Source: Federated Farmers
Federated Farmers agrees with the Government that it is timely and worthwhile to review New Zealand’s overseas investment settings.
“It’s alarming and regrettable the OECD has rated us 35 th out of 35 countries in terms of openness to investment,” Federated Farmers meat & wool chair and forestry spokesperson Toby Williams says.
“As a small nation, capital and investment from overseas can help New Zealand to fix infrastructure and drive industry development.”
Federated Farmers agrees the Government should retain the legal option of screening those investment types currently screened, including the sale of farmland, to ensure they are in the national interest.
“However, fast-tracking the overseas investment assessment process when no risk factors have been identified, and consolidating the investor, benefit and national interest tests, also makes sense,” Williams says.
“We understand the farmland test can take as long as two years from application.
“It’s such a long-winded process that investors can lose interest and pull out.”
The delay and costs are a real deterrent to potential offshore investors who want to invest in farmland, and keep farming it, rather than converting it to forestry – applications for which are currently processed faster,” Williams says.
“We’ve seen some fantastic results from foreign investors who continue farming.
“A benefit of the proposed changes is that the true value of farms could be realised by opening it up to a shorter, more efficient process for other investors.”
Williams doesn’t see any risk the proposed changes to the Overseas Investment Act (OIA) will accelerate conversion of farmland to forestry.
“The land use changes we are seeing are due to settings with the ETS distorting the profitability of one land use over another.”
Reforming the OIA for effectiveness and efficiency is also consistent with the streamlining in decision-making the Government is pursuing in other areas, such as with our resource management legislation.
Federated Farmers also applauds the Government’s plans to issue Government Policy Statements that highlight those areas New Zealanders would particularly welcome overseas investment.
“The current process of either amending the legislation, or a letter of expectation from the minister, tends to take too long or is not an ideal mechanism.
“Going the GPS route will be far more robust and should be able to be far more comprehensive on the delivery of desired outcomes,” Williams says.
Another positive move by the Government as it makes these changes would be to add ownership and management options for young NZ farmers, with the potential for ownership pathways over time.
“This is a win/win for both parties and will ensure rural communities are maintained,” Williams says.
