Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

in reply—I want to thank all those members who have contributed to this debate on the bill. This bill is a straightforward but important reform to improve the integrity of Australia’s foreign investment screening regime. The bill implements my announcement in February 2009 that the Foreign Acquisitions and Takeovers Act would be updated to reflect the more frequent use of complex investment instruments such as convertible notes and warrants. These types of arrangements have a solid commercial basis but were not envisaged when the act was originally drafted. The bill clarifies that under the act the government can examine in the national interest any investment proposal that could deliver substantial influence or control now or in the future of an Australian company valued over the threshold. The bill applies from the date of announcement, 12 February 2009, to provide maximum certainty around the act’s application while providing flexible and sensible transition provisions.

The bill is consistent with Australia’s international obligations by keeping to the act’s original policy intention. The Australian foreign investment regime has helped to deliver significant benefits to the Australian economy. Foreign investment has spurred growth, competitiveness and jobs in the Australian economy. Access Economics has estimated that 14 per cent of all Australian jobs are attributable to foreign direct investment. Foreign investment drives innovation, skills development, technology and healthy competition. The government is committed to a regulatory regime that gets the balance right, protecting the national interest while ensuring that Australia is a competitive destination for foreign investment.

I have in recent months announced additional changes that go to this question of balance, which are not dealt in this bill. The foreign investment framework must keep pace with changes and trends if it is to remain effective. This bill clarifies that the government can screen investments that involve complex financing arrangements in the same way as traditional shares or voting power. Supporting this bill will improve and safeguard the integrity of foreign screening. This is one important part of an effective foreign investment approach that is well-established and familiar to international investors. This is good for Australia and so important as we prepare the Australian economy for the growth beyond the global recession. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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