to purchase in New Zealand under conditions imposed by the Overseas Investment Commission, and then have completely thumbed their noses at the impositions imposed on them at the time they were given permission. I understand that this legislation significantly tightens the enforcement provisions. That is necessary because some foreign investors coming to this country have not been prepared to abide by the rules, and the legislation that existed previously meant that it was difficult for New Zealand to do much about that.

My second point is particularly in response to the very interesting commentary from Dail Jones when he argued that we do not need foreign investment and that there is suitable capital in New Zealand to provide all the investment capital that this country needs. I suggest to that man that he should get real. Capital in this world is in very short supply, and New Zealand must develop by attracting capital. We know that New Zealanders have historically not been good savers and I do not see that in the foreseeable future they would ever be in a position to provide enough capital by themselves. In other words, if we are to progress this economy, foreign investment becomes essential.

I refer now to some of the papers tabled before the Finance and Expenditure Committee, which show that over the last 3 years the number of people interested in applying to invest in New Zealand has continually declined. That is something the Minister at present in the chair, the Hon Dr Michael Cullen—the Minister of Finance—should take particular note of. He accepted my argument a minute ago that this country was in need of foreign capital. Therefore, questions need to be asked as to why there was considerably more interest in foreign investment in New Zealand in 2002 than there was in 2003, while there was considerably more interest in 2003 than there was in the last year for which we have figures—2004. I suggest to Dr Cullen, as the Minister of Finance, that an issue associated with declining confidence in overseas investment is the legislative framework imposed by this country not only on foreign investors but also on New Zealand investors. I refer to issues such as the ratification of the Kyoto Protocol, which we now find to be a miscalculation by Pete Hodgson of somewhere between $1 billion and $3 billion.

Brian Connell: That’s good maths!

Hon DAVID CARTER: The maths are fascinating in themselves, but the really interesting thing is the risk that it now puts this economy in for future generations. I happened to see Pete Hodgson rambling on in a TV interview tonight, saying that the reason the Government had ratified was for future generations of New Zealanders. He has now saddled New Zealand with such a huge international commitment that he is risking the very standard of living not only of future generations of New Zealanders but also of current New Zealanders.

The other point I want to comment on is the fascinating provision that has been completely removed from the bill following its process through the select committee. It is the issue whereby the bill had suggested we should take the opportunity, as part of the approval process for foreigners purchasing land, of ensuring that public access is guaranteed by the creation of marginal strips. I have some sympathy for doing that. Provided it is upfront and explained to investors before they purchase in New Zealand, it could become part of the rules that they fulfil for the privilege of being a landowner in this country.

We have had three speeches from National Party spokespeople and I can say that I do not think any of them understand what they are talking about—not one. I listened very carefully to all three members and they advocate an open-door policy to anybody coming here with a suitcase full of money, which will enable such people to buy anything they want. That is effectively what those members said. [Interruption] Does the member disagree with that?

Hon David Carter: Absolutely.

PETER BROWN: Thank you. Then what—

Brian Connell: Read the Hansard.

PETER BROWN: I have read the member’s Hansard—well, I listened to his speech. Let those members answer this question: are they prepared to put any restrictions on foreign capital coming in?

Hon David Carter: That’s what this bill does.

PETER BROWN: I know what it does. What those members are saying is that because we do not accept this bill and we are not drawing the line in the same place as they are, then we are—what did the member call us? Was it “Mao Tse-Tungites” or something? The fact is that we are not drawing the line where those guys are drawing the line. Of the three speeches made by the members who are sitting there in sanctimonious glory, Brian Connell was the winner. He made the most stupid speech of all of those members. He said, effectively, that people could come here, buy the land, and live anywhere else in the world. I say to members that if we go back a few years, this was a high-wage economy in which one could afford to sell land, knowing that New Zealanders could compete for it. But they are prepared to put land on the world market, knowing that New Zealanders cannot compete for it.

Brian Connell: Oh, poppycock.

PETER BROWN: By and large they cannot compete for it. There are a few who can compete for it, but by and large the average New Zealander cannot buy a house or a farm in some areas of New Zealand if they are put on the world market, and those members well know that.

Brian Connell: Build a wall.

PETER BROWN: I tell my good friend that we are not building a wall. He has already admitted that he wants some restrictions. We are just telling him that he has not worked out where the restrictions should be.

Brian Connell: Build a wall! Keep them in.

PETER BROWN: If the member says during the election campaign that he wants to enable anybody to come to this country and buy anything from anybody, I will say to him that he has got it totally wrong, and the average New Zealander will say to him that he has got it totally wrong.

New Zealand First stands for restrictions and controls on people who want to invest here. We say that unashamedly. We have seen this country sold to the lowest bidder—let alone the highest bidder—and members opposite were part of it. That crowd—despite saying that no ifs, buts, no maybes, they would change the lot—carried on. In 1984, $16 billion worth was sold in this country. Can members tell me one benefit that we have got from that? We have had to buy back our airline and our railways.

Hon Richard Prebble: No, we didn’t. We didn’t have to buy it back.

PETER BROWN: At least one member realises that we did not have to buy it back, but, if we wanted it, we had to buy it back.

We could have let Air New Zealand go to the dogs. We could have let Tranz Rail go to the dogs. It might be too late—it might have already gone to the dogs. The crowd sitting behind me here are saying: “Let ’em come in. They’ve got a suitcase of money, let ’em come in and they can buy anything we have for sale.” I had thought that the Labour Government had learnt from its experiences. Clayton Cosgrove puts his hands up. He may treat this as a joke but I can tell him that there are many people in his electorate who will agree totally with New Zealand First. They are sick and tired of someone planting a for sale notice in the land of New Zealand and saying: “Come here and buy it.”

It may not have been Richard Prebble, but I have certainly heard ACT members say that the land cannot go away. Dr Cullen said that the land cannot go away, but for the average New Zealander in many cases that is just what happens. It goes away. It might as well be 12,000 miles away, as average New Zealanders will not be able to afford to compete on the open market.

Hon Dr Michael Cullen: When did the average Kiwi own a high-country farm? Ha, ha!

PETER BROWN: The member laughs. He might laugh a little bit later when he gives the low-paid people their 67c and tells them to go and buy the land they want and have saved up for, when foreigners come in and buy it at some exorbitant sum. I can tell the Committee about a situation where a house was sold on the Internet at three times its value.

I move, That the question be now put.