Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Hansard source

I am very pleased to rise to speak on the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015. As you know, foreign investment is extraordinarily important to Australia's economy. We are a nation which imports capital. We have done so throughout our existence. We have more investment opportunities in Australia than can be satisfied with our stock of domestic savings and therefore the import of capital is very much in Australia's national interest. And of course capital is imported in two principal forms: debt and equity.

We have a regulatory regime which deals with the provision and the exercise of foreign ownership of Australian land and assets. That regime exists under the Foreign Acquisitions and Takeovers Act and, as speakers this evening have reminded the House, the key provisions of that act have been in place for many years.

It is very important that public confidence in the regime which regulates foreign investment is maintained. It is important that Australians understand that there is a set of rules which applies to foreign investment and it is important that Australians understand that those rules are rigorous and enforced. The coalition while in opposition became aware of community concern in relation to aspects of the foreign investment regime—for example, in relation to agricultural land and whether there was sufficiently granular data available as to the extent of foreign ownership of agricultural land.

That concern, amongst others, is addressed by the measures in the bill before the House this evening. This bill introduces measures which will establish increased transparency in relation to the levels of foreign ownership in Australia through a comprehensive land register. It is very important that public confidence in the foreign investment regulatory system is maintained so that we can continue to be a country which successfully imports capital which allows those important investment opportunities to be taken up, thus generating greater prosperity in the interests of all Australians.

I particularly want to commend the work of the Parliamentary Secretary to the Treasurer, my friend and colleague the member for Higgins. The member for Higgins and I comprise the class of 2009. We came into this parliament in by-elections held in the electorates of Bradfield and Higgins on 5 December 2009. In that respect I want to acknowledge and note the campaign being conducted by Andrew Hastie, the Liberal candidate in the by-election currently going on in the seat of Canning. I am confident that Andrew, who is an outstanding candidate, will deliver the right result for the people of Canning and for the people of Australia, will come into the parliament and will make a strong contribution. As somebody who has survived a by-election held simultaneously with a by-election which, happily, brought the member for Higgins in this place, I particularly want to commend Andrew Hastie for the excellent campaign that he is running.

Prior to her present role as Parliamentary Secretary to the Treasurer, the member for Higgins was, of course, the Chair of the House of Representatives Standing Committee on Economics. In that capacity she led a very important inquiry into foreign investment in residential real estate. Again this goes to the question of maintaining public confidence in our system of regulation of foreign investment. We have a set of clear rules in relation to foreign investment in residential real estate. We have a set of clear rules which apply certain principles when it comes to the purchase of established residential property and different principles when it comes to the purchase of new—or 'off-the-plan'—residential property. The policy principle, of course, is that, while there are material restrictions on the purchase of existing residential property, there is a somewhat different approach taken in relation to off-the-plan residential property, the rationale being that the capital which goes into a new piece of residential property is then, of course, increasing the aggregate amount of housing stock.

There is a set of rules. In essence, a foreigner who is not resident in Australia is not permitted to purchase existing residential real estate in Australia, That is a longstanding rule reflecting the policy principles which have been agreed and put into effect by the parliament. Unfortunately, the rules have not been effectively enforced. The inquiry conducted by the member for Higgins and the House of Representatives economics committee explored the fact that there is not sufficient enforcement of the existing rules. A series of recommendations were made from that inquiry, and at least some of those recommendations are reflected in the legislation before the House this evening.

In particular, one of the key measures in the bill before the House this evening is a measure which provides for application fees to ensure that Australian taxpayers are no longer required to fund the cost of administering the screening of foreign investment applications, because it is an expensive process to carry out the necessary scrutiny and oversight of many transactions to ensure that the rules are being enforced. In reality, that enforcement work was simply not occurring to any adequate extent prior to the new arrangements which are given effect under the legislation before the House this evening.

Therefore, in relation to residential real estate we have a set of measures to give better effect to and better enforce the existing laws and policy principles. Consistent with the recommendations of the House economics committee, there is going to be the introduction of a range of new and stricter penalties because we cannot have the continuation of the situation which, effectively, exists today, where it is possible to breach the rules and not be subject to an effective deterrent.

I conclude my remarks on this very important piece of legislation by reiterating the importance of foreign investment. It is enormously important to Australia, a country which has been an importer of foreign capital throughout our existence. It is very much to our advantage as a nation because we have more opportunities for investment than our domestic savings pool can fund, but at the same time it is also critically important that we maintain public confidence in the regulation of foreign investment. The bill before the House this evening contains a series of targeted and well-developed measures which will very much go towards that important objective of maintaining public confidence in our foreign investment system. I commend the bill to the House.

Debate interrupted.

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