Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Hansard source

A lot of the things that the member for Kennedy now enjoys, with the people in his electorate, farmers and others, grew out of some of the original foreign investment in this country, and there have been many waves of foreign investment since. However, competition for foreign investment has intensified. Australia is competing with many other investment-hungry countries. Countries in our region are increasingly successful at attracting investment. Australia has been very successful at attracting investment in our mining and resources sector. With investment in this area easing, we have got to intensify and focus our attention on making Australia a more attractive destination. We have been blessed with the investment over the last 15 to 20 years and the thousands of jobs created in every part of Australia, because the investments in the north-west, the north-east and the north in mining, resources and energy projects have flowed through to so many parts of urban Australia. So many of our small and medium sized service suppliers have had a part of all that action, and we have enjoyed the hundreds of billions of dollars of tax that have flowed. Almost all of it has come because of foreign investment. It is where the jobs have been created. No-one can deny that. No-one can deny the fact that jobs, by the tens of thousands, have come from the foreign investment that we have been blessed with over the last 15 to 20 years. Now that the construction phase is finished, sure, prices have come off somewhat, but we have got decades and decades of supply contracts that will underpin so much of the prosperity in our country, all flowing largely from so much of that foreign investment, combined with the ingenuity, the skills and the ability of Australians to make these things happen.

Over the decades there has been some tinkering in the foreign investment rules, but no significant revisions have been made to our foreign investment policy framework since the 1970s. It is high time to update the framework. The government is streamlining the processes, doing away with red tape and updating requirements and systems. This will save business time and money and, in doing so, will continue to safeguard our national interest. The broader national interest is at the heart of the government's actions. The bills introduced by the Treasurer strike a good balance. The reforms will streamline our foreign investment regime into a robust framework that provides clarity to investors, to business and to the community. There are so many options for foreign investors. We need to have this clarity, we need to have the certainty and we need to have the consistency that allows them to invest here with confidence and not be confused or find themselves overburdened with many layers of different requirements, in terms of approval and otherwise, with their foreign investment.

The reforms will remove routine investment cases from the system and allow a greater focus on those investments that require closer attention. The reforms improve the alignment with takeover rules in the Corporations Act, raising the substantial interest threshold from 15 to 20 per cent. This means that foreign investors will not have to apply for approval from FIRB until their interest reaches 20 per cent. That will be the same threshold that applies in the Corporations Act where takeovers are considered. It is common sense, but it has not applied for so many years. Providing FIRB with the ability to extend the time to consider more complex deals that have not yet been publicly announced, without requiring them to be prematurely announced via public gazette, is a long-overdue and sensible change that will be welcomed by the business community. The reforms will also remove investments in financial sector companies from the framework, as approvals for such transactions are already required by the Financial Sector (Shareholdings) Act. Removing doubling-up makes sense, it is cheaper and it will be attractive to foreign investors. Such changes simplify and streamline our system, making it more business friendly.

We have heard the community's concerns around agricultural investments, in particular, and with these reforms we fulfil our election commitment of delivering increased scrutiny and transparency. We have reduced the screening threshold for agricultural land, and we are establishing a comprehensive land register to increase transparency on the levels of foreign ownership. This will provide, for the first time, clear data on what is in reality a low level of foreign ownership across our farms—a piece of myth busting that actually helps us to make the case for foreign investment in the agriculture sector by providing the facts to the Australian community.

Under the new legislation we will strengthen enforcement and compliance with the foreign investment rules, particularly for residential real estate. Residential real estate is a special class of asset. Foreign investment in existing stock does nothing to create jobs. Australia's foreign investment regime for residential real estate aims to channel foreign investment into new housing stock, and the changes will ensure that this aim is fulfilled. From now on the Australian Taxation Office will handle compliance and enforcement issues for residential real estate. We will appropriately resource the ATO to cross-match and detect breaches, and we are giving them teeth so that Australian stand-alone housing stock is preserved for those people who live here. The monitoring of foreign investment in residential real estate—and there were over 20,000 applications of this nature last year—is an exercise in sifting through large volumes of data from land title offices and visa records, something much better suited to the ATO. This will free up FIRB to focus on more complex issues involved in a handful of business applications, speeding up response times for applicants. As part of that focus on reduced response times, we will introduce a modest fee structure to provide for enhanced service delivery.

Investors accept that they should make a contribution to the cost of processing their applications and these fees will be returned to them in greater efficiencies and streamlined processes. Let us keep these fees in perspective. The application fee will be very modest compared with the typical legal and advisory fees that businesses incur progressing investment transactions and are highly unlikely to be a deterrent for investors. In fact, removing many of the layers of doubling up and unnecessary paperwork will reduce those typical legal and advisory fees and ensure that we do fast-track many of the approvals.

We need a strong framework around foreign investment, one that welcomes foreign investment so that our economy can thrive while protecting our national interest. The government is very strongly committed to opening Australia for business and encouraging foreign investment within a framework—and this is important—that protects our national interest.

The legislation introduced will help ensure Australia remains an international investment destination. The reforms will modernise our system so that we can continue to prosper from the technology and innovation that foreign investment offers. In a world where there is still an enormous uncertainty, economically and politically, you find that the world is awash with cheap money because of the huge budget deficits that many countries have run but it is also awash with very nervous investors and they are looking for safe havens. These investors are looking to put their money into long-term investments where they are going to see even a modest return and at least their money will be safe. Australia, in that sense, is highly attractive to so many around the world. We have to make ourselves even more attractive.

This bill helps to streamline a lot of the application requirements and other provisions, and it will make us not only safe haven from legal and other points of view but it also will mean that we are attractive and competitive in chasing investments from other parts of the world. The government is committed to continuing our work with business and industry—large and small—to improve the investment environment, to increase the ease of doing business in Australia and to promote Australia as the investment destination for businesses seeking a base from which to capitalise on the spectacular opportunities emerging around our region as a result of the explosion of the Asian middle-class.

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