3. Hon DAVID PARKER (Labour) Link to this
to the Minister of Finance
Will he guarantee that any changes flowing out of the review of overseas investment rules ensure that key strategic assets can remain in New Zealand ownership?
Hon BILL ENGLISH (Minister of Finance) Link to this
Yes. The new rules will ensure that key strategic assets can remain in New Zealand ownership. The overseas investment changes the Government is proposing strike the right balance, making overseas investment simpler and therefore more attractive while still protecting New Zealand’s most sensitive land and assets. The Government will address any public concerns in this area by requiring overseas investors to meet additional requirements to those for domestic investors. In addition, we will consider a new national-interest test similar to that used in other countries as a final reserve power.
Can the Minister guarantee that his changes will not allow Auckland Airport and other strategic assets to be taken out of New Zealand control?
I can guarantee, in the same way as occurred under the previous Labour Government, that anyone proposing to invest in Auckland Airport will have to go through the overseas investment screening regime. That regime will include passing a good-investor test and a national-interest test.
Does the Minister support the commitment given by John Key that a National Government would not allow overseas buyers to invest in strategic New Zealand assets if that investment tipped foreign ownership over 50 percent?
As I have said today, the Government is looking at using a national-interest test instead of a strategic-asset test, because we believe it is too confusing and difficult to define exactly what a list of strategic assets might be. Our own stocktake has indicated that there are already existing protections, such as the ownership restrictions on Telecom or New Zealand supervision of Australian banks. Most other assets that really matter, such as the Cook Strait cable, are in public ownership and will remain in public ownership.
We have reviewed overseas investment rules because in this recession and coming out of it New Zealand will need to attract overseas investment. New Zealanders do not save enough to be able to source all investment in New Zealand. Without new investment there will be no new jobs. We are reviewing rules that have become unnecessarily complex, so that the processes are quicker and more decisive but the protections New Zealanders are looking for remain in place.
Peseta Sam Lotu-Iiga Link to this
What progress can the Minister report on the Government’s review of overseas investment rules?
First, we have picked up some policy work that began under the previous Government to delegate more minor decisions to the Overseas Investment Office. Second—again, in line with previous proposed policy changes from the Labour Government—certain types of transactions will be exempt from requiring consent under the Overseas Investment Act. Finally, officials are now completing work on how the Overseas Investment Act itself can be improved. We believe it can be improved because over the last 10 years 98 percent of overseas investment applications have been approved, and only 2 percent have been turned down. We want to make sure that the rules target genuinely sensitive assets and do not put a whole lot of investors through an unnecessary process.
Under the New Zealand - interest test that the Minister referred to in a prior answer, will he decline the sale of infrastructure assets where monopoly profits arise, as the Commerce Commission recently found exist in the electricity sector; how can he deny that those billions of dollars of monopoly profits, which are bad enough in themselves, will otherwise be lost to the New Zealand economy, with New Zealanders becoming poorer?
Monopoly profits are no more acceptable if the monopoly is owned by the Government than if it is owned by anybody else. The first solution is to make the electricity market more competitive, and my colleague the Minister of Energy and Resources has lodged a major review of the electricity market. He is interested in protecting consumers from unnecessary price increases.
Dr Russel NormanWhy did the Minister state in a release dated 17 March 2009 that “A Technical Reference Group will be established to advise officials on the practicality of any amendments to the Act” when the previous Minister for Land Information, Richard Worth, had already chosen this group, who were all corporate lawyers, and had sent thank you letters to the members of this group a week earlier?
I cannot give the member a detailed explanation of the sequence. However, that group provided valuable advice on the actual process that applications go through. The advice may lead to the Government putting up policy proposals to simplify the process while maintaining the protections that New Zealanders want to see.
Does the Minister agree that it is a privilege, not a right, for an overseas person to buy New Zealand land; if so, why is he diluting the current controls on the sale of rural land, given the different attitudes of some overseas owners to allowing access across their land to rivers, lakes, and mountains?
I believe it is a privilege for anyone to own land. If people own land, they should take the role of stewardship seriously so they can hand that land on to others in better condition than in which they received it. In respect of public access, the Government’s proposals will explicitly require a higher standard from overseas investors than from domestic investors. However, if we are worried about public access, then there are the tools of domestic policies, such as district plans, whereby people can and should influence the availability of public access. It is not an issue only when an overseas investor owns the land.
What was the reasoning behind there being no public announcement regarding New Zealand’s overseas investment rules being rewritten by five corporate lawyers whose firms work for overseas investors? Why did Richard Worth’s office instead advise placing the names of this group on the Treasury website in “a non-highlighted manner”?
The rules are being reviewed by the duly elected Government of New Zealand, not some group of advisers. The group has given some advice to the Government and we have taken some parts of that advice and rejected other parts. The proposals are out in the public arena today.
I seek leave to table a few documents in relation to this matter. The first is the press release from Mr English of 17 March, in which he says that a technical reference group will established.
Mr SPEAKERLeave is sought to table a press release from the Hon Bill English. Is there any objection? There is objection.
I seek leave to table a letter from Dr Richard Worth, former Minister for Land Information, to Don Holborow from Simpson Grierson, thanking him 5 days prior to the press release from Mr English for agreeing to join the panel.
I seek leave to table a letter from Dr Richard Worth to Garth Sinclair from the corporate lawyers Russell McVeagh, thanking Mr Sinclair for agreeing to join the reference group. The letter is dated 5 days prior to Mr English’s press release.
I seek leave to table a letter from Dr Richard Worth, former Minister for Land Information, to Tim Williams from Chapman Tripp corporate law firm thanking him for agreeing to join the reference group. The letter is dated 5 days prior to the Minister’s press release.
I seek leave to table a letter from Richard Worth to Andrew Petersen of the corporate law firm Bell Gully thanking him for agreeing to join the technical reference group on overseas investment dated 12 March, which is 5 days prior to the press release.
I seek leave to table the fifth letter, which is to Andrew Monteith of Minter Ellison Rudd Watts corporate law firm from Richard Worth, thanking him for agreeing to join the panel. It also is dated 5 days prior to the Minister’s press release announcing that a panel was going to be set up.
Finally, I seek leave to table an internal email from Richard Worth’s office in which his office says that there is to be no announcement of the technical reference group and that the material is to be placed in a non-highlighted manner on the website.