Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

I move:

That this House:

(1) notes that:

(a) water is a scarce and highly valuable resource in Australia; and

(b) Australia is prone to droughts and many parts of our country have recently experienced their worst droughts in living memory;

(2) registers its concern that:

(a) foreign entities, some implicitly backed by foreign governments, are substantially increasing their holdings of Australian water rights;

(b) Australian agriculturalists are increasingly competing with these foreign entities to secure the water rights upon which their livelihoods depend; and

(c) the acquisition of water rights is not directly subject to the approval of the Foreign Investment Review Board;

(3) congratulates the Government on committing to reform the legislation governing the Foreign Investment Review Board; and

(4) calls upon the Government to, in those reforms:

(a) ensure that water rights are directly subject to Foreign Investment Review Board approval, independent to the acquisition of agricultural land to which those rights sometimes attach; and

(b) lower the threshold for Foreign Investment Review Board approval for agricultural and water rights to $5 million.

It is often said that Australia is a great trading nation. An Australia that is open to the world, to new ideas and to trade and foreign investment opportunities is an Australia with a bright future. However, when foreign interests seek to take significant ownership or control of an asset of national importance, we must always ensure that we fully scrutinise that purchase thoroughly and, most importantly, subject it to public interest.

The interest in Australian farming by foreign investors has grown considerably. The share of agriculture in total foreign investment has risen from 0.1 per cent in 2006-7 to 2.1 per cent by 2011-12. Stock Journal reported this year that 13.4 per cent of Australian farmland had some level of foreign ownership. Farming and land are very much attached to water. Unfortunately, foreign dollars have been all too blinding of our policymakers, and they're blinding them to the short- and long-term risks to our livelihoods and our national security. For these reasons, Centre Alliance and former senator Nick Xenophon have always advocated for more stringent security and scrutiny of foreign investment. We all know too well the Port of Darwin example, but today I wish to focus on the importance of making water right purchases subject to government approval.

Like many, I was utterly astounded to learn that foreigners can purchase any amount of Australian water rights without the need for review by the Foreign Investment Review Board. The Treasurer's announcement that the government is looking to legislation in this space for consultation in July is to be welcomed and commended, but the government's media release did not mention water rights, and it must. It is the perfect truism to observe that water is a limited and scarce resource in Australia. Australia is the driest continent on the planet. Coming from the driest state in the country, I feel like this is even more of an issue in South Australia. For us, water is liquid gold. The lifeblood of Australian farming livelihoods is water, and it always will be water. Current and future generations of Australian farmers need reliable access to water to safeguard their livelihoods.

It's easy to resort to nostalgia and sentiment to oppose foreign investment, but I want to be clear that government scrutiny on these decisions should be based on a clear-eyed view of the long-term benefits to Australia. I recognise that foreign investment has the potential to increase jobs and, potentially, tax income for the government; however, this potential has not always been realised. The average Australian farmer can be guaranteed to spend their money within the Australian economy, even if it is on foreign imports sold by local businesses. Thus when water or agricultural rights are sold to foreigners, the cost to future generations of Australians is substantial and looks set to be multigenerational. You can only sell the farm once. You can only sell the water rights once.

Of course, sometimes foreign investment is needed because domestic funds are not always available to develop farm businesses or assets. However, I have always advocated that there are other ways to resolve this quandary, such as joint investment models. We do not need to resign ourselves to thinking that every sale of any substantial farmer asset should be a foreign takeover. We should have greater flexibility across our local Australian superannuation and across other measures to make sure that we can retain as much as possible in Australian hands.

Another clear-eyed reason for subjecting sizable foreign purchases of water to scrutiny is to guard against the destructive speculation occurring within the Australian water markets. Water markets are not like the Australian stock market. Unlike the human creativity and entrepreneurship that we see in the stock market, water is a finite resource. It is limited, it is capped and it cannot reasonably be expected to grow. Speculative manipulation without productive gain can destroy, and is destroying, Australian livelihoods.

The lack of government scrutiny on foreign purchase of Australian water rights is a patient loophole that urgently needs to be closed. I call on the government to include water rights within their Foreign Investment Review Board reforms.

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