Amendments proposed to forestry rights screening regime
Investments in sensitive land involving forestry rights will be brought into the scope of the Overseas Investment Act under changes proposed today by Associate Finance Minister David Parker.
The changes would also introduce a light-handed “checklist” screening regime, which will make it easier for overseas investors to gain approval to buy forestry rights than if they were subject to the current screening regime.
Overseas buyers of existing freehold and leasehold forestry land, who already face screening, would also be able to use the light-handed checklist
“The changes need to be made before the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) comes into force, or we will lose the chance to screen such sales forever,” Mr Parker says.
“It will then be possible for future governments to tighten or further loosen the criteria applied to forestry investment, if required.
“Any forest can in effect be purchased as a forestry registration right. This means that a screening regime that covers only freehold and leasehold is ineffective.
“Forestry rights can grant a high degree of control over large parcels of land for multiple rotations over long periods of time, so it is important they are included in the regime. There is no evidence that the change will have a substantial effect on commercial values,” Mr Parker says.
The forestry sector is reliant on overseas investment with 70 per cent of plantation trees in overseas ownership.
Under the proposed changes investors buying up to 1000 hectares of forestry rights each year will not need consent, but purchases above that level would be screened. This would apply to all forestry rights, including bare land planting.
Investors would likely pass a new screening test for freehold and leasehold bare land, given they can demonstrate benefit to New Zealand from converting land into forestry, providing jobs and advancing the Government’s “one billion trees” policy.
The amendments have been submitted to the Finance and Expenditure Select Committee. The Government will also be consulting further with Māori.
More information, including the draft regulations, can be found at http://www.treasury.govt.nz/publications/informationreleases/overseasinvestment/forestry