A SENATE Committee inquiry has found serious shortcomings in the current framework for foreign investment in Australian agriculture.
Nationals Senator Fiona Nash – who was involved in the Senate Rural and Regional Affairs and Transport Reference Committee - called on new Treasurer Chris Bowen to strengthen foreign investment rules for agriculture as a top priority.
The committee found the current regulatory framework does not sufficiently address the challenges for Australian agriculture posed by acquisitions and takeovers.
Key concerns included the significant lack of detailed and accurate information on foreign investment in Australian agriculture; shortcomings in transparency of the Foreign Investment Review Board (FIRB) process and scrutiny of the National Interest Test; the current threshold which triggers a FIRB review being too high at $248 million; and the definitions of key terms such as ‘rural land’ and ‘urban land’ that do not match their commonly understood meanings and may lead to the inappropriate classifications.
The committee recommended the threshold for investment in agricultural land be lowered to $15 million, with investment after that threshold automatically triggering a review.
“There is real concern that foreign takeovers of Australian land and agribusiness are slipping under the radar,” Senator Nash said.
National Farmers’ Federation (NFF) chief executive officer Matt Linnegar said it was positive to see Senators agree that foreign investment is welcome in Australia, on the proviso that it was commercially based and competed on a level playing field with Australian farmers and agribusinesses.
“The NFF has long said that foreign investment has traditionally been very positive for Australian agriculture and that it is important that we do not deter this investment,” Mr Linnegar said.
“However, Australian farmers want to see greater transparency around investment to ensure that the motivations behind this investment are clear.”
The report also said a register must be comprehensive, publicly available and help the government model how it can manage foreign investment in the years ahead.
“Building transparency, in order to have all the facts, is the most important consideration at this stage,” Mr Linnegar said.
“The sooner a register is established, the sooner we have a clear understanding of the current picture of foreign investment in Australia, and the sooner we can make decisions on the policies we need to manage this well into the future.”
Federal Member for Wannon Dan Tehan also welcomed the report, saying that growing concerns about foreign purchases of Australian agricultural land “were not being adequately scrutinised”.
“I welcome foreign investment in Australian agriculture, but the government needs to make sure that (it) is commercially based and in the national interest,” Mr Tehan said.
“Now that there is evidence to support my concerns in this area, I will continue fighting for change in how our government manages foreign investment,” he said.
Other recommendations: Strengthening tax regulations to protect Australia’s revenue base and stop tax revenue from going overseas through business structures and practices used by foreign investors. Establish an Independent Commission of Audit into Agribusiness or a similar body to develop a comprehensive policy approach to Australian agriculture. Commission an independent and wideranging review of Australia’s foreign investment regulatory framework that in particular examines ways to ensure foreign investment is made on a genuinely commercial basis and does not distort the capital market or trade in agricultural products. That the Australian Bureau of Statistics does not conduct future agricultural surveys on foreign investment and that the national register for foreign ownership of agricultural land be the primary source of this information. That the national register be a legal requirement for foreign investors, and that the country of origin of all foreign government investors and specific foreign government investments be published annually in the register.