Madeleine King (Brand, Australian Labor Party, Shadow Minister for Trade) Share this | Hansard source

The minister noted that the government committed to deliver this annual statement in 2013, and I thank the minister today for making this statement to the House in 2021. Members may remember that last year's ministerial statement on investment was given by the former minister, Senator Birmingham, at an awards night dinner for exporters hosted by his own agencies. What a treat for those award winners—a half-hour, self-congratulatory speech from the minister! The 2019 so-called annual investment statement is, of course, nowhere to be found. This is emblematic of this government's basic instincts of spin over substance, announceable over action, photo-op over follow-up. Instead of subjecting the government's record to the accountability of parliament, the former minister gave a self-indulgent speech at his own party. So I'm very glad, and welcome the fact, that the government has brought the annual investment statement back to the parliament after this two-year absence.

Australia benefits from an internationally competitive and open economy. While the discourse tends to centre on trade, international delegations, growing export market and free trade agreements—investment, the other pillar of economic strength and resilience upon which the Australian economy balances, is, at times, overlooked. And, in the moments when it is not overlooked, foreign investment is weaponised by populist politicians seeking to inject fear of foreign investment into the community. In truth, Australia has depended on foreign investment for its development since British settlement. Since that time, foreign investment has changed and grown. Of the approximately $4 trillion invested in Australia, which includes passive portfolio investment, most is from the United States; the United Kingdom; Belgium, acting for the EU; followed by Japan. Of the $4 trillion total, around $1 trillion, as the minister noted, is foreign direct investment. So foreign direct investment makes up around 25 per cent of all incoming foreign investment to this country.

The first regulation of foreign investment in Australia emerged in 1972. The catalyst was a curious food product present in bain-maries at roadhouses around the country. The Chiko Roll was sold in the tens of millions per annum when the US company IT&T sought to buy the Aussie company. The idea of Americans buying out an Australian food icon led to an immense public backlash. The controversy reached this parliament—well, it was down the hill then—and it has been noted that the cabinet meeting over the Chiko Roll was the beginning of the regulation of foreign investment in Australia. I thank my colleague the member for Fenner for reminding me of this curious fact, and I do recommend his work on openness, which sets out a very good case for an Australian society and economy that is open to the world.

The sale of Australian brands remains controversial. Some might recall the public discourse, verging on an Armageddon event, when Vegemite was sold to a foreign company. But often this is the only way to save a business. The question is: would we rather lose the product entirely or have it be saved and have the investment to reinvent that product? We see the story of RM Williams, created in 1932 and owned since 2013 by the luxury brand the LVMH group. It has now been returned to Australian ownership. It's a great story.

Foreign investment creates opportunities and it creates jobs for Australians in Australia. Think of resources companies like Rio Tinto and BHP and how many people they employ. Both iron ore giants are three-quarters foreign owned and they engage 45,000 and 22,000 employees and contractors respectively. The resources industry is more broadly central to the history of foreign investment in Australia. In April 1985, Bob Hawke stood alongside Chinese Communist Party boss Hu Yaobang atop an iron-rich hill in the Pilbara and commenced a new era of Sino-Australian economic relations. Hawke's ambition that day was for China and Australia to invest jointly in an iron ore mine, a prospect he'd raised with Premier Zhao Ziyang in Beijing a year earlier. Prime Minister Hawke's active involvement paved the way for the signing of the Channar joint venture agreement between Rio Tinto and Sinosteel in 1987. This was China's first major overseas investment. More than 250 million tonnes of iron ore have since been shipped to China, creating thousands of jobs and billions of dollars in export revenue for Australia. In 2020, China's foreign investment in Australia totalled over $70,000 million. That accounts for two per cent of foreign investment and is our ninth-largest source of such investment.

The US and the UK remain the biggest foreign investors in this country. Another significant contributor of foreign direct investment is our regional neighbour Japan. Japan has been one of Australia's largest trade and investment partners for more than 60 years, and this is a testament to the strong ties that bind our two countries together. Japan helped build Australia's LNG industry. LNG requires big outlays, even compared to iron ore production. Shell and BHP in joint venture partnership with Woodside had to pay $3 billion upfront to start developing the North West Shelf due to the complex system of drilling offshore, processing offshore and liquefying for export.

Once the Whitlam government approved LNG exports in the 1970s, the Western Australian government secured Japanese capital investment via long-term sale contracts to build a gas pipeline from Dampier to Perth. The pipeline covers more than 1,597 kilometres, starting from the Burrup Peninsula in the state's north-west and finishing near Bunbury in the state's south-west. This allowed for the remainder to be sold off to power other projects in the Pilbara. The Dampier to Bunbury pipeline still plays a central role in WA's economy, bringing natural gas from the Pilbara to electricity generation plants near the population centres in the south. It's a remarkable achievement. The first LNG cargo from the North West Shelf arrived in Tokyo in 1989. LNG cargoes continue out of Karratha to this day, and, more recently, the Japanese company INPEX established the Ichthys project off the coast of Western Australia and in Darwin with an investment of $40 billion. With this, Australia has become the destination for Japan's largest ever overseas investment.

Such a strong history of investment in this country should cause us all to ask: where to next? The minister's statement takes us through what everyone else is doing in relation to critical minerals and rare earths. But what is the government doing to try and supercharge this future-facing industry? There are a few policies there, but I'd argue it's not terribly much, and it's definitely not enough. There is much said about establishing a lithium battery industry in this country, but, as yet, we haven't seen a government effort to attract investment from the battery-producing powerhouses of Japan and South Korea to build Australia's capacity beyond basic processing of lithium, nickel and rare earths. The truth is that, under this government, business investment is going backwards. Investment is down over 20 per cent since the Liberals came to office in 2013. Investment is at its lowest level since the 1990s recession, and this was before the pandemic. The COVID-19 pandemic cannot always continue to be an excuse for underperformance. The Abbott-Turnbull-Morrison governments, over eight long years, have simply not provided the right investment conditions to support the economy across key areas like manufacturing, energy and resources, the care economy, and research and development.

Right now, the greatest threat to critical foreign investment is this government's lacklustre, lazy and frankly irresponsible approach to policy to address the true challenge of climate change. The minister set out some efforts, but I think this is too little, too late. Foreign investment funds are openly warning that they are considering cutting billions of dollars of investments into Australia because of this government's half-hearted commitment to a 2050 net zero emissions target. The Investor Group on Climate Change, which includes AustralianSuper—the nation's biggest super fund and among the top 20 in the world—UniSuper and Lendlease, released an analysis last month confirming climate policy uncertainty was a turn-off to international investors. Australia has become among the least attractive destinations for institutional investment in clean energy for industries of the future.

This is a damning indictment of this Liberal-National government. It has failed to put forward any believable policies, and the result is that erstwhile international investors in Australian industry turn away and look elsewhere. The deputy governor of the Reserve Bank Guy Debelle recently warned of climate risks in the Australian financial system. He made the very obvious point, which this government likes to ignore:

Investors will adjust their portfolios in response to climate risks. Governments in other jurisdictions are implementing net zero policies. Both of these are effectively increasing the cost of emissions-intensive activities in Australia. So, irrespective of whether we think these adjustments are appropriate or fair, they are happening and we need to take account of that. The material risk is that these forces are going to intensify from here.

I'd like to reflect very briefly—

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