Assessment process for benefit to New Zealand test
The assessment of benefit to New Zealand applications is done in several steps. Each application is assessed on its own facts in the context of the proposed overseas investment.
1. Current state
To assess the overall benefit to New Zealand of an investment, the benefits outlined in the consent application are compared with the current state. To determine the current state, we use the information provided in the Investment Plan and the Vendor Information Form, along with any additional research we may deem necessary.
The current state is assessed at either the time the transaction is entered into or the time the application is made, whichever date is the earliest.
When preparing your application for consent, you must include submissions on:
- the current state of the assets being acquired – this must include details such as financial information, aerial images, and current access arrangements
- how the proposed investment will provide benefit to New Zealand beyond the current state in relation to each of the factors claimed.
2. Relevance and weighting
Benefit factors are considered to determine which factors are relevant to the investment and their relative importance.
Benefits that are likely to occur are assessed under each factor.
When weighing the benefits arising, we consider:
- the size of the benefit
- the level of certainty the benefit will arise
- whether the benefit is enduring or temporary
- the timeframe in which the benefit is likely to arise
- whether the type of benefit has high or low relative importance.
The farm land benefit test requires high relative importance for:
- economic benefits, in particular the creation or retention of jobs, the introduction of technology or business skills, increased export receipts, and increased processing of primary products
- oversight or participation by New Zealanders.
You must establish, in relation to one or more of these factors, that the benefits of the investment are of a size or nature that represent a substantial benefit to New Zealand.
3. Proportionality assessment
As part of the assessment process, the decision-maker must consider whether the overall benefit of the investment is proportionate to:
- the sensitivity of the land or the fishing quota
- the nature of the overseas investment transaction.
This means that a higher or lower level of benefit may need to be established to meet the benefit test. For example, more benefit is required to acquire a 1,000-hectare orchard than a 50-hectare orchard, all other factors being the same.
Some points we consider when determining the sensitivity of the New Zealand assets being acquired and the nature of the transaction include:
- land size
- monetary value of the land
- public interest in the land
- whether the land includes or adjoins features such as a marine or coastal area
- the historic heritage of the land
- the infrastructure present on the land, and whether this includes any strategically important infrastructure
- any business being run on the land
- the degree of ownership or control of, or over, the interest in the land being acquired
- the nature of the interest being acquired, including whether it is temporary or permanent
- the number of sensitivity factors in the Act that apply.
These considerations are not exhaustive, and no single factor is determinative. Each investment is assessed on its own merits and the specific facts that relate to it.