Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

Foreign investment is crucial for Australia's prosperity. That is as true today as it has been at every point in our history. Most of our roads, rail, ports, telecommunications and water infrastructure has been built with foreign capital. The same can be said for much of our public, private and commercial property stock. While Australia is only two per cent of the world economy, it accounts for five per cent of global property investment activity. Foreign direct investment has been particularly crucial to sustaining the 23 years of uninterrupted economic growth in Australia that we have enjoyed in recent times. The United States and United Kingdom remain the largest sources of direct foreign investment in Australia by far, totalling almost 50 per cent of all foreign investment in our nation. Despite the importance of foreign investment to Australia's economic future, and despite the 'open for business' rhetoric of the previous Abbott government, foreign investment, or at least some sources of foreign investment, is routinely demonised by those opposite for political ends.

The bills before the House contain three related pieces of legislation relating to foreign investment in Australia: the Foreign Acquisitions and Takeovers Legislation Amendment Bill, the Foreign Acquisitions and Takeovers Fees Imposition Bill and the Register of Foreign Ownership of Agricultural Land Bill. These bills outline a series of new arrangements governing foreign investments in real estate property, farmland and business. They seek to strengthen the enforcement of foreign ownership laws, introduce an effective user-pays system for foreign investment and drastically reduce the threshold for assessment of acquisitions by the Foreign Investment Review Board.

When Joe Hockey, the member for North Sydney, was still the Treasurer and not the seat warmer for the current Minister for Social Services, he used to talk up this bill as though it were some kind of silver bullet for Australia's housing affordability crisis. In fact, this bill represents the sum total of the government's housing affordability policy—from their perspective, it has to be the silver bullet because it is the only bullet in the chamber. True, the Treasurer had promised to release a housing affordability policy in the lead-up to the last election, but, like many other promises made by the former Abbott government, it has not been forthcoming. In fact, the government has done its best to grind real political change on this issue to a halt.

Just two months after coming to government, the government abolished a range of non-statutory bodies, including the National Housing Supply Council. The council's role was to provide projections and policy advice in relation to housing supply and demand. The council's terms of reference included: to strengthen the evidence base for decision making by advising the minister for housing on the state of the housing market, including land supply and construction; to examine the implications of city planning and infrastructure projects on housing availability; and to provide advice to the minister for housing to improve housing supply and affordability, particularly for low-income households. However, just as the minister for housing was abolished under the former Abbott government, so too has the council. Abolishing non-statutory bodies like the National Housing Supply Council leaves the government without important analytic tools and institutional support and exacerbates the problems they were introduced to address.

If we are going to make progress in tackling the affordability problem in the residential property market in Australia, we must focus on increasing housing supply through the construction of new dwellings—a goal that will unavoidably rely heavily on foreign capital. Yet the Property Council of Australia's submission to the Senate Economics Legislation Committee argues that the changes in this bill could exacerbate this problem and contribute to an increased rise in the cost of housing. The Property Council's submission stated:

The cost of these [new] fees will not only impact the feasibility of a particular project, but will in all likelihood be passed on to the end purchaser. This is particularly important for residential developments, where the costs will be directly added to the end price of a house, serving only to increase the cost of housing in Australia.

We will see whether this transpires. What is clear, however, is that foreign investment should be a part of the solution to the housing affordability crisis in Australia by funding an increased supply of housing stock and should not be treated as some kind of bogeyman that is single-handedly responsible for putting the Australian dream out of reach of Australian families.

Yet the former Treasurer has treated foreign investors in residential property in Australia as being akin to some kind of cartoon criminal mastermind—indeed, caricaturing Commissioner Gordon from the Batman series. The Treasurer even convened a press conference in Sydney to announce the divestment of seven residential properties illegally acquired by these super villains. It might have been amusing if it had been a puffed up suburban real estate agent. But, for the Treasurer of Australia, it was just sad.

In the open, diverse, multicultural and modern Australia that we all live in, there is a high cost to the symphony of dog whistling that we have heard on this issue. Some of the media coverage that has been invited by the government's rhetoric on this issue has been appalling. An article in The Australian last year quoted unsubstantiated claims that foreign buyers of Australian property added 10 per cent to the price of Australian homes. This article quoted a real estate agent as saying:

… easy to tell when buyers were unlawful foreign investors purchasing in their sons' and daughters' names because you could see them talking to their parents on the phone throughout the auction.

As a member of an electorate with a large Asian-Australian population, I can say that it takes more than a phone call to mum and dad and a few foreign words to determine someone's citizenship. Around 15 per cent of Australians describe themselves as being of Asian heritage. And guess what? Like other Australians, they need a place to live. And they often participate in housing auctions to buy properties. Many of them will call mum and dad for advice when buying a home, like most Australians do—and like my family did. The description in this article could have easily been made about Asian-Australian members of my family, like my wife—Australian citizens, all.

Another article in the Herald Sun this year, entitled 'It is not racist to point out these home truths', claimed that Asian buyers were making property unaffordable in Australia. The article even made the extraordinary claim that in some Australian schools:

… Australian-born children are outnumbered 10 to one by newly arrived Chinese students.

This is, frankly, a nonsensical statement. I challenge the author of this article to name one school in Australia that would meet that definition. I represent an electorate where over 60 per cent of the population were either born overseas or their parents were born overseas. I can tell you that not one of the 50 schools in my electorate come close to matching that definition. Most disturbingly, this article frequently conflated foreign nationals with Asian-Australian citizens, drawing a distinction between 'Australian-born children', 'new residents' and the 'newly arrived'.

According to the Reserve Bank, the majority of the Asian faces at auctions in Australia are Australian citizens. Based on Foreign Investment Review Board approval figures and data from the Australian Bureau of Statistics, it is estimated that Chinese residential real estate investment totals round two per cent of all residential real estate transactions in Australia. In a 2014 report on the Australian residential property market, the RBA noted that 'foreign residential purchasers do not appear to have a major presence' in the Australian property market and that:

… the degree of competition with foreign buyers is still likely to be fairly small.

We do our Asian-Australian communities a great disservice when we allow ourselves to buy into this kind of scaremongering. Yet the symphony of dog whistling that has been kicked off by the government's rhetoric on this issue has not been restrained. It should be below the government to use the politics of xenophobia to divide Australian society for political purposes, and I call on the new Prime Minister to put an end to it.

We should investigate allegations of breaches of foreign investment laws but we should not pretend that this alone will fix the broader problem of a lack of supply in the Australian housing market. That is the core of the housing affordability issue in Australia.

We see a similar story in the agriculture sector. Foreign investment is a key driver of our agricultural sector. For years, Australia has been positioning itself to be the food bowl of Asia, preparing to supply the increases in demand for more high-value food for our region in the coming decades. In a few short decades, the Philippines, Indonesia, Thailand, Vietnam and Malaysia will join India and China as some of the biggest economies in the world. By 2050, our region will be home to 10 of the world's 25 largest economies. The Asian century will make our region more populous and more prosperous. Australian agricultural exports should be one of the big winners from this process.

To take full advantage of the increase in demand from the soon to be 'dining boom', we need to increase the productivity of our agricultural sector. We need to increase the output of our agricultural sector. We need to increase the efficiency of our agricultural sector. To fully capitalise on this opportunity, the sector will need huge amounts of capital investment, mainly sourced from foreign investment.

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