10. SUE KEDGLEY (Green) Link to this
to the Minister of Finance
Does he agree that there are important strategic assets that should be kept in New Zealand control; if so, how does he propose that this is achieved?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes; that is why Labour has retained, and will retain, ownership of major strategic assets, as well as buying back the rail network and majority ownership of Air New Zealand.
Is he aware that many countries in the world have explicit legislative powers that enable them to retain key strategic assets in national ownership, and does he believe that it would be useful if the New Zealand Government had similarly explicit powers to enable it to decline the takeover of a key strategic asset if it were considered to be in the national interest; if not, why not?
Hon Dr MICHAEL CULLEN Link to this
Legislation around these matters varies considerably across developed democratic societies. In New Zealand these matters are governed by the Overseas Investment Act, and generally speaking an application for the purchase of a strategic asset would trigger a set of national interest tests under the Overseas Investment Act. The member is shaking her head. I am afraid that as long as sensitive land is concerned, then the test is in fact one that involves those national interest tests. It is highly likely that almost any strategic asset would involve some element of land that comes within the “sensitive land” definition, because it covers many, many different categories. If I can just correct the member on the matter she raised previously, I am perfectly free to comment on the matter in relation to Auckland airport. Because I am a shareholder in Air New Zealand I am not free to be the Minister making the decision under the Overseas Investment Act.
Hon Brian Donnelly Link to this
Is the Minister aware of the potential influence on the Dubai deal that could arise from the shareholdings of the Accident Compensation Corporation (ACC) and the New Zealand Superannuation Fund that, when combined with the Auckland local authorities’ holdings, are large enough to reach the 25 percent threshold needed to prevent the deal, and does Labour’s favouring of both councils retaining their stakes extend to the holdings of ACC and superannuation funds; if not, why not?
Hon Dr MICHAEL CULLEN Link to this
If I deal just specifically with the Superannuation Fund: the legislation covering that fund would quite clearly prevent the Government giving an instruction to the Guardians of New Zealand Superannuation about divestment of that particular asset. I am afraid this is a case where the general rule about political interference in the management of that fund is more important than the specific issue around a particular asset.
Can he confirm that the national interest clause relates to only the sale of sensitive land and that this is a technicality that may or may not permit the Government to decline the sale of a key strategic asset, and it would therefore be useful if we had explicit legislative powers that enabled the Government to turn down the sale of a key strategic asset if it were considered to be in the national interest?
Hon Dr MICHAEL CULLEN Link to this
I think it is useful that the issue could be explored. In the case of Auckland International Airport it is absolutely clear that the “sensitive land” test is triggered for any number of different reasons, and it would meet that test on a number of different criteria. It clearly involves, for example, land bordering foreshore and seabed, it is over a certain size, and it is more than a certain value; there are many different ways in which the airport sale would come within the “sensitive land” test. As I said, I would expect that most matters that are strategic assets, because of the very broad nature of the “sensitive land” test would be likely to trigger it.
Is he concerned that in the absence of clear legislative powers to restrict or decline the takeover of a key strategic asset, it could fall into the hands of foreign Governments, as would be the case, for example, with the Auckland International Airport, since, of course, Dubai Aerospace is owned by the Government of Dubai?
Hon Dr MICHAEL CULLEN Link to this
My understanding is that the Government is one of the owners of Dubai Aerospace, not the only owner of Dubai Aerospace, and clearly there are issues surrounding that. It would be hard to say why that would be necessarily worse than falling into the hands of a multinational oil company; or, worse still, an overseas company that might be involved in genetic modification experimentation, which I feel would be even higher on the list of potential sins for owners of an airport.
Can he confirm that, contrary to what the member from New Zealand First said, the Green Party presented a 7,000-strong petition 2 years ago, calling for tighter restrictions on foreign investment when the Overseas Investment Act was being considered; and why was it that the Government and New Zealand First opposed a series of amendments by the late Rod Donald that sought to tighten restrictions in the Overseas Investment Act and to require the national interest to be considered before selling significant business assets?
Hon Dr MICHAEL CULLEN Link to this
I think it is significant that in that question the term has moved from “strategic assets” to “significant business assets”. I think the problem in any issue of this sort is defining exactly what one means. One can quickly slide from Auckland International Airport, which clearly is a strategic asset, to one’s local organic potato patch, which might not be a strategic asset in an understanding of a broader definition.
I seek leave to table the Overseas Investment Act, which says that one can buy sensitive land, provided—
Madam SPEAKERI seek leave to table the petition by 7,000 New Zealanders calling for tougher rules on foreign investment.
I seek leave of the House for the Overseas Investment (Restriction on Foreign Ownership) Bill in my name to be introduced and put down for its first reading.