Associate Finance Minister David Parker and Land Information Minister Eugenie Sage are strengthening New Zealand’s overseas investment regime.
The directive letter to the Overseas Investment Office set out the Government’s policy approach to overseas investment in rural land.
Mr Parker said the existing directive was too loose. It only applied to very large farms, more than 10 times the average farm size.
In practice, it meant restrictions in sales generally applied to sheep and beef farms of more than 7146ha or a dairy farm of more than 1987ha.
The new directive tightened how overseas investment was assessed in New Zealand to ensure authorised purchases provided genuine benefits.
"Too often we see investors buy a New Zealand farm and then use existing systems, technology and management practices which don’t substantially add anything new, or create additional value to our economy."
The Government wanted to make it clear it was a privilege to own or control New Zealand’s sensitive assets and the privilege must be earned, Mr Parker said.
The new directive replaced the existing large farm directive with a new and broader rural land directive that applied to all rural land larger than 5ha, other than forestry.
Federated Farmers supported the Government’s plans to ensure the net benefit test was robustly applied to prospective overseas buyers of rural land.
Vice-president Andrew Hoggard said if there were going to be rules on the sale of productive land to overseas buyers bringing employment, public access, additional development or other benefits over and above those a domestic buyer would bring, they should be robustly applied.
Follow-up checks needed to be made once the undertakings given actually happened.
"Equally, we are pleased the Government is not closing the door on investment in our primary sector."
History had shown foreign expertise and money could make a positive contribution to New Zealand, especially as some overseas owners had become New Zealand citizens and, along with their families, made an ongoing positive contribution to society, he said.
"As a nation highly dependent on overseas trade, we also need to ensure our domestic policies do not undermine our international efforts to break down artificial barriers to trade in overseas markets."
Farmers and others would watch with interest to ensure the new directive was applied fairly and not unnecessarily restrictively, Mr Hoggard said.
Fish & Game chief executive Martin Taylor said the Overseas Investment Office’s poor performance had been hurting New Zealanders wanting access to the outdoors.
Kiwis had been increasingly shut out of their own outdoors because the OIO had been aiding and abetting exclusive capture of recreational resources.
There was frustration among the outdoor recreation sector the OIO, under the previous government, was allowing the privatisation of New Zealand wild places, he said.
"Kiwis wanting to get into the mountains to tramp, fish, hunt, raft and climb were losing access to public land because of the exclusive capture of recreational access and resources. This is just plain wrong and it is time it stopped."
It was time the interests of New Zealanders were put first, Mr Taylor said.
Mr Parker said the new directive was the first step to strengthening the overseas investment regime.
Legislation to ban foreign buyers of New Zealand’s existing houses would be introduced before Christmas and other work to strengthen the Overseas Investment Act was under way.
Forestry Minister Shane Jones said the inclusion of a specific directive for forestry recognised the importance of forestry to the New Zealand economy and regional communities.
The Government, as part of the coalition agreement, had committed to an ambitious tree planting programme requiring a partnership between the Crown and the sector itself.
High-quality overseas investment could help achieve the goal.
*The coalition deal stipulated the Government planting one billion trees in 10 years, or 100 million trees a year. Last week, Mr Jones backtracked, saying the Government would plant half of the billion trees. The private sector would plant the rest.
At a glance
• New sensitive land directive applies to all rural land larger than 5ha, other than forestry.
• The new directive comes into force on December 15. All applications being assessed at, and from December 15 will be subject to the new directive.
• Federated Farmers and Fish & Game supportive.
• Legislation to ban foreign buyers of New Zealand existing houses introduced into Parliament before Christmas.
