A review of the overseas investment regime is likely to look at how to stop the sell-off large tracts of land to foreign buyers, Prime Minister John Key indicated today.
The review was started by Finance Minister Bill English in March last year and aimed at:
* making changes so applications to the Overseas Investment Office (OIO) could be done more quickly;
* considering changes to the Overseas Investment Regulations;
* and looking at the scope of the overseas investment screening regime generally -- for example whether screening thresholds which determine the sorts of land considered 'sensitive' should be changed.
The focus on the review has changed with publicity about the possible sale of the large Crafar farms business to Hong Kong-based based company Natural Dairy. The OIO is yet to make a decision on that.
Green Party co-leader Russel Norman yesterday released a member's bill he drafted to remove the ability of foreign buyers to purchase sensitive land.
Dr Norman accused Mr Key of sending mixed messages by having the review to loosen up rules while expressing concerns that he did not want New Zealanders to become tenants in their own land.
Mr Key said that was extreme, but agreed the issue needed to be looked at and he expected the review to take it in.
"The minister is turning his mind to that issue and whether it forms part of this review or whether it's subject to further review is something I will need to take up with the minister," Mr Key said.
Pressed if that meant a further review, Mr Key said: "I think the minister probably will address that."
The review is expected to be completed some time next month.
Mr Key said the work around processes was done, but issues around definitions of sensitive land were still being worked through.
Mr English said farmers were burdened by debt so overseas investors were probably finding farmland relatively cheap. While that was cyclical, he would be worried by a permanent shift in that direction.
The issue of farmland sales to foreign investors had forced the Government to give the review more consideration.
"The farmland issue has come up reasonably recently and we trying to get a handle on how big an issue that might or might not be," Mr English said.
"What I think we need to do is work out what the harm could be before we jump to any conclusions."
He said it was "tricky territory" because on the one hand things that were important to New Zealanders needed to be protected, while on the other hand "because we don't save enough in New Zealand we need capital to coming in to create jobs".
Labour leader Phil Goff said foreign investment was necessary for New Zealand but there were strategic assets and sensitive areas, like land, where there needed to be greater control. The benefit of selling land to foreign ownership should be shown before any sale, he said.
NZPA and NBR Staff
Tue, 27 Jul 2010