Some readers might be surprised to learn from Associate Finance Minister David Parker that the law has been changed to ensure forestry conversions by overseas investors benefit New Zealand.
Did the law previously allow forestry conversions by overseas investors that would be to the country’s disadvantage?
Not necessarily.
Previously, overseas investors wishing to convert land, such as farm land, into forestry were required to meet the “special forestry test.”
Parker described this as a “streamlined” test, designed to encourage investment in production forestry.
The Overseas Investment (Forestry) Amendment Bill – which has just passed its third reading – requires overseas investors to show their conversions will benefit New Zealand by meeting the stricter “benefit to New Zealand test.”
The law change applies only to conversions and does not affect overseas investments in existing forestry land, which will continue to go through the special forestry test.
Broader work is underway to investigate the impacts of forestry conversions more generally.
The press statement recording the change was posted on the Beehive website along with news from …
But let’s get back to David Parker‘s slice of the action and the change to the overseas investment law.
He acknowledged rural communities’ concerns about the potential environmental, economic and social impacts of farm land conversions to forestry.
He also acknowledged the economic importance of the forestry sector.
The sector is a major contributor to the economy, jobs and rural communities. It employs about 40,000 and is the country’s fourth largest export earner.
The Bill also includes minor and technical changes to improve the operation and effectiveness of the Overseas Investment Act’s forestry provisions.
The Overseas Investment Act that has been amended is New Zealand’s main tool for regulating foreign investment. Its two purposes are to:
Section 10 of the Act requires overseas persons to obtain consent before investing in “sensitive land”.
Schedule 1 defines sensitive land as including any non-urban land of more than five hectares. This covers most agricultural land in New Zealand.
The “benefit to New Zealand” test
Generally, investments in sensitive land must satisfy the “benefit to New Zealand” test in section 16A(1). The relevant Ministers (or their delegates in Land Information New Zealand) must consider whether the overseas investment is likely to:
When applying the test, Ministers compare the proposed investment to a “counterfactual” (the current state of the land).
They must also “take a proportionate approach,” which means that greater benefits must be demonstrated for investments in land that has greater sensitivity.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
Parker described this as a “streamlined” test, designed to encourage investment in production forestry.
The Overseas Investment (Forestry) Amendment Bill – which has just passed its third reading – requires overseas investors to show their conversions will benefit New Zealand by meeting the stricter “benefit to New Zealand test.”
The law change applies only to conversions and does not affect overseas investments in existing forestry land, which will continue to go through the special forestry test.
Broader work is underway to investigate the impacts of forestry conversions more generally.
The press statement recording the change was posted on the Beehive website along with news from …
* The health front: New gadgets known as BioStickers – which are being used in several countries – are being trialled here to see what they can do for New Zealanders.
We would be surprised to hear they fail to bring the same benefits to us that they bring to others – but who knows?
All going well, they should enable patients to spend less time in hospital by monitoring them at home.
BioStickers are 85mm long, made of soft flexible material and are worn on the upper left chest. They capture data such as skin temperature, heart rate and respiratory rate to be transmitted to the medical professionals who are treating the patients.
* The education front – The government has announced new “action plans” to improve student achievement. Most readers should have a fair idea of what is intended by The Literacy, Communication and Maths Strategy action plans. The other one is Hei Raukura mō te Mokopuna (Te Reo Matatini me te Pāngarau).
Associate Education Minister Jan Tinetti said the changes to the way the government supports the teaching and learning of literacy and maths include the introduction of a standard teaching model (common practise model) which will mean that teaching in these areas is consistent. It also will ensure that teachers are well supported to deliver teaching and learning that fits their learners’ needs.
This suggests teaching in those areas until now has not been consistent and that teachers have not been well supported. If that be so, it’s about bloody time…
* The pandemic front – New Zealand has provided seed funding of NZ$2 million for a new World Bank initiative to help developing countries prepare and respond to future pandemics. We will be a founding donor of the new Financial Intermediary Fund which is expected to be operational by October.
Funds will be channelled through UN bodies, multilateral development banks and other agencies, and will be invested in areas like laboratory systems, disease surveillance, emergency management and communication plans.
Foreign Affairs Minister Nanaia Mahuta said the support for this global fund aligns with the government’s priorities in the Pacific, where we have a focus on building resilience, supporting collective action, and growing the capacity of partner countries.
A new multilateral fund had been a key recommendation of the report of the WHO-mandated Independent Panel on Pandemic Preparedness and Response (IPPR), co-chaired by former New Zealand Prime Minister Helen Clark.
# More information can be found on the World Bank website: Fact Sheet: Financial Intermediary Fund for Pandemic Prevention, Preparedness and Response (worldbank.org)
But let’s get back to David Parker‘s slice of the action and the change to the overseas investment law.
“The existing rules did not give decision-makers enough discretion to determine the appropriateness of investment in a forestry conversion and whether it benefits this country,” David Parker said.
He acknowledged rural communities’ concerns about the potential environmental, economic and social impacts of farm land conversions to forestry.
He also acknowledged the economic importance of the forestry sector.
“I want to be very clear to the sector and to investors: production forestry is and will remain important, both to the regions and to support our climate change goals.”
The sector is a major contributor to the economy, jobs and rural communities. It employs about 40,000 and is the country’s fourth largest export earner.
“This Bill is not about stopping investment in the forestry sector. It ensures that any investment is beneficial to the country. Productive and sustainable investment is and remains welcome.”
The Bill also includes minor and technical changes to improve the operation and effectiveness of the Overseas Investment Act’s forestry provisions.
The Overseas Investment Act that has been amended is New Zealand’s main tool for regulating foreign investment. Its two purposes are to:
* acknowledge that it is a privilege for overseas persons to own or control sensitive New Zealand assets, and therefore require them to meet certain requirements or adhere to certain conditions when investing in those assets
* manage certain risks, such as national security and public order risks, associated with transactions by overseas persons.
Section 10 of the Act requires overseas persons to obtain consent before investing in “sensitive land”.
Schedule 1 defines sensitive land as including any non-urban land of more than five hectares. This covers most agricultural land in New Zealand.
The “benefit to New Zealand” test
Generally, investments in sensitive land must satisfy the “benefit to New Zealand” test in section 16A(1). The relevant Ministers (or their delegates in Land Information New Zealand) must consider whether the overseas investment is likely to:
* result in economic benefits for New Zealand
* result in benefits to the natural environment
* continue or improve access to that land by the public
* continue or improve protection of historic heritage on that land
* give effect to or advance a significant Government policy
* involve oversight of, or participation in, the investment by New Zealand individuals or entities
* have consequential benefits to New Zealand.
When applying the test, Ministers compare the proposed investment to a “counterfactual” (the current state of the land).
They must also “take a proportionate approach,” which means that greater benefits must be demonstrated for investments in land that has greater sensitivity.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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