Treasurer reveals “tough new rules” on foreign farmland sales

Treasurer reveals “tough new rules” on foreign farmland sales


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FARMERS have backed “tough new rules” to strengthen scrutiny of foreign farmland transactions by forcing sellers to advertise and market locally.

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FARMERS have backed “tough new rules” to strengthen scrutiny of foreign farmland transactions by forcing sellers to advertise and market locally, ahead of any investment opportunities.

New measures to improve oversight of foreign farm investments were revealed today by the federal Coalition and announced by Treasurer Scott Morrison today.

“Subject to exceptional circumstances, foreign investors will need to demonstrate that agricultural land they intend to acquire has been part of a public sales process and marketed widely to potential Australian bidders for a minimum of 30 days and Australian bidders have had an opportunity to participate in the sale process,” Mr Morrison said.

“The Turnbull government has acted to ensure Australians will get every opportunity to purchase agricultural land holdings by introducing tough new rules that mandate vendors to advertise and market agricultural land to Australians first.

“We welcome foreign investment in Australian agricultural land where it is not contrary to the national interest.

“Our foreign investment rules facilitate investment while making sure Australia's national interest is protected.”

Mr Morrison said concerns around the ability of Australians to participate in the sale process of agricultural land acquisitions had been a factor in his previous foreign investment decisions, including approval of the sale of the iconic Kidman & Co cattle empire.

National Farmers’ Federation (NFF) CEO Tony Mahar said new requirements for the advertising of Australian farm land captured by the Foreign Investment Review Board (FIRB) were a response to community concerns around the sale of Australian farm land to foreign purchasers.

Mr Mahar said the NFF supported the concept of equal opportunity to purchase farm land but stressed in most cases this was currently occurring.

“We should remember that by and large foreign investment in Australian agriculture has delivered positive outcomes for the industry,” he said.

“Of course we support Australian businesses having every opportunity to invest in the agricultural industry.

“Notwithstanding that it’s important that we get the balance right between transparency and equity but also an open and market driven environment.”

Mr Mahar said the potential for Australia’s farms sector to continue to grow was constrained by a lack of new capital flowing to the industry.

“We have a goal for our sector be a $100 billion industry by 2030 - a 67 per cent per cent increase on the 2016-2017 production value of $60 billion,” he said.

“However, to achieve this goal we need investment from both domestic and foreign sources.

“Between now and 2025, we face the prospect of a $110 billion shortfall in required capital.

“This is unlikely to be a sum of money we can raise solely on Australian shores.

“A transparent fair and open foreign investment regime in our industry has a real role to play in meeting our capital needs.

“The NFF understands the community's concerns about who owns our agricultural land and advocated strongly for the establishment of the Foreign Ownership Land Register and, it is a good start.

“We strongly caution against any unnecessary red tape that would serve to slow or block the flow of capital we need to ensure our $60 billion agricultural industry reaches $100 billion by 2030.”

Mr Morrison also said all acquisitions of agricultural land by foreign investors for residential development would also be subject to standard development conditions requiring development to commence within a five year period to prevent land banking

He said that condition already applied to acquisitions of vacant land.

The requirements build on the government’s commitment to boost the transparency and integrity of the foreign investment regime and provide prospective investors with greater certainty about the rules, he said.

Mr Morrison said the government’s previous initiatives include reducing the screening threshold (by FIRB) for foreign purchases of agricultural land from $252 million to $15 million and the establishment of the agricultural land register.

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