Thursday, 3 December 2020
Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, Australia's Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill 2020; In Committee
The government does not support this amendment. We discussed it during the debate in the committee stage for some time yesterday. The government absolutely recognises that foreign investment must be in our national interest. Foreign investment is a vital source of funds to maintain and enhance Australia's infrastructure networks—our assets. Investment in critical assets, however, must not be contrary to the national interest.
I can confirm to the chamber again that the Port of Darwin arrangement was not covered by the foreign investment regime in 2015. But, given the changes that have been made since 2015 by this government, similar leasing and acquisition proposals would now be covered and would require a formal FIRB process going forward. The Prime Minister repeated in June of this year, during the announcement of the upcoming foreign investment reforms:
The Darwin Port was not sold with the approval or authority of the Commonwealth Government. It was not. At that time, sales of assets by Territory governments, state governments, did not require and did not call in the authority of the Foreign Investment Review Board or the Treasurer. As a result of that, I engaged with all the states and territories and had the rules changed and that came into effect in March of 2016.
As the Prime Minister has said, the lease decision wasn't solely on the basis of the decision of the Northern Territory government. Of course, that decision could only be explained by the Northern Territory government of the time.
The issues in the system that that sale identified were addressed by our government—indeed, by the Prime Minister when he was Treasurer. In March 2016, the then Treasurer added those additional safeguards to Australia's foreign investment framework. Working with the states and territories, the government amended the Foreign Acquisitions and Takeovers Regulations so that the FIRB would assess the sale of critical state owned infrastructure assets to private foreign investors. In addition, in 2017 the government established the Critical Infrastructure Centre. The centre provides coordinated and comprehensive assessments of national security risks to critical infrastructure in the ports, water, electricity, gas and telecommunications sectors. The centre is also responsible for the administration of the security of the Security of Critical Infrastructure Act 2018. That act also established a critical infrastructure assets register, a ministerial last-resort directions power to manage the risks to water, electricity, gas and port assets. These legislative measures must ensure that the government knows who owns and operates our most critical assets and is able to mitigate any identified national security risks. Of course, departments coordinate on this basis: they bring matters of concern to the attention of the Treasurer, who then consults across government, including with my department and, where necessary and appropriate, with the foreign minister on the ramifications for the national security risks identified.
The previous reforms which have been made by the coalition government will both complement and be added to by the comprehensive reforms to the foreign investment review framework, introduced to parliament by the government in October of this year. These are reforms which also address national security risks, including those related to critical infrastructure. They strengthen the existing system, particularly as it relates to compliance by foreign investments.
So I assure the Senate that the government takes these issues very seriously. We will always act in the national interest, as clearly shown by the development of this foreign relations bill, which will necessarily address a separate, but just as important, gap in our overall system.