27 Sep 2010

Government raises bar for foreign farm buyers

6:01 pm on 27 September 2010

The Government is moving to make it harder for foreign buyers to purchase large tracts of farmland.

Finance Minister Bill English has announced regulations that will allow ministers to take New Zealand's economic interest into account when considering investments in sensitive land.

Mr English says ministers will be able to consider a wider range of issues, including large-scale ownership of farmland. The change gives them more tools for rejecting applications, he says.

At the same time, he says, if investors commit to New Zealand participation in their investment, that will be considered as a mitigating factor.

Mr English won't say what exactly would constitute a large-scale purchase of farmland.

Labour promises clearer policy

Labour leader Phil Goff questions whether what he calls the "unclear" changes will result in more, or less, land being sold into overseas ownership.

Mr Goff says the Government has no commitment to keeping farmland in New Zealand ownership.

He says Labour's own policy, to be unveiled shortly, will be stronger, clearer and designed to keep productive land locally owned.

Strategic-assets test retained

In promulgating the regulations, the Government has decided - after an 18-month review of the legislation - against amending the Overseas Investment Act.

The strategic-assets test will be retained, although it has not been used since being introduced by the previous Labour-led government two years ago.

Mr English says the measures strike an appropriate balance, allowing the Government more flexibility while providing extra clarity for potential investors and the Overseas Investment Office.

The changes are expected to take effect from December.