Wednesday, May 22, 2024

Overseas forest sales double

Neal Wallace
Forestry sales to foreigners have double in area in the first nine months of this year.
Reading Time: 2 minutes

Overseas Investment Office figures show the Government approved twice as many sales of freehold land than for the corresponding period last year; 71 transactions covering 18,426ha compared to 37 sales of 9633ha.

Forestry dominates sales with two purchases of 4273ha and 1876ha by Kauri Forestry in Wairarapa and Northland, respectively, the two largest deals by area.

Veronika Leeb-Goess-Saurau’s purchase of 1727ha in Wairarapa was the third largest.

Changes to the Overseas Investment Act announced by Associate Finance Minister David Parker last week do not target the contentious issue of foreign investment in forestry.

“These changes were not considered as part of the current review of the Act,” a Treasury spokesman said.

“However, their impact will be examined in a statutory review which must commence by October 2020.”

Parker last week announced changes to the Act that impose a new national interest test for sales of sensitive and high-risk assets such as ports, airports, telecommunications, electricity and critical infrastructure to overseas buyers.

After the last election Parker issued a ministerial directive to the OIO that added extra requirements on sales of farmland to foreign buyers and last week’s announcement said they will now be embedded in the Act.

“Provisions of an existing ministerial directive will be written into the Act, which requires overseas investments in farmland to show substantial benefit to New Zealand by adding something substantially new or creating additional value to our economy,” Parker said.

By embedding the requirements into the Act a future government will require Parliament’s consent to make any changes.

Parker also took aim at foreign investors in water bottling, now requiring consideration of the impact on water quality and the sustainability of a water bottling enterprise when assessing an investment in sensitive land.

Parker’s changes also include greater enforcement powers with the maximum fixed penalties rising from $300,000 to $10 million for corporates.

Labour, NZ First and the Greens all campaigned for greater restrictions on the sale of farmland and urban housing to foreigners but in October 2018 the coalition Government streamlined the consent process for overseas companies wanting to invest in forestry.

That recognised the role overseas investment has in the sector but has angered rural communities that say farmland being planted in forestry guts regions of jobs and services.

Overall, there has been a significant increase in the number and value of overseas purchases approved by the OIO so far this year.

It approved 104 transactions with a net investment value of $3.5 billion from January to September compared to 69 worth $2.4b for the corresponding period a year earlier.

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