Streamlined forestry test to end for overseas investors planning to convert farms to forest
The Government is taking steps to ensure forestry conversions by overseas investors are of better benefit to New Zealand.
This will help ensure the right forest is planted in the right place for the right reasons, Associate Minister of Finance David Parker said today.
“The changes to the Overseas Investment Act 2005, approved by Cabinet, mean that proposals by overseas investors to acquire land for conversion to production forestry will be considered under the Benefit to New Zealand test, rather than under the streamlined ‘special forestry test’,” David Parker said.
This change will apply only to forestry conversions, such as where overseas investors look to acquire existing farmland for planting into a new forest. There is no change to investments in pre-existing forests.
“Our overseas investment screening regime recognises what a privilege it is to own sensitive New Zealand assets,” David Parker said.
“The current settings for investing in land to be converted to production forestry, however, do not require overseas investors to demonstrate the benefits of their proposed investment in the same way the Act does for other land-based investments.
“High quality foreign investment in forestry, and a strong forestry sector, remain important – and we continue to welcome this investment. However, as economic and regulatory contexts change, it is important to consider the impact of particular kinds of investment in forestry to ensure that all stakeholders continue to benefit.”
By retaining the more streamlined special forestry test where the investment does not involve a change in land use, the screening regime will continue with allowing for high-quality foreign investment in existing production forestry.
The Bill is expected to be introduced to Parliament in a few months. At the same time, some minor and technical improvements will be proposed to the Act to help with the operation and effectiveness of 2018 forestry-related changes.