A private member's bill put forward by Labour MP Phil Goff would require foreign buyers of farmland to demonstrate that their investment would create more jobs or otherwise benefit the economy more than a New Zealand buyer.
Mr Goff's Overseas Investment (Owning our Own Rural Land) Amendment Bill was drawn from Parliament's member's bill ballot yesterday.
"Foreign purchasers simply wanting to speculate in a country that has no capital gains tax and who have no expertise in farming only inflate farm prices. That hurts Kiwis wanting to buy their own farms," Mr Goff said.
His bill represented a significant toughening up of the Overseas Investment Act's rules around approving the purchase of rural land over and above additional "economic interest" criteria introduced by Finance Minister Bill English three years ago.
Mr English introduced regulatory rather than legislative changes during public concern over the purchase of 16 dairy farms owned by the Crafar family to Chinese interests.
Those changes gave ministers discretion to turn down applications to buy large amounts of farmland for economic reasons.
"That power has not been exercised by the National Government," Mr Goff said. "My bill allows foreign investment in rural land only where it delivers benefits over and above what a New Zealand investor could produce.
"If an investor can prove they will contribute significant job creation and increases in exports, then the investment can be approved."
Those restrictions would apply to purchases of land of 5ha or more.
Green Party co-leader Russel Norman said the bill would be an improvement. "Obviously the Greens would go further and basically say that foreigners can't buy rural land over 5ha."
Through a spokesman, Mr English said the current legislation already included the test Mr Goff was talking about. "This was confirmed by the High Court in the Crafar farms case."
Under Labour's rules for foreign farm buyers, Ministers must be satisfied the investment:
• Will create a substantial number of additional jobs or will result in a substantial increase in exports.
• Will produce jobs or exports above what would be likely in the foreseeable future if a New Zealander bought the land.