Monday, 7 November 2016
Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016; Second Reading
The Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016 amends the Register of Foreign Ownership of Agricultural Land Act 2015 to establish a register of foreign ownership of water entitlements, essentially creating a national foreign-owned water register. The bill is enabling legislation to allow for the collection of information and publication of statistics about foreign holdings of registerable water entitlements and long-term contractual water rights. The purpose of the bill is to provide increased transparency on the level of foreign ownership of water entitlements across Australia. This will be a good thing if it is effectively executed.
To put that more simply, this bill adds the words 'and water' to a previous bill we dealt with in this place, which effectively represented the enabling legislation for a register of foreign land ownership in this country. This concept dates back to the period of the Gillard government, when, I think in 2012, Prime Minister Gillard announced the measure at a National Farmers Federation congress, the latest of which was held in Canberra not a fortnight ago. The Prime Minister of the day was acting on growing community concern about the level of foreign ownership of agricultural land in this country. These somewhat unfortunate concerns grow out of the changing source of investment in agricultural land in this country. Of course, we have always had heavy investment from more traditional sources—the UK, the USA, Canada and New Zealand. While Chinese investment still ranks a poor fifth to that of other countries, including the Netherlands, it is on the rise. Rightly or wrongly, that is causing some uneasiness in some sections of the Australian community. The Prime Minister of the day rightly sought to deal with those concerns and to build confidence in our foreign investment regime and in the way we screen investment propositions by adding to the transparency so that, as I often say, at the click of a mouse, Australians everywhere could see, in terms of our agricultural land, who was buying what, where and for how much. If we can introduce and establish more transparency in the system, people in Australia will hopefully feel more comfortable about foreign investment.
It has been said many times in this place that foreign investment generally has been important to the development of our nation-state. None of our key infrastructure, our iconic infrastructure projects—the Snowy water scheme, the Harbour Bridge, the Opera House, you name it—would have progressed without foreign sourced investment. That is also true in agriculture. In fact, it is becoming increasingly true in agriculture. I am very pleased that the member for Hume is sitting at the table, because it allows me an opportunity to acknowledge the work he did in his contribution to a very good—in fact, seminal—report called Greener pastures, in partnership with the ANZ Bank and Port Jackson Partners. That report indicated that, to reach our aspirations in this country in agriculture—in other words, to fill that huge and growing demand for high-quality food globally—Australian agriculture would need $1,000 billion worth of investment. I did not misspeak: $1,000 billion of investment—'billion' with a 'B'—to the year 2050. That is a lot of money.
As a country with a population of some 23 million people, and therefore a very narrow savings pool, by definition, much of that investment will by necessity come from foreign sources. I have to say that, generally speaking, there has been a level of bipartisanship in this House and the other place over the years. All of us are desperate for that foreign investment, and we need bipartisanship to make sure we draw upon it. We do need to be discerning and we do need to ensure that our Foreign Investment Review Board processes, including the screening thresholds, are robust and satisfy the broader community test, because that is critical to our national interest and therefore it is critical also to our agricultural interest.
Throughout the course of the 2013 election campaign, the then coalition opposition decided it would match the then Prime Minister's commitment to greater transparency in the form of a land register. This bill provides the enabling legislation for that to be extended to water resources that are attached to agricultural projects. This bill basically says, instead of land, it is land and water, so it is pretty simple amendment. The only problem is that the process behind this bill, or the architecture or the design of the register or registers, is flawed. It was the then Labor government's aspiration—something it was not able to fulfil in the short time between the announcement of the policy by Prime Minister Gillard and the 2013 election—to ensure that every Australian could very easily, by way of their desktop computer, determine who exactly is buying what, where and for how much.
Unfortunately, after a long wait, when this government finally produced its foreign land register a number of months ago, only then we learned that that this is effectively a Clayton's register. For people who are not old enough to remember what 'Clayton's' means—I think the member for Eden-Monaro will probably remember—Clayton's refers to a drink you have when you are not having a drink. This register is a register you have when you are not having a register. It is very disappointing. In fact, this register tells us no more than what we already knew.
It is not just me saying that; shock jocks around the country, including Alan Jones and Ray Hadley, have been absolutely scathing of this register. They agree with me: the register tells us no more than we already knew. Why is this so? The government tells us there are privacy problems with telling Australians exactly what they wanted to know, the sort of information we needed to provide to give public confidence. All we have really seen in this register is an aggregation, if you like, of landholdings in this country and what they represent in square metreage terms. We get a bit of a feel for how much of the continent is owned by others, but we get no feel, for example, of what it is worth, the value of the property. Everyone in this place would know that the most critical part of the equation here is not necessarily the land mass, as important as that might be to some people, but the value of the land concerned. Despite many myths, we are not a country of abundant water or land or soil resources; in fact, we are the driest inhabited continent on earth, and our soils, while very good in some parts, are very few and far between.
Alan Jones says:
We were promised a national agricultural land register. All we've got is a travesty … And we're told that this will show we've got nothing to worry about, because foreigners only own 13.6 per cent of agricultural land and Chinese outfits own less than 1 per cent of agricultural land.
He goes on to say:
Now if Scott Morrison and the government believe that this sort of bland whitewash will satisfy public concerns then they are kidding themselves.
So it is not just me. Shock jocks around the country have been belling the cat on this weak and meagre attempt to build public confidence in foreign investment in this country.
Why is this so? All we have had, as I said, from the government is an expression of concern about privacy. They told us that they were not allowed to do it. The public servants would not allow them to do it. This is not a fleeting promise we are talking about here; this is a promise that was made very convincingly during an election campaign and an issue on which the coalition parties made a lot of noise. But they expect to sneak this thing through now, underdone, and in turn expect everyone to be cheering it through both houses of parliament. Well, as I said, we will cheer this legislation through—this is enabling legislation—but we need to make the point that this is totally, hopelessly inadequate.
If you were a suspicious sort of person, given some of the musings we have heard from the Deputy Prime Minister in recent months, you might worry that this is a government that wants people to remain concerned about Chinese investment in agricultural land and sees that as a strategic and political advantage for it. 'Why would we want to educate the masses? Why wouldn't we just keep them in the dark? Why wouldn't we just fuel the xenophobic concern, which is more often than not steeped in misinformation?' It might be just a privacy issue, but I doubt it. Any government with wit, will and determination in the 21st century could surely deliver on what it promised prior to the election. If it is not capable of delivering on what it promised during that election campaign then it should get out of the way, quite frankly. It should get out of the way.
I think, when we are trying to weigh up whether it is privacy or political strategy, it would be worth reflecting back on Minister Joyce's earlier performances. One of Minister Joyce's first acts as agriculture minister was to drive a change in the threshold on foreign investment screenings. For the first time in this country, we now have a discriminatory scheme. We in this place have all had a bipartisan approach forever to ensuring that we have a non-discriminatory immigration system, and rightfully so. But now we have a discriminatory foreign investment system. If you are from the United States, New Zealand or Chile, you face a screening threshold of about $1,000 million, I think. But if—
Mr Broad interjecting—
Well, the member for Mallee suggested we bring it down. That is an interesting intervention from the member for Mallee. I look forward to his contribution on the backpackers tax next time we have an opportunity, because he has been saying constantly in this place that 19 per cent is okay, but I was in the member for Mallee's electorate last week, and what do you reckon the growers in Mallee were telling me over there? Not happy, son! Not happy! A big tidal wave coming your way! In fact, I think the member for Mallee was the author of the 19 per cent backpacker tax. He was thumping his chest and saying: 'The government was going to put on a 32.5 per cent backpacker tax'—his government—'but don't worry. The member for Mallee's here. I'm going to make it 19. I won the war.' Well, the member for Mallee needs to visit the growers I shared a cup of tea with in his electorate last week and see how he is faring there, because I think he is in a little bit of trouble, and he might want to reflect next time before he claims credit for being the architect of a 19 per cent backpackers tax which is going to leave the fruit and the grapes rotting on trees and vines in his electorate. That is what he needs to reflect on. He says that we should further lower the threshold for countries with which we have a free trade agreement—an interesting contribution he makes there. But, as I was saying before I was rudely interrupted by the member for Mallee—I really wanted to stay on track prior to his intervention. Now he supports Minister Joyce's idea that we will have one threshold for what I will call traditional source countries but, if they are Asian, no, no, no, no, no! If they are Asian, you have to have a lower threshold. He sits there and he defends that with a smile while he advocates going even lower.
I return to the point I was making. The member for Hume argues very strongly, in the Greener pastures report, that we need foreign investment. Where are the big global inflows likely to be coming from in the 21st century? Largely from Asia, I suspect. So we need the inflows, and we need to build public confidence that this is a good thing for the agriculture sector. Building public confidence will be critical. But when the member for New England—no less than the Deputy Prime Minister—and the member for Mallee and others are running around the country saying, 'We need lower thresholds for Asians,' all they do is unnecessarily fuel community concern.
Now we have these thresholds all over the place, so instead of building that confidence we now undermine public confidence. This bill further undermines it by failing to give the broader community what the coalition promised to give them in the lead-up to the 2016 election—that is, to match Labor's commitment to have a proper land registry which allows people, with the click of a mouse, to see who owns what where and what they are paying for it.
Can I send an important message to some of those out there who hold concerns. Again, Chinese investment in agricultural land still runs a poor fifth to investment from four other nation-states. It is growing, and that is a good thing, because we need the capital—that is the obvious point I made. I said we need to be discerning and we need to ensure that the national interest is always at the forefront of our decision-making. But there is no downside in this investment. There will be exceptions, which will be taken care of through the Foreign Investment Review Board process. But it is a little bit counterintuitive that people like the member for Mallee hail the preferential trade agreements with China, Korea and Japan as the most wonderful thing that has ever happened to the Australian economy and say that we are now on the level playing field. Why does he argue that these are a wonderful thing? Because he says that, by getting access—we will just put aside all the non-technical barriers, which he has not dealt with, for the moment—at the same tariff rate as our competitors or a zero tariff rate, we are now on a level playing field. That is true. That can only be a good thing. But what he is also arguing is that it opens the markets into those countries. It gives us an opportunity to sell product into those markets. But when a Chinese investor comes here and not only buys agricultural land but invests in water infrastructure, fencing infrastructure and innovation which lifts the productivity of that land, and also comes with a ready-made market into China because, as a Chinese national, he has that access, that is a bad thing! It is counterintuitive. He is contradicting himself. You cannot argue that opening markets into China is a good thing but then argue that a foreign investor bringing money to lift productivity in this country and to sell into Chinese markets is a bad thing. It does not add up.
I default, sadly, to the second conclusion of the two. Was it privacy? Were they really told that they could not do the register because someone in the Public Service told them it might breach privacy, or do they just want to keep the issue alive in the electorate? Do they want to promote and grow fear in the electorate with respect to foreign investment in agricultural land? Sadly I conclude that the second is the correct answer to this question, and they should hang their heads in shame.