Election result could shape foreign investor rules

Election result could shape foreign investor rules


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Labor critical of Coalition government's 'discriminatory' offshore investor rules.

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Foreign investment has not been a significant issue in the federal election campaign, but that doesn't mean there aren't differences among the major parties.

Labor has indicated it may consider winding back some of the regulations the Coalition government introduced to tighten Foreign Investment Review Board (FIRB) oversight of agricultural land sales.

FIRB criteria requires foreign investors to demonstrate that land they intend to buy has been widely marketed, the sale process afforded equal access to local bidders, was advertised in a minimum 30 day offering, and development must commence within a five year period (to prevent land banking).

Sales to companies and other non-government entities are reviewed by the FIRB if they exceed $15 million value. That threshold is cumulative, which means one company that buys two or more properties with a total value above $15m attract FIRB scrutiny.

The exception to FIRB scrutiny are investors from some countries with Free Trade Agreements with Australia, which are Chile, New Zealand, Thailand and the US.

Labor agriculture spokesman Joel Fitzgibbon said some of the FIRB rules were discriminatory.

Data from Foreign Investment Review Board as of June 2017.

Data from Foreign Investment Review Board as of June 2017.

"If you're from the United States, or you're from New Zealand, or Chile, you only go to the FIRB if you are investing more than a $1 billion," Mr Fitzgibbon told the Rural Press Club of Victoria.

"But if you are from some other places you go under the threshold (for FIRB review) if you are investing as little as $15m. Now that is discriminatory by any definition and we shouldn't have discriminatory policy like that, we should have one rule for all."

Mr Fitzgibbon and Labor foreign affairs spokeswoman said in 2015 the threshold for FIRB review of farmland sales should be raised from $15m to $50m, to better facilitate the flow of capital into Australian agriculture.

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Last week Agriculture Minister David Littleproud said foreign investment was important for the farm sector, "but it has to be in our interests".

"Labor says they will lift the caps on the thresholds to make sure we have an oversight around the level of foreign investment and the concentration of foreign investment," he said.

"We should decide the foreign investment. It should be good for the country. That's why we put the safe guards and thresholds in place, to protect farming families to have a crack."

Speaking in November last year, he said foreign investors should have to demonstrate how they would increase productivity of farmland.

""The problem I see is that most of our farms in developed agricultural regions are at peak production. They're fully developed, maxed-out on irrigation licences and so on, run by people who know the land and have done the lot to it," Senator Williams said.

"When a foreign investor buys land like that there's no productivity increase, or jobs, or tax take, and the profits flow offshore."

Charles Sturt University economics professor John Hicks backed Australia's current foreign investment regulations.

"{We have a relatively permissive regime, but it's not totally permissive,' Mr Hicks said.

"They (foreign investor rules) are in place for political and security reasons and it's something to keep public acceptance, because controls are in place.

"While there are some restrictions in place when the land value is getting high, generally speaking I'd be supportive of farmers who want to sell their land to the highest bidder."

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