More rules for agricultural FDI

25 Feb, 2015 11:25 AM
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Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce.
The government is seeking views on an appropriate definition of agribusiness
Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce.

FURTHER moves to tighten rules on foreign investment in Australian agriculture have been announced by the government today.

In a joint announcement with federal Treasurer Joe Hockey, Prime Minister Tony Abbott flagged the government’s plans to strengthen the nation’s foreign direct investment (FDI) framework for residential real estate and agriculture.

The government will undergo four weeks of community consultation on the various proposals.

A statement said the government would deliver on its election commitment by introducing a new $55 million screening threshold for foreign investment in Australian agribusiness, to further increase transparency around foreign investment in agriculture.

“The government is seeking views on an appropriate definition of agribusiness,” the joint announcement said.

“Together with the lower screening threshold for foreign investment in agricultural land of $15 million (cumulative) from 1 March 2015 and the foreign ownership register already announced, the new $55 million screening threshold for agribusiness will ensure foreign investment in agriculture remains in Australia’s national interest.

“While foreign investment is integral to Australia’s economy, it’s important to uphold the integrity of the framework and ensure that foreign investment is not contrary to our national interest.”

Investment on 'our terms': Joyce

Federal Agriculture Minister Barnaby Joyce welcomed the announcement on strengthening controls on foreign ownership.

He said it came on the back of the government’s announcement – on February 11 - that the Foreign Investment Review Board (FIRB) review threshold would be reduced from $252 million to $15 million for agricultural land purchases.

But he said Labor had also expressed a, “unilateral desire to increase the threshold from $252 million to over $1 billion before they have to tell anyone what they’re up to”.

“The Coalition government is responding to the wishes of the Australian people as ultimately we are their servants and this is their country, and the Australian people are very concerned about who owns what in their country and see this issue as a high priority,” he said.

“The Coalition went to the last election with a clear and unambiguous commitment to improve our oversight of foreign ownership and we intend to fulfil the commitments we made to the Australian people.

“The global environment is different today – there is a massive pool of liquid funds searching for a home to invest.

“Australia remains a great place to invest but it must be on our terms and not just any terms.

“When Labor talks about a $1 billion limit on agricultural land without referral to the FIRB for any foreigner wishing to buy land – they really mean foreign ownership on any terms which I can assure them does not pass the pub test,” he said.

“I doubt whether Senator Wong or Mr Fitzgibbon will pass their own backbench test on this.

“I call on Senator Wong and Mr Fitzgibbon as well as opposition leader Bill Shorten to acknowledge the legitimate concerns of Australians about foreign ownership and to ditch their plan to lift the FIRB limit to over $1 billion.”

Govt confused on agribusiness: ALP

Shadow Agriculture Minister Joel Fitzgibbon said the government’s statement showed it was still fighting internally, over what constitutes agribusiness.

He said the government was making policy statements on the run, before cabinet agreement had been reached.

“I’m talking purely about agriculture and agribusiness but this is just another example of the government putting red tape restrictions and barriers in the way of much needed foreign investment,” he said.

“They’d be much better placed considering the suggestions I made last week, which goes to maximising the benefits of foreign investment in agriculture, for example linking foreign investment to sustainability outcomes and verification of our clean green safe image, in agricultural production.

“The point I made is that we currently take it as a given that the world accepts our clean green high quality image.

“But the time may come, and the recent issue with imported berries is an example in reverse, where the world will be looking to us to verify and certify the quality of our product.

“This is new thinking somewhat outside the square but will prove to be more productive than implementing populist barriers to foreign investment.”

Mr Fitzgibbon said he and Shadow Trade and Investment Minister, Senator Penny Wong, had both made the point that under the current government different foreign investment rules applied to different countries.

“Having a discriminatory regime on foreign investment is not good for Australia,” he said.

“And I remind Mr Joyce that the $1 billion threshold that currently exists for the US was an arrangement put in place by the Howard government and that can’t change (because of the free trade agreement with US).

“Again it’s one rule for one and another rule for others.”

The government is seeking feedback on the proposed changes from interested stakeholders by Friday March 20.

Further details on the proposed changes to the foreign investment framework can be found in the discussion paper on the Treasury website.

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Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Bushie Bill
25/02/2015 1:36:11 PM

What was it the Bozo, the Chief Clown said on election night? Was it "Australia is now open for business"? I think it was. I wonder what foreign investors are thinking about the wisdom, intelligence and managerial skills of this bunch of boofheads now?
Jock Munro
25/02/2015 7:19:45 PM

Who cares what foreign investors think Bushie Bill! Australia belongs to Australians. Finally the Liberals are listening - the Queenslanders have put the wind up them! Well done Nationals.
Decipherer
27/02/2015 4:50:01 PM

Jock, I agree with your comments. It is essential to keep our major agricultural assets out of the hands of foreigners. Already, they have taken a huge slice of the Beef, Sugar, Grain, and Cotton Industries. How many abattoirs are now owned by Brazilians? and Sugar Mills by the Chinese? Milk & Cheese Plants by the Italians and Canadians. Coby Station by the Chinese. Northern Territory Cattle Stations by the Indonesians. Then, Bugger me, if Goodman Fielder and its 40 Factories is now owned by Singaporeans and Taiwanese. Wake up Australia, before its too late!!! and even AACO LTD is sold off.

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