The Government has issued a new Directive Letter to the Overseas Investment Office (OIO) that sets out its policy approach to overseas investment in rural land. It says the new direction will strengthen New Zealand's overseas investment regime and welcome high-quality investment.
Associate Minister of Finance David Parker says "the new directive tightens how New Zealand assesses overseas investment [here] to ensure authorised purchases provide genuine benefits".
Minister for Land Information Eugenie Sage says it raises the bar for overseas investments in sensitive land by replacing the existing large farm directive and extending it to include all rural land larger than five hectares, other than forestry.
Included in the changes is a new forest land directive encouraging domestic processing; meaning overseas investors would need to meet new criteria like the processing of raw logs in New Zealand.
Minister of Forestry Shane Jones says the changes are essential to boost the industry and reach the ambitious goal of planting 1-billion trees.
"While we have the Crown funds to plant the trees we can't forget that many of the forests are under foreign ownership. However, if they can work with locals and the mills there will be many benefits."
Jones says this means more jobs for kiwis, more widely dispersed benefits and more opportunities for regional iwi-overseas investment relationships, like the one between Ngāti Porou and Korea.
"I want that example to be more widespread if there is no money available in New Zealand there is nothing wrong in working with overseas investors as long as it means employment for locals,"
The new forest land directive means more raw logs would likely be processed in New Zealand rather than overseas.
"The value of goods purchased under overseas forestry investors around $6-billion, the cost of a new mill is, however, many million but that will be for the investors to sort out," Jones says.
The new Directive Letter will come into force December 15 and any undetermined applications will get the opportunity to make additional submissions under the new approach.
National Party Leader Bill English says it looks like the Government is running a system where they could interfere with investment in the regions and then look to use tax payer money to make the jobs that would otherwise flow from it, and he will be watching the outcome of the changes closely.