Senate urges FIRB review

02 Jul, 2013 04:00 AM
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Bill Heffernan and Dan Tehan have both welcomed the report, saying that growing concerns about foreign purchases of Australian agricultural land “were not being adequately scrutinised”.
Bill Heffernan and Dan Tehan have both welcomed the report, saying that growing concerns about foreign purchases of Australian agricultural land “were not being adequately scrutinised”.

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.
  • Strengthen compliance requirements for companies that do not adhere to the undertakings and conditions of FIRB approval through amending the law
  • That Australia’s Foreign Investment Policy be amended to clearly define and represent the interests of local communities and economies when FIRB assesses foreign purchase of agricultural assets.
  • Commission an extensive and independent review of possible incentives and barriers for long term capital investment in major Australian agricultural developments by Australian investors.

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    READER COMMENTS

    Tigerdicky
    2/07/2013 8:36:12 AM

    No! I dont believe it!
    boris
    2/07/2013 9:42:57 AM

    Tehan is obviously not aspiring to higher office. Standing along side Heffernan, when he is at odds with Abbott on foreign investment, assures his fate. Agriculture's future in Australia will need huge capital injections from all corners of the globe for survival. The commitment Heffernan and the Eastern Nats have to deter investment when the Mum @ Dad investors in Australia are not interested in the ag story, will sent us back to the 1950's rapidly.
    dogsbody
    2/07/2013 10:22:51 AM

    Isn't this the legislation the Nats are all fired up about that was put in place by the Howard government? Along with a so called "Free Trade Agreement" that we can't compete with, excise on L.P.G., the chickens are all coming home to roost. Can't they remember what legislation they passed whilst they were governing?
    genazzano
    2/07/2013 1:12:44 PM

    Lease it to them but don't sell it and Australians retain control
    seethelight
    2/07/2013 6:55:25 PM

    Foreign investment in mining hasn't turned out too bad.Since the late nineties it has underpinned nearly all the growth in the economy and the rise in living standards.Commodity exports now comprise 72% of exports ,up from 45% in 1996.However mining investment in Australia is expected to crash from 270 billion this year to 30 billion in 2018.The politicians have managed this triumph without even trying.Imagine what Bill and Fiona can do for agriculture when discouraging investment is their goal.Look out below, Argentina here we come.

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