Whether Labour might be able to limit future land sales under the TPP to foreigners was yesterday lost in confusion as Ministry of Foreign Affairs and Trade briefing notes appeared to offer contradictory views on whether they could.

Trade Minister Tim Groser will meet the Labour leadership today to discuss the agreement in an attempt to try and clarify the situation.

The ability to maintain the right to “restrict sales of farm land and housing to non-resident foreign buyers” is one of Labour’s five conditions which it requires to be satisfied before it can support the TPP.

But over the weekend in two separate interviews Mr Groser has maintained that the agreement will not permit New Zealand to ban foreign land sales.

On TV3’s “The Nation” he was asked by Lisa Owen “the TPP means categorically that New Zealand cannot ban foreign nationals from TPP countries from buying property. Correct?

Mr Groser replied: “Correct”.

However Ministry of Foreign Affairs and Trade briefing notes released on the Beehive website say that existing regulations inconsistent with TPP obligations are carved out of the agreement.

“New Zealand will therefore continue to screen foreign purchases of sensitive land, including farmland, through the Overseas Investment Office and require that these meet a “benefit to New Zealand” test,’ it says.

But later in the same document, MFAT says: “The non-discrimination provisions in TPP would prevent the Government banning TPP nationals from buying property in New Zealand.”

The key question then is whether the TPP will permit New Zealand to change the criteria under which foreign land purchases must be screened.

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Currently that is defined in a Schedule to the Act as “sensitive land’ and includes:

  • Non-urban land over five hectares.                       
  • *land on islands land foreshore or seabed                         
  • bed of a lake
  • land held for conservation purposes
  • land that a district plan or proposed district plan provides is to be used as a reserve, as a public park, for recreation purposes, or as open space 
  • land subject to a heritage order, or a requirement for a heritage order,
  • a historic place, historic area, or wahi tapu

Sop though an outright ban on all sales to foreigners might be prohibited under the TPP, the question Labour might be asking today whether they could add to that list of land to be screened.

One senior Labour politician suggested that a possibility might be to say that a requirement might be added that all property sales in Auckland would need to be screened to see whether they complained with the Overseas Investment Act’s “national interest’ criteria.

Interestingly, Stephen Jacobi, the head of the New Zealand International Business Forum, a free trade lobby group, told BusinessDesk on Friday he would have thought it possible to amend the Overseas Investment Act to take account of future restrictions on land. 

 But he said that would depend on what the final text which is still be to be released actually said.

But at the moment Labour looks like it will oppose the agreement.

Leader Andrew Little confirmed that on TVNZ’s “Q+A”, referring specifically to the restriction on banning foreign land sales.

“From what we know at the moment, yeah, you wouldn’t support it,” he said.

“We’re going to hold on to our right to make sure that we can prevent non-resident foreigners from buying our land.”

Asked if he would be prepared to fight that in court he said: “We will legislate for it. It’s our policy to do so.

“We will legislate for it, and we will have a fight with the rest of the TPP if we have to have that.

“Now, there is a challenge there, of course – will they really come after us, and, well, let’s see what happens.

“But we will do what’s right for New Zealand citizens.

“That’s our moral duty to do that.”

Mr little said that Labour had taken a pretty principled view, “and one of those principles is we are a supporter of free trade, but we don’t like the erosions of sovereignty that this agreement entails.”

“We’ve taken a principled view. In the end, we don’t get to agree on this.

“We don’t get to have a vote in parliament.

“What we need to talk about is what we will do once the National Party has signed this agreement, because that’s where they’re at right now.”

Labour sources have pointed out that the details of the TPP released so far do allow a member country to pull out after giving six months’ notice.

But Labour will want to delay any final decision as long as possible.