Friday, 12 June 2020
Questions without Notice
My question is to the Minister representing the Treasurer, Senator Cormann. Minister, the Treasurer approves 99.9 per cent of all acquisition proposals that are first considered by the Foreign Investment Review Board. On those rare occasions when the Treasurer says no to foreign investment, he must find the proposed investment would be contrary to the national interest. The current legal framework, which can stop foreign ownership of critical or essential Australian assets, does not include the ownership of surface water or groundwater. As a result, unlimited amounts of water can be foreign owned in Australia. At the end of 2018, the ATO reports that 10 per cent of all water entitlements in Australia were in foreign hands. Minister, is there any percentage of foreign ownership of water that would cause the government to consider it contrary to the national interest?
I thank Senator Hanson for that question. The first point I would make is that Australia does rely on foreign investment in order to reach and meet our economic growth opportunities. We are a capital importer in order to develop our economy, though it is important that any foreign investment is not contrary to the national interest. We have a well-established framework in place to review foreign investment proposals to ensure that they are not contrary to the national interest. That scheme has broadly been in place since 1975. In more recent times a number of reforms have been announced in relation to this, fundamentally to strengthen the level of scrutiny in the context of relevant proposals coming forward.
We've made some temporary adjustments in the context of the COVID-19 crisis to ensure that Australian businesses at this difficult time are protected from the threat of inappropriate foreign takeovers at a time of comparative weakness and challenge. We've also recently made some significant reform announcements in relation to national security sensitive businesses. Critical infrastructure is, of course, one of the areas where we've put some additional safeguards and powers for the Treasurer into this framework. I don't believe it would be useful to provide arbitrary targets around what would or would not be a desirable level of foreign investment in relation to a particular asset class. I think we've got to determine whether or not there is a particular reason why a particular investment would be contrary to the national interests. Ultimately, there is a high level of discretion for the Treasurer to make relevant judgements in this place. But let me just conclude on this point: foreign investment is very important for our future economic growth and success and for the opportunity— (Time expired)
In 2014-15, DFAT and the ABS compared majority foreign owned business with Australian business and found that over 50 per cent of wholesale businesses, 40 per cent of manufacturing, 36 per cent of mining, and 25 per cent of electricity, gas, water and waste services in Australia are foreign owned. Is there any level of foreign ownership contrary to the national interest in any essential industry or service that would concern this government? If so, what percentage would that be?
I'm not aware of the sources of the data that Senator Hanson is quoting. I'm happy to review those and engage in a conversation in relation to these matters. What I would say is that foreign investment contributing to the growth of businesses around Australia and the growth of jobs around Australia is something that helps provide increased opportunity for Australians to get ahead, to get a job, get a better job or pursue a career. That is something that is very much in our national interests.
On 1 January 2020, China introduced its foreign investment law based on a negative list of industries, provinces and cities where no foreign investment is permitted. Where foreign investment is permitted, a Chinese company must have a controlling interest. Will the government introduce a similar approach for Chinese investment in Australia?
That is not something that we're considering. We've recently announced the most substantial reforms to our foreign investment review arrangement in nearly 50 years. We do think it's important for us to continue to facilitate foreign investment in Australia as long as it's not contrary to the national interests, and we do believe that the framework that we have in place has stood Australia in good stead.