Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

Before I recommence my comments in relation to the bill before the House: the Minister for Defence has recently made an important contribution in a ministerial statement in relation to Australia's involvement in the Middle East, in particular Iraq, Syria and Afghanistan, and I would like to join with him and associate myself with the comments of both the minister and the member for Sydney on behalf of the Nationals. It is good to see such a bipartisan spirit in relation to our commitment to help protect and train foreign forces in a way that is helping to provide some prospect at least of peace and stability in a troubled region of the world. I had the opportunity earlier this year as part of the ADF Parliamentary Program to travel to the Middle East with a contingent of members of parliament. We went to Afghanistan and had the great experience of spending some time with our troops on the ground and seeing the work they are doing working with the Afghan National Army in helping to put them in a position where they can perhaps survive the fighting season and deliver more security for the people of Afghanistan. It was a great pleasure, honour and privilege for the members of parliament who were part of that program. So, I associate myself with the comments made by the minister during his ministerial statement.

In relation to the bill before the House, the Foreign Acquisitions and Takeovers Legislation Amendment Bill: as I was saying before the break, I think it is well recognised that increased investment, both from within Australia and from overseas, will be vital to realising Australia's agriculture's potential for further growth. According to a report three years ago, Greener pastures: the global soft commodity opportunity for Australia and New Zealand, which was commissioned by the ANZ bank, an estimated A$600 billion in new capital is needed through to 2050 to generate higher levels of growth and profitability in Australian agriculture. At the same time, it is essential that suitable checks and balances are in place to ensure that foreign investments are not contrary to our national interest and provide flow-on benefits for farmers, for the communities around them and for the national economy. All foreign investors must pay tax on their business profits made in Australia. Furthermore, the government requires any business operating in Australia, whether locally or foreign owned, to operate in accordance with Australian law, including Australian tax laws.

The coalition government has taken several steps to increase scrutiny and transparency around foreign ownership of agricultural land. This includes developing a foreign ownership register of agricultural land. The coalition is also significantly lowering the monetary threshold for screening of foreign investment proposals related to agricultural land and agribusiness from about $250 million down to $15 million and $53 million, respectively. The previous threshold was actually quite meaningless, because it enabled foreign buyers to purchase large tracts of land below that threshold. It would take a lot of dairy farms and a lot of vegetable flats in the electorate of Gippsland to ever trigger that threshold.

The legislation before the House has widespread support in the community. National Farmers' Federation President Brent Finlay said it would ensure a fact based discussion about who owns what in Australia. He said: 'We know that 99 per cent of Australian farms are owned by Australian families' and 'We need to see who's buying what so that we can have an informed discussion.' National Farmers' Federation Acting Chief Executive Tony Maher said that his organisation welcomed overseas investment but supported the current policy of close scrutiny.

In conclusion, Australians are, rightly, concerned about foreign investment, particularly in relation to agriculture. A poll conducted by the Lowy Institute for International Policy found that in 2013 a majority of Australians still considered that 'the Australian government is allowing too much investment from China', an attitude largely unchanged since 2010. I fear that a lot of that concern is driven by fear rather than by facts. So, I congratulate the minister on bringing this legislation to the House so that we will have the facts before us. People need information. They need information at their fingertips, and that is what this bill seeks to address. It can never be a bad thing to give people more facts to make informed decisions. Foreign investment is and will continue to be vital to the future prosperity of regional Australia. But it is equally important that we have a robust and transparent process to give us a clear picture of which foreign entities are investing on our soil. I commend the bills to the House.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

The Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 is indeed an important bill and an important initiative of the government. I can recall when I was studying economics last century reading the observations from the venerable British economist Joan Robinson:

The misery of being exploited by capitalists is nothing compared to the misery of not being exploited all.

I thought about Joan Robinson's comments the other day when Shell announced its $70 billion bid for the BG Group, which in turn had me thinking about a few other things in my own past, when I worked for Woodside Energy in the defence of Woodside against that Shell bid.

Fourteen years ago then Treasurer Peter Costello rejected Royal Dutch Shell's bid to take over Woodside, which was then and remains the operator of Australia's largest resources project for the North West Shelf in Western Australia. Woodside did not like being caught in the great eye of Royal Dutch Shell, and Peter Costello believed that Shell's acquisition of Woodside would not be in the national interest, because Shell would control, determine and sequence the development of Australia's liquefied natural gas industry in its interests alone. At the time, the Treasurer said he could not be sure that Shell would promote exports from the North West Shelf in preference to its competing projects elsewhere. In 2001 the North West Shelf was Australia's only liquefied natural gas LNG project, exporting about $7.5 million tonnes of LNG a year to Japan. Today, Australia has four operating LNG projects, six under construction, and expects to be producing about 80 million tonnes a year by 2018, to be the world's largest exporter of LNG. That would be a tenfold increase in LNG exports over what Australia produced in 2001.

By any measure, Peter Costello's decision served our nation's interest well. It was in, many ways, a landmark decision. It was quite counterintuitive for a pro-market Liberal government to make a decision to constrain a foreign investor's takeover activity in Australia. I guess that goes to the nature of intelligent government decision making and good frameworks for decision making, in that Treasurer Costello was able to make such a bold decision in the national interest.

I have already declared my interest, in that I was an employee of Woodside at the time. I was a vociferous and active campaigner to keep Woodside in Australian control and not to allow the takeover by Royal Dutch Shell. I can well recall a conversation with former Treasurer Costello in which I assured him that, if the government made the decision to allow the sale of Woodside to Shell, we would go quietly and, if he made the decision to allow Woodside to continue as an independent company, we would make him proud. On the basis of that argument alone, I felt very comfortable indeed that whatever decision the former Treasurer would make he would make in the national interest. I think by any reasonable level of conclusion—you can look at this through whatever lens you like, whether it be total dollars of export income earned, level of employment, level of skill, Indigenous employment and Indigenous benefit, regional development or royalties to state governments and local communities—this decision was the very cornerstone of an insightful growth in the LNG industry.

Ironically, Shell has learnt a trick or two in the intervening 14 years and is now set to achieve what Peter Costello denied it 14 years ago. It is seeking a dominant position in Australian and global LNG supply. We thought then that such dominance was not good, and I argued that as I worked for Woodside. The new combined BG-Shell companies—should Shell be successful in its current takeover bid of BG—will produce more than the world's next biggest LNG player, Catagas, which is a government-owned entity, and will produce more than double the next global publicly listed LNG player, Total, in France. Under the deal, Shell's annual deliveries of LNG will rise from around 34 million tonnes a year to 45 million tonnes, which is around 20 per cent of current global LNG demand.

Among the jewels that Shell will get in this takeover bid are Australia's first east coast LNG project, in Queensland, on Curtis Island at Gladstone, which BG Group built and began operating in 2014. It is amongst the world's lowest cost new LNG plants and it is the first LNG-from-coal-seam-gas plant in the world. This is a good decision that Shell has made. I believe it will be a good decision and in Australia's interests for this transaction to be completed and to be completed forthwith. It is possible to see that, through the Shell takeover of BG, not only is a greater alliance created for the Arrow gas reserves but, importantly, a global player is brought into our east coast LNG export industry, with substantial domestic assets that allow the growth of a whole new business.

I reflected, when I came to the conclusion that the Shell takeover of BG was, in fact, very strongly in our national interest, on how arguments change and how the cycle changes and how the foreign investment review process allows for intelligent, iterative government decision making in our national interest. You see, Australia, as a growing nation, has always been an importer of capital, whether it be to grow our wool industry, our beef industry, our iron ore industry or our tin or copper industry. We have relied upon foreign investment. Our oil industry, our gas industry and our LNG production that I referred to all rely on massive amounts of foreign investment. The cities of Mount Isa and Broken Hill, the communities of the Pilbara, Mount Tom Price, Mount Newman and Kalgoorlie all rely, for their very existence, on foreign investment. So how we manage our foreign investment is critically important.

Trade and investment are effectively two sides of the same coin. To take advantage of new markets around the world, we need to support new production at home, and to support production we need investment. Increasingly, in the scale of the investment that we need, we need foreign investment. Foreign investment has therefore, through that virtuous cycle, been critical to Australia's growth and it is critical to our future prosperity. I guess that is why the National Farmers' Federation has estimated that, for Australian agriculture to reach the capacity needed to meet rising demand, it will require investment of between $1.2 trillion and $1.5 trillion over the next three decades. That is equivalent to our current gross domestic product over the course of the next three decades. That investment will substantially come from overseas. The former government, led by Mr Abbott, had what can only be described as a retrograde approach to foreign investment in agriculture. It imposed new barriers to foreign investment in agriculture and in agribusiness. I do not believe that those barriers can serve our interests as a nation well. It introduced a complex regime of differential and discriminatory thresholds for Foreign Investment Review Board screening of proposed investments, with no economic or foreign policy rationale—just a tawdry domestic political rationale. The government has reduced the investment screening thresholds for agricultural land to $15 million for investors from China, Korea and Japan, but not for investors from Singapore and Thailand, who enjoy a $50 million threshold. That seems to make no sense—$15 million for China, Korea and Japan and $50 million for Singapore and Thailand, while the United States, New Zealand and Chile enjoy a threshold of over $1 billion.

I take a very liberal attitude to foreign investment. I embrace it. I support it. I accept that not only my living standard but the living standard of my children is deeply reliant on a deep and steady flow of foreign investment. These difficult and discriminatory thresholds present not just a barrier to business but a confusion. Part of that confusion allows business models to be built around Foreign Investment Review Board approvals that cause, in and of themselves, substantial confusion too, as the investment lawyers get themselves involved in providing advice both to FIRB and about FIRB back to investing companies.

For any company that might be looking at this speech and the words that I am speaking now in the context of the Foreign Investment Review Board, my simplest and clearest advice is that investors should engage directly with the Foreign Investment Review Board and not indirectly through lawyers or third parties and intermediaries. You will find the Foreign Investment Review Board is staffed by highly competent people, making judgements and capable of understanding economic arguments in a most profound way. It is a group of public servants and advisers who have advised successive governments on the most difficult sets of decisions, and on very few occasions has it concluded to recommend against an investment. So the FIRB is not something that should be feared by investors. It is in fact an entity that should be embraced, engaged, informed and supported in all of the consideration of investment by overseas investors in Australia.

But I say again that the discriminatory thresholds that had been introduced in the course of the last few years make a mockery of the very good instrument that we have in the Foreign Investment Review Board. In this year's budget, the government announced $735 million in new application fees for foreign investors. I think this is a terrific idea. It is a good idea to make that charge. It is a good idea to make that charge on the entities that will be using the Foreign Investment Review Board, and it is the right way to go about placing that charge on such investors.

It is no surprise, of course, that I, with my background, would complain about the discriminatory thresholds and barriers. That complaint has been voiced on many occasions by the Business Council, the Food and Grocery Council and a number of other entities, from the Queensland Farmers Federation to the Chamber of Commerce and Industry of Western Australia. But we can as a nation take a lot of pride in how our Foreign Investment Review Board operates and the decisions that it makes. Not just on balance but on each and every occasion that we have needed the FIRB to step up and put in place a good and thoughtful decision, it has been capable of doing that—with the exception, I would say, of a decision made not so long ago in the context of Archer Daniels Midland and their bid for GrainCorp, a bid which those of us on my side of the House, from the public information that was available to us, were broadly supportive of but which ultimately, for reasons that I cannot fathom, was blocked by Treasurer Hockey. It was the first major US based foreign investment to have been blocked. It was in the agriculture sector. It was an important decision which the government made and which I do not believe has been properly explained. I believe that, in order for us to maintain investment at the level that we need it to be maintained at in our grain infrastructure on both coasts—and most knowledge that I carry is of the west coast; I do not claim to be knowledgeable at all about the east coast, but I do want to place on record my personal confusion at that decision by the Treasurer—in the context of the capacity to make profound and generationally significant decisions, a better decision was available to us—one that would have been more transparent and more clearly supporting foreign investment in our agriculture businesses and importantly, in that context, in the areas of logistics and of getting our product into markets.

Having said that, I support this bill and I look forward to watching its passage through both houses.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and the other bills associated with it. There are four important points here that we need to consider. First of all, modern societies need rules, but they must not be too onerous and they must be enforced and have significant consequences if individuals or entities choose to break them. The fourth point is that the people of Australia must have an inherent trust in the system, whatever that system is, whatever arm of government it is and whatever it refers to. The people have to have an open and clear understanding of what the policies of government are and how they work, and they must trust them.

I would like to expand on that just a little. First of all, we need rules. A lot of us do not like rules, but otherwise we would be driving all over the road. Otherwise we would be using substandard products. Otherwise our children would not have a standard education. Of course we need rules. We know we need rules, but they must not be too onerous. If rules are too onerous, either they inhibit investment and freedom or they are totally ignored, and a rule that is totally ignored is the most useless rule of all. There must be consequences. Most of our rules, in Australia, work on an honesty system. If we compare foreign investment rules to the taxation system, the taxation system in Australia relies on people putting in their personal return honestly, answering the questions honestly, and then paying their honest amount of tax. I cannot guarantee that everyone in Australia does that; in fact, I have a fair idea that there might be a couple who do not! But the reason most people lodge an honest taxation return is that they have some real fear that, somewhere along the line, they will be audited and, if they are found to be cheating on the system, they will be gone through like a packet of Epsom salts. That is a good system. It is the cheapest way to run the system. And so it is with all forms of foreign investment in Australia. We rely on the individuals—on the entities—to be honest. But there must be a reasonable chance of them actually getting caught and paying the consequences. If they are caught, those consequences need to be significant, because if they are not significant then the individual or the entity will do whatever they like and just thumb their nose and wear the slap on the wrist, as it were. For instance, we have rules around Australian standards, and I was speaking to one of the ministers' representatives only the other day about the importation of substandard products. Somewhere down the line someone has to sign a form to say, 'These imported goods are up to Australian design standards,' and there should be consequences if they have misled the customer. Just as with that system, so there should be—in the issue of foreign investment in Australia—serious consequences when someone gets caught.

Most importantly, at the end of the day we must have a system that has trust, because, in the end, if the public does not trust the system, it is destined for failure and it will be destroyed. If the public does not trust the system of—to use that analogy again—importing building products, if they are not up to standard, then eventually the outcry will mean that they will demand change. That system will not survive and there will be collateral damage along the way. That is why you need a system that is open and transparent and that the public trusts. That is what we are doing with this legislation and that is what the government is doing. It is not introducing reams of new restrictions. There are few alterations, but, by and large, they are enforcing the perfectly fair system that we already have.

This is brought to light mainly by the thriving—or should I say booming—Sydney house market. House markets are wondrous things. They can be driven by lots of things. The questions are: is the Sydney house market a bubble, and is it driven by negative gearing? There are many pundits out there who say that if we did not have negative gearing we would not have this bubble, or this boom, in the Sydney house market. I do not want to speak on the merits and demerits of negative gearing today, but the great question is: if you do not allow a full tax-deduction for investment in housing that then makes it a significantly different investment to everything else we invest in, in a business sense—like if we want to expand our chemist shop or our farm then, of course, the borrowings we take to do that will be a full tax-deduction—so why would you make housing different? But I do digress, because I am going off into negative gearing.

To come back to the Sydney housing market, one of the other factors of course is land availability. We know, when we look at these houses worth $1½ million, $2 million or $3 million, that if you knocked down the houses and replaced them they would be lucky to be worth $300,000 or $400,000. It is not the house—it is the land.

There are all kinds of reasons for restricting urban sprawl. Some of them are very good, and some of them are driven by state governments; some are driven by city councils, who want work out a way to harvest the uplifting prices, so they can put it back on their slate, if you like. And of course, land prices, or housing prices, can be driven by overenthusiastic bankers. They could also be driven by foreign investment—other people coming in and buying into those markets—or maybe those booming Sydney house prices are driven a little bit by all of those things and maybe not by any one in particular.

We do have rules in the case of foreign investment in the housing market, but, in reality, we find that they have been largely ignored. They are quite good rules with quite good reasons, but they have been ignored—either by disguising the identity of the real purchaser by using third parties, or even by not registering the sale. We have these rules, but as I said before, it is absolutely pointless if we do not enforce them, because they will be ignored. That is where we have got to in that issue.

This legislation—this cluster of bills—moves responsibility for the monitoring of foreign purchases to the Australian Taxation Office. They are a very sophisticated organisation. They have better systems for linking data and screening purchases, so they will have a much higher chance of identifying breaches of the rules that we already have in place. That will, in turn, enhance the public's confidence in the system and will underwrite the fact that we have a good level of investment in Australia—the right level—coming from the right places with the right controls on it. The increasing penalties will apply to that.

There is a partial amnesty on these land ownership issues, until 30 November, because as a government we want people to come forward and self-identify and say, 'Well look, yes, I really did do the wrong thing, but, now it has been pointed out to me in the nicest possible manner, I am willing to come forward and either divest that property or meet the regulations that surround it.' So that is where we are now in the housing market.

I will now turn to agriculture. Mr Deputy Speaker Goodenough, you would know that I would be vitally interested in agriculture, because that is the kind of electorate I come from and that is the kind of business I used to be involved in. There is a lot of hyperbole around foreign investment in agricultural land but, at its heart, there are genuine questions about its cause and effect on Australia and the lack of clear understanding of its quantum and range. There is a history here. I understand that, historically, the biggest investor in Australian agricultural land is the United States, followed by the United Kingdom. There is a long history in Australia of this type of investment, and there is no real evidence of bad outcomes as a result of that foreign investment in Australia.

One of the topics that I am quite keen to bring up when I am talking about this subject—one that you are probably aware of, Mr Deputy Speaker Goodenough, coming from Western Australia—is the Esperance Land Agreement Act, which was signed in, I think, the 1960s. It facilitated the importation of a lot of American money. American companies came in and cleared the country around Esperance and developed the farming properties there. At a later stage a lot of those properties were bought by the insurance industry. Interestingly, after some time, the insurance industry, decided that it was not so easy to make a buck out of agriculture in Australia and said, 'It's not such a great investment; we'll sell them off.' The result, of course, was that Australian farmers got really well-developed properties cheap. As far as I know, most of the land in that part of the world is now privately owned, mainly by families, and is very productive. It was a great outcome, and it would not have happened without foreign investment.

I have a friend in the south-east of South Australia. They have a property there where they run cattle. They wanted to invest in a 1,000 cow self-milking dairy, and the only people who were keen to bankroll it were Malaysian interests. They wanted all the milk—but, at the moment, it does not produce any milk. The owners of this land estimate that it would have led to five times the income coming off this certain amount of land. It has not happened at this stage, but the point is that it is pretty hard to be critical of that kind of foreign investment because, at the end of the day, if they pay too much and it is not a viable option, we will end up with a cheap asset here in Australia.

The questions that people raise around foreign investment in agricultural land seem to revolve around the strength of our transfer pricing policy and the Australian Taxation Office. If in fact they are using Australian inputs and Australian labour, which they are required to do under our regulations—and operating under our system of chemical application and the things to do to care for the land—and they are paying the correct amount of tax at the free on board stage, it is no different to anybody else owning that property.

But the government has listened to the people, because we know there is a lot of unease out there, and we have heard their concerns. I spoke earlier about how important it is in this area that people trust the regulations that are in place, that they trust the government and that they trust the system to look after them. Firstly, we are in the stage of developing a national register of foreign owned land—because, how does anyone make intelligent decisions about these issues if they are in an information vacuum? We cannot have a conversation without the facts. The register is essential, and we are working with state governments at the moment to bring that up to speed.

Secondly, the threshold for the Foreign Investment Review Board to look at the purchase of agricultural land has been reduced $252 million to $15 million, and it is cumulative. So, if an entity buys a $7 million farm and another $7 million farm and another $7 million after that, the tick goes off and the Foreign Investment Review Board will have a look at it. That does not mean to say that they will not be allowed to buy it; it just means that the Foreign Investment Review Board will ascertain whether the purchase is in Australia's interest or against Australia's interests. I think that is an important move. We can talk about the values, but there has only been one agricultural property ever sold in Australia for more than $252 million. So, if you are going to leave it at that figure, you may as well not have it at all. We have decided that we will reduce it, because people are concerned. As I said, if people are concerned and they question the system, eventually that mistrust builds up and it is likely to fail. So it is important that we give people that assurance.

The third thing is the $55 million threshold on the purchase of agribusinesses. I often say to people that I think the loss of control of agribusiness is actually a more dangerous thing for Australia than the loss of land, because in the end they cannot take our land back overseas. I will use as an example a product that used to be made in Australia but is no longer made in Australia—Blundstone boots. You can still buy them. They still look the same. They are still an Aussie product but they are not made here. The labels have been bought and they are made overseas. That IP is able to be shifted. So I think it is a little different. It is right that the FIRB should have a look at this industry. I think these bills are good value and I support them. (Time expired)

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

It is always great to follow on from the member for Grey, from South Australia. He understands the importance of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related bills. He knows that, in the lead-up to the 2013 federal election, in which he was successful in his seat, the coalition announced that it would be lowering the screening thresholds for foreign investment in agricultural land and agribusinesses and establishing a register of foreign ownership of farmland in Australia.

I am not surprised that the speakers' list for Labor has been exhausted. They are a bit embarrassed about this legislation. They have never been supportive of lowering thresholds. In fact, I well recall that, when foreign ownership was being discussed in the 43rd Parliament, Labor increased the threshold for farmland and agribusiness from $248 million to $252 million, which is where it sits now. That is far too high. I always argue that you could just about buy every farm in the Riverina for $248 million, let alone whacking another $4 million on top of that. It was just ridiculous.

In speaking to this legislation, I intend to provide a snapshot of a couple of towns within the Riverina. In this speech, I also intend to quote from an excellent article that the Australian Farm Institute published in February 2014.

This is important legislation. On 2 May 2015, the government announced changes to strengthen the integrity of the foreign investment framework. These measures included enforcement of the existing foreign investment rules by transferring the residential real estate functions to the Australian Taxation Office; and utilising sophisticated data matching systems and specialised staff with compliance expertise—and that is important, because we cannot have first homebuyers, or any homebuyers, being squeezed out of the market due to prices going up too high from foreigners coming in and buying off the plan.

Stricter penalties to make it easier to pursue foreign investors who breached the rules are also a part of the framework of this legislation. The existing criminal penalties will be increased from $90,000 to $135,000 for individuals, and divestment orders will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches of the residential real estate rules. Third parties who knowingly aid a foreign investor to breach the rules will also now be subject to civil and criminal penalties, as they should.

Importantly, with agricultural land, from 1 March this year the screening threshold for farmland was lowered from $252 million to $15 million, and that is cumulative. So you cannot buy a farm and then the farm next door and then the farm next door to that. Once it reaches $15 million, that is it. It will trigger a notice to the Foreign Investment Review Board, who will obviously look into it.

From 1 December 2015, a $55 million threshold, based on the value of the investment, for direct interests in Australian agribusinesses will be introduced. We have a good record in this space. I know when Archer Daniels Midland wanted to take over GrainCorp in 2013 that caused a huge amount of consternation in my wheat belt electorate of the Riverina. My father and his father before him had virtually paid for the silos and they felt, as did many other farmers, that they had also put a good investment down on the rail lines going to those silos. They questioned why an American company with, might I say, not the greatest corporate record, was able to come in and just absolutely take over. In that case, our farmers would have been left with their grain price being determined by a boardroom in Illinois, by Americans who would care not for how much wheat was grown in Australia or for the price that was going to be paid to our great Australian farmers.

Increased transparency on the level of foreign ownership in Australia through a comprehensive land register is also part of this legislation. An agricultural land register with information provided directly to the ATO by investors was established from 1 July this year. The government is in negotiations with states and territories to use their land titles data to expand the register to include all land, including residential real estate. Queensland is one state which actually has good records but, unfortunately, other states do not keep as good a record as they should. Comprehensive modernisation of the foreign investment legislation to reduce system complexity and compliance costs for investors is also part of this legislation.

For those listening, I will just give a snapshot of a couple of good rural towns within my electorate—the first being Temora shire, the mayor of which is Councillor Rick Firman OAM. The agricultural production in Temora shire to the financial year ending 2011—so these figures are a little out of date—was worth $181.4 million. Crops were worth $141 million; livestock slaughtered and other disposals, $27.8 million; and livestock products, $12.6 million. They are big numbers. That is just one of the towns of the 13 local government areas I represent.

Leeton Shire Council, the mayor of which is Councillor Paul Maytom, is going very, very nicely. In 2012-13, the gross value of agricultural production in the Riverina region was $2 billion. In Leeton, they did particularly well, helped by the establishment of a bulk agribusiness industrial park and intermodal facility at Wumbulgal, 30 kilometres west of Leeton. Capital investment on site over the next two years includes $40 million confirmed with another $42 million potential. This would translate to 586 jobs during construction and 146 full-time equivalents during the steady rate. This investment will remove over 34,000 vehicle movements onto rail.

The establishment of Walnuts Australia processing facility 10 kilometres north of Leeton at $4.2 million combined with 700 hectares of walnut trees represents a new industry to the shire worth $12 million. Walnuts Australia employs 55 staff in peak seasonal times and has a strong export focus.

Award-winning Southern Cotton is a $20 million investment by a group of farmers who continue to improve efficiencies and operations at the Whitton cotton gin. The gin processes 200,000 bales—that was the 2015 season—employs 52 staff at peak season and supports the trucking industry, farmers and agronomic services. It is not just the actual site, facility or the plant with all of these establishments; it is all the direct and indirect benefits that it brings to not just the particular shires like Temora or Leeton but the whole Riverina, the whole state and indeed the nation. This legislation is so important, because these agribusinesses cannot and should not be just taken over willy-nilly by a foreign investor without the Foreign Investment Review Board, the government and the Treasurer of the day having a say in it.

JBS Swift continued investment improvement at Riverina Beef in Yanco's premium product has recently yielded gold and silver medals as well as overall champion in the grain fed class at the Sydney Royal Fine Food Show Branded Beef Awards. The company's flagship, Riverina Angus, was awarded gold. They are going very nicely. They are a good company that took over from a Japanese company, and I appreciate that that is foreign owned, but they are bringing benefits and jobs to Leeton Shire and to the wider Riverina. They bought the place the right way. They bought the place, kept those jobs going and then increased the number of cattle from a few thousand to upwards of 55,000 head. The Wagyu breed is just about to go into that facility, and the first kills are expected in coming weeks.

Look at freight in Leeton. Annual yearly containers exported from Leeton number 18,000 20-foot-equivalent units. That is remarkable. Inbound and outbound containers to and from Leeton per year are 36,000 TEU. They are big numbers, and that is why we need to ensure that we protect at every opportunity that agriculture and those farmers to make sure that we do not have foreign investors coming in, buying up huge tracts of land, knocking down the fences and wiping out all the family farms that have made the Riverina great.

I quote from the February 2014 article in the Australian Farm Institute publication. It said:

Australia is selling off the farm to foreign investors, and won’t be able to feed itself in 20 years.

That is pretty damning. That is a pretty stark sentence. It says:

While anyone with a reasonable knowledge of Australian agriculture would immediately dismiss a statement such as this as pure fantasy, there has been plenty of media stories running these lines over the past 12 months, and it is an issue of increasing concern to voters. In fact a recent Essential Report (2013) survey found that 55% of Australians are opposed to the sale of Australian farm land to foreign investors, and only 22% are in favour, with the rest undecided.

The article examined the role of foreign investment in Australian agriculture and talked about some of the issues which were creating unease amongst people—not just people, I have to say, in country areas but, indeed, people in city areas as well. I hasten to add that I sometimes think that people in metropolitan areas—certainly the Greens—have no concept. I should say little concept in the case of some and absolutely no concept when it comes to the Greens for what goes on outside the bright city lights of Melbourne, Sydney and Brisbane. That is why this Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 is so crucial.

It is not just perception. The Farm Institute article talked about the fact that we would not be able to feed ourselves in 20 years, because the farmland would have been bought up, our markets would be dictated to by foreign boardrooms and, quite frankly, we would have very few farmers left. But this legislation prevents that. This legislation stops that and will bring some comfort and certainty to the many people who do get concerned when there are reports that our real estate agents are out in Asia, the Americas and Europe selling up all the farmland. This legislation will bring the $252 million for farmland back to $15 million cumulative and $252 million back to $55 million for agribusiness.

The member for Hunter is not in favour of this legislation. He has never been in favour of it and calls xenophobic the fact that we are introducing this legislation to the parliament. He is more in favour of there being a $1 billion threshold. I heard him, as the member for New England, the Minister for Agriculture, was talking about this particular legislation and other topics earlier today, just haranguing him over the desk, criticising him at every step of the way—totally unnecessary.

The people of Australia know that the sensible people are in charge of this government, and we showed that this week when there was a prime ministerial change. The Nationals got on board with a very good suite of measures that are going to benefit regional Australians. This particular legislation before you was something that the National Party fought hard for and introduced through the proper cabinet processes. That is why it is on the table here today. That is why we are debating it. The suite of measures that we have been able to negotiate with the new Prime Minister, the member for Wentworth, this week will see very important programs rolled out for regional Australians, for stay-at-home parents and for regional mobile phone black spots. They are good policies.

Of course, there is also moving water from the environment portfolio into agriculture, and that is so very important because we need the elixir of life to be able to grow all the food and fibre that I talked about earlier. We need our farmers—Australian farmers—to have the safety, security and knowledge that their farmland will be protected for them and for the generations to follow. It will be farmable by Australians with water in the agriculture portfolio because the Nationals along with the Liberals understand how important regional Australia is, understand how important agriculture is and understand that there is a very bright future for farming in this country.

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

I also thank the parliamentary secretary for his contribution. I am pleased to be able to rise in support of this important package of bills: the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015. This legislation implements the government's firm commitment to strengthening Australia's foreign investment framework to build on the integrity of our foreign investment framework and ensure that Australia maintains a welcoming environment for investment that is in our national interest.

The coalition government wants to increase scrutiny and transparency around foreign investment, reduce red tape and ensure that Australia is open for business, and this package of legislation helps do just that. It is about making Australia's foreign investment framework more modern, simpler and better targeted to changing demands and the expectations of communities like ours on the Central Coast. Of course, we want investment that boosts Australia's economy, creates new jobs and unlocks innovation. We welcome investment because it provides additional capital for economic growth, it provides employment opportunities, it improves consumer choice and it promotes competition. It can also lead to new technologies and infrastructure by allowing access to global supply chains and markets, enhancing our skills base. Simply, without foreign investment, Australian production, employment and income would be lower. But we need greater certainty and clearer legislation.

These bills represent the most significant overhaul of the Foreign Acquisitions and Takeovers Act since its introduction 40 years ago. I understand this issue was raised through the work of the House economics committee, which looked at the issue of a lack of compliance and enforcement of residential real estate rules, which was potentially undermining the overall integrity of the foreign investment framework. But before I go into detail about what this package of bills means, I would like to acknowledge and share with the House some of the many letters I have received from members of my community on the Central Coast. In recent months many people on the Central Coast have raised with me their concern about the house prices we are seeing in our region. For so many of us—not only on the Central Coast, but indeed right around Australia—the great Australian dream has always been to own our own home. But I know many parents are asking: how do we make sure that our kids can afford it? They see some of these house prices, they see some of the challenges and they watch their children trying to raise a deposit for a home price that seems increasingly out of reach. As somebody who has recently purchased a home on the Central Coast, I too have watched the house prices increase, even over the last couple of years.

But young Coasties are increasingly asking: how am I going to buy my own home? We know the house prices we are seeing, particularly on the Coast, are of course because people see the incredible attractiveness and the uniqueness of the region I live in. I think it is one of the most beautiful places in the best country in the world to live in. I spoke on air about this issue with the Sea FM breakfast radio team, Byron and Kristie, a little while ago. It was clear from the chat we had then that this conversation about housing affordability and owning your own home on the Central Coast is a really important conversation to have.

What are people in my electorate saying to me? Patrick and his family, from Daleys Point, wrote to me saying they have urged the government to act on this issue in the best interests of people. Lyn, from East Gosford, said the government should move quickly, and that her search for a home on the Central Coast had become, in her words, 'heartaching', because she felt she could no longer compete. Brendan from Tascott said to me—bluntly, but quite respectfully—that the ability of every Australian to own their own home is fast disappearing. Geoff from Koolewong said he wanted the government to use all its resources to check that purchases are above board. Terry at Phegans Bay said simply: 'This is a fundamental matter for my children and my grandchildren,' which is why he saw it as so important. So it is great to report to my constituents and, indeed, to people on the Central Coast, that not only are we debating these important measures today but we are already seeing our approach working. While we recognise that many factors contribute to inflated house prices, illegal foreign ownership of residential real estate is undoubtedly one of those many factors, and the government is pleased to be clamping down in this area.

I am advised that this morning there has been an announcement—the Australian Taxation Office is now investigating over 500 residential properties held by foreign owners, including multi-million dollar homes purchased by students with no income. The properties now under investigation are believed to have a total value of more than $1 billion, and I am advised that the Treasurer has signed several further divestment orders for properties ranging in value from $265,000 to $8.1 million. The foreign investors who are involved either purchased established property without Foreign Investment Review Board approval or had approval but their circumstances changed, meaning they were breaking the rules.

This is practical, significant change that we are seeing in action. Our approach will be further strengthened by this package of bills we are debating today. We are doing this so that everybody plays by the rules and, to ensure that there is integrity in the system, we need to do better at compliance. This package of bills introduces additional and stricter civil and criminal penalties to ensure foreign investors and intermediaries do not profit from breaking the rules. The Australian Taxation Office will be handed the responsibility for regulating foreign investment in residential real estate, which will further enable stronger enforcement, audit and compliance of the existing rules. The bill enables the lowering of screening thresholds for investments in agriculture to ensure significant investments in this sector are scrutinised. We are introducing fees on all foreign investment applications from 1 December this year which will make sure taxpayers are no longer funding the administration of the system, while providing additional resourcing to Treasury and the Australian Taxation Office to improve service delivery for investors.

To complement these changes we are establishing a register of foreign ownership. Again, this will be operated by the Australian Taxation Office. I am advised that the government has provided $47.5 million over four years to the ATO for this process, unlocking the tax office's ability to cover more than 600 million transactions annually. And it has already been shown to be working. I am advised that, since May, over 3,000 pieces of information relating to suspected breaches have come to light via data matching with third party sources including the Foreign Investment Review Board, Immigration, AUSTRAC and state and territory land title offices. Through the information provided by the public, together with our own inquiries, we now have 481 cases under active investigation. Foreign investors will also be required to register essential information about their existing holdings and subsequent acquisitions of Australian agricultural land. This will deliver greater transparency around foreign investment in agriculture.

I am advised that industry consultation has occurred throughout the policy development process and the drafting of this legislation, including releasing exposure drafts of the relevant bills.

On top of the new compliance powers we are giving to the ATO and additional powers being given to the Foreign Investment Review Board, the government are ensuring that Australians can have confidence that our foreign investment framework will be effectively enforced. I am pleased to be able to say that the government has already taken active steps to enforce the existing rules and act decisively on foreign investment breaches.

Criminal penalties will be increased from $90,000 to $135,000 for individuals and will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches. Third parties like real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor to breach the rules will also be subject to civil and criminal penalties.

Our approach also includes an amnesty period to encourage those who are in breach to come forward and self-report. Part of this is a reduced penalty period for foreign investors who come forward and self-report noncompliance before 30 November this year.

This bill also implements the government's commitment to lower the screening thresholds for investments in our agriculture. Since March, the screening threshold for foreign purchases of agricultural land has been lowered from $252 million to $15 million. The government is also introducing a $55 million threshold for direct interests in agribusiness from December.

This is a very important issue for many people in my electorate. I have had many conversations with people at 'listening posts', when I am out talking to members of my community in my electorate; when I talk to people over the phone; and when I speak at meetings around my electorate. I have to say that there is very strong support for what the government is doing in relation to this. I am very pleased to say that next month we will be holding a very important forum on this particular topic in my electorate.

In conclusion, I want to stress that we do want to see investment in Australia. We want Australia and Australian businesses to be able to grow, to thrive, to prosper and to succeed, and we want our Australian businesses to be able to create even more jobs and more opportunities for our future. May I just say that that is why I support the government's important China-Australia Free Trade Agreement. Under this landmark agreement, more than 95 per cent of our exports to China will become entirely duty free. This applies to wine tariffs of up to 30 per cent, beef tariffs up to 25 per cent, seafood tariffs to 15 per cent, dairy tariffs of 20 per cent and tariffs on our lamb, our cheese and our services, as well as our resources. For the minerals sector, for example, including the elimination of all coal tariffs, it is a boost of around $600 million.

This export agreement with China means more jobs and more growth for Australia—and for my electorate of Robertson and the Central Coast region—for decades to come. It delivers access for Aussie exports to this immense market, the biggest in Asia and home to 22 per cent of the world's people, yet Labor and the CFMEU persist in an ill-informed scare campaign. But I am pleased to say that people in my electorate do not buy this scare campaign. People in my electorate say to me overwhelmingly that the No. 1 issue they see is the opportunity to provide more local jobs, more opportunity for our young people and more opportunity for the 30,000 commuters who leave early every morning and return home to their families late at night from Sydney or Newcastle because that is where currently they find the job opportunities. I know that; my husband is one of them. So I am really passionate about opportunities to create more local jobs in my electorate on the Central Coast, and I have to say that the China-Australia Free Trade Agreement does just that.

I commend these bills to the House.

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

In speaking to this legislation, the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015, could I compliment the member for Robertson on her presentation here this evening and endorse, 110 per cent, the comments about the China-Australia Free Trade Agreement. It is going to dramatically improve our ability to access a market of 1.35 billion people. It is the best deal that China has ever done with any country. It is the best deal that Australia has done with any country. And it will set Australia up for the prosperity and the jobs that people in Australia should expect, given the growth and the tremendous opportunities that are emerging on our doorstep.

I am pleased to speak on this legislation because I am the minister for both trade and investment, and, of course, foreign investment is a fundamental part of Australia's economic lifeblood. For all of our settled existence since the first arrival of boats, we have relied on foreign investment. As a country, we have thin capital markets. The great quality of life that we enjoy as Australians has been inextricably linked to the different waves of foreign investment which we have enjoyed over 200 years and which have in so many ways maintained the quality of our infrastructure and innovation and produced the capital which we have invariably not had. Foreign investment has produced the capital to continue to maintain our industries, our logistics sectors and all of those services areas at a level which is world class. That means that we maintain our competitive position, and it is one of the major reasons that over the last 25 years Australia has enjoyed uninterrupted economic growth, when so much of the developed world has been on its knees at different times during that last quarter of a century. There has been a quarter of a century of uninterrupted economic growth, and it owes so much to the fact that we have such an open economy.

The legislation introduced by the Treasurer to modernise and improve our foreign investment regime fulfils an important election commitment. Foreign investment, the injection of new money into our economy, allows us to grow by directly creating new jobs and driving up our living standards. The government knows that foreign investment is integral to Australia's economy. The ability of our businesses and industries to attract foreign investment will continue to support growth in our economy into the future. It will continue to be an important driver of productivity, growth and the creation of jobs and wealth. I recall Vesteys in the north. Foreign investment from Vesteys developed much of the early infrastructure, the cattle yards, the abattoirs and the roads that were built in many areas.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

They bled us white!

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

A lot of the things that the member for Kennedy now enjoys, with the people in his electorate, farmers and others, grew out of some of the original foreign investment in this country, and there have been many waves of foreign investment since. However, competition for foreign investment has intensified. Australia is competing with many other investment-hungry countries. Countries in our region are increasingly successful at attracting investment. Australia has been very successful at attracting investment in our mining and resources sector. With investment in this area easing, we have got to intensify and focus our attention on making Australia a more attractive destination. We have been blessed with the investment over the last 15 to 20 years and the thousands of jobs created in every part of Australia, because the investments in the north-west, the north-east and the north in mining, resources and energy projects have flowed through to so many parts of urban Australia. So many of our small and medium sized service suppliers have had a part of all that action, and we have enjoyed the hundreds of billions of dollars of tax that have flowed. Almost all of it has come because of foreign investment. It is where the jobs have been created. No-one can deny that. No-one can deny the fact that jobs, by the tens of thousands, have come from the foreign investment that we have been blessed with over the last 15 to 20 years. Now that the construction phase is finished, sure, prices have come off somewhat, but we have got decades and decades of supply contracts that will underpin so much of the prosperity in our country, all flowing largely from so much of that foreign investment, combined with the ingenuity, the skills and the ability of Australians to make these things happen.

Over the decades there has been some tinkering in the foreign investment rules, but no significant revisions have been made to our foreign investment policy framework since the 1970s. It is high time to update the framework. The government is streamlining the processes, doing away with red tape and updating requirements and systems. This will save business time and money and, in doing so, will continue to safeguard our national interest. The broader national interest is at the heart of the government's actions. The bills introduced by the Treasurer strike a good balance. The reforms will streamline our foreign investment regime into a robust framework that provides clarity to investors, to business and to the community. There are so many options for foreign investors. We need to have this clarity, we need to have the certainty and we need to have the consistency that allows them to invest here with confidence and not be confused or find themselves overburdened with many layers of different requirements, in terms of approval and otherwise, with their foreign investment.

The reforms will remove routine investment cases from the system and allow a greater focus on those investments that require closer attention. The reforms improve the alignment with takeover rules in the Corporations Act, raising the substantial interest threshold from 15 to 20 per cent. This means that foreign investors will not have to apply for approval from FIRB until their interest reaches 20 per cent. That will be the same threshold that applies in the Corporations Act where takeovers are considered. It is common sense, but it has not applied for so many years. Providing FIRB with the ability to extend the time to consider more complex deals that have not yet been publicly announced, without requiring them to be prematurely announced via public gazette, is a long-overdue and sensible change that will be welcomed by the business community. The reforms will also remove investments in financial sector companies from the framework, as approvals for such transactions are already required by the Financial Sector (Shareholdings) Act. Removing doubling-up makes sense, it is cheaper and it will be attractive to foreign investors. Such changes simplify and streamline our system, making it more business friendly.

We have heard the community's concerns around agricultural investments, in particular, and with these reforms we fulfil our election commitment of delivering increased scrutiny and transparency. We have reduced the screening threshold for agricultural land, and we are establishing a comprehensive land register to increase transparency on the levels of foreign ownership. This will provide, for the first time, clear data on what is in reality a low level of foreign ownership across our farms—a piece of myth busting that actually helps us to make the case for foreign investment in the agriculture sector by providing the facts to the Australian community.

Under the new legislation we will strengthen enforcement and compliance with the foreign investment rules, particularly for residential real estate. Residential real estate is a special class of asset. Foreign investment in existing stock does nothing to create jobs. Australia's foreign investment regime for residential real estate aims to channel foreign investment into new housing stock, and the changes will ensure that this aim is fulfilled. From now on the Australian Taxation Office will handle compliance and enforcement issues for residential real estate. We will appropriately resource the ATO to cross-match and detect breaches, and we are giving them teeth so that Australian stand-alone housing stock is preserved for those people who live here. The monitoring of foreign investment in residential real estate—and there were over 20,000 applications of this nature last year—is an exercise in sifting through large volumes of data from land title offices and visa records, something much better suited to the ATO. This will free up FIRB to focus on more complex issues involved in a handful of business applications, speeding up response times for applicants. As part of that focus on reduced response times, we will introduce a modest fee structure to provide for enhanced service delivery.

Investors accept that they should make a contribution to the cost of processing their applications and these fees will be returned to them in greater efficiencies and streamlined processes. Let us keep these fees in perspective. The application fee will be very modest compared with the typical legal and advisory fees that businesses incur progressing investment transactions and are highly unlikely to be a deterrent for investors. In fact, removing many of the layers of doubling up and unnecessary paperwork will reduce those typical legal and advisory fees and ensure that we do fast-track many of the approvals.

We need a strong framework around foreign investment, one that welcomes foreign investment so that our economy can thrive while protecting our national interest. The government is very strongly committed to opening Australia for business and encouraging foreign investment within a framework—and this is important—that protects our national interest.

The legislation introduced will help ensure Australia remains an international investment destination. The reforms will modernise our system so that we can continue to prosper from the technology and innovation that foreign investment offers. In a world where there is still an enormous uncertainty, economically and politically, you find that the world is awash with cheap money because of the huge budget deficits that many countries have run but it is also awash with very nervous investors and they are looking for safe havens. These investors are looking to put their money into long-term investments where they are going to see even a modest return and at least their money will be safe. Australia, in that sense, is highly attractive to so many around the world. We have to make ourselves even more attractive.

This bill helps to streamline a lot of the application requirements and other provisions, and it will make us not only safe haven from legal and other points of view but it also will mean that we are attractive and competitive in chasing investments from other parts of the world. The government is committed to continuing our work with business and industry—large and small—to improve the investment environment, to increase the ease of doing business in Australia and to promote Australia as the investment destination for businesses seeking a base from which to capitalise on the spectacular opportunities emerging around our region as a result of the explosion of the Asian middle-class.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I want to be very specific when I talk about the grand generalities of 'we are going to get foreign investment' and 'we are going to set the place alight' and 'we are going to attract investment from overseas'. Well be specific, back up your rhetoric with some specific examples. I constantly interjected on the minister asking him to give me some examples of all this wonderful foreign investment and what it has done for Australia because I am dammed if I can see it.

There was a study done in 2006. It said that only 11 per cent of the surface area of Australia was owned by foreign investment, only 11 per cent. The last speaker, the minister, seemed to think it was a good thing that Vestey owned all of our country. Lord Vestey did own two per cent of Australia. Apart from supplying cattle to some of my people in Cloncurry—he did not do that voluntarily, by the way—I cannot think of any reason in the world why anyone would thank or praise Lord Vestey. In fact the government of Queensland built three public abattoirs to break the stranglehold of Lord Vestey on the beef industry of Australia, which figures prominently in Phillip Knightley's book, The Vestey Affair. I would strongly recommend that the minister, instead of coming in here and making statements which only indicate his towering ignorance, reads Phillip Knightley's book and how Vestey paid the Argentinian beef growers nothing and paid the Australian beef growers nothing until we broke his hold by building public abattoirs in the state of Queensland.

Eleven per cent does not sound like a great amount of land. But then I discovered that 53 per cent of the surface area of Australia is on the world register of deserts. I would not have thought Australia was 53 per cent desert but anyway that is the figure. It is from National GeographicI can give you the reference. Twenty-three per cent of Australia is supposedly owned by the First Australians. Identifying myself on occasions as a First Australian and speaking on our behalf, we do not own anything because we cannot get a title deed. Twenty-three per cent of Australia is sterilised because we cannot get a title deed so we cannot borrow money, so we cannot buy cattle, so nothing can be done with it so it just sits there lying idle. I might add that almost all of the 23 per cent is the top third of Australia, which, if it were a separate country, would be one of the wettest countries on earth. There is no lack of water in the electorate I represent, I can assure you. A further seven per cent is national parks. So seven per cent is national parks, 23 per cent is sterilised because of the unwillingness of government to give title deeds out, so that is 30 per cent, and 53 per cent is desert so that is 83 per cent.

But of the 17 per cent that is left, 11 per cent is owned by foreigners. Let me just repeat that very slowly: 53 per cent is desert, 23 per cent is owned in a way that you cannot get title deeds—so you cannot use it—and seven per cent is sterilised, not by lack of title deeds but as national parks. Thirty per cent and 53 per cent is 83 per cent, which leaves you with 17 per cent. And of that 17 per cent, 11 per cent is foreign owned. That was in 2006. I am pleased to see the member for the Murray River areas sitting over there because she is well aware of how much of her country and homeland has been bought by foreigners.

At Mount Isa Radio, I was told that Bobby Holder wanted to see me. I said, 'What does Bobby Holder want to see me for?' They said, 'Does it matter?' The implication was that Bobby Holder is a legend in his lifetime. He is 83 years of age and he is still competitive and winning roping contests. Instead of being the header, which is the easy part of roping; he is the heeler, which is the difficult part. You come out at a hundred mile an hour on a horse doing a flat gallop, and you swing a rope and try to pick up the back foot of the animal. Most of the time, Bobby Holder does it. This man is a legend.

Bobby Holder is also famous for something entirely different. He has sold more agricultural property than anyone else in Australian history. He knows more about the selling of agricultural land in this country than anyone else in this country. He said to me: 'What's going on in rural Australia? What's happening?' I said: 'They're all going broke, Bobby. That's not any news to anybody.' He said, 'So when they go broke, what happens?' I said, 'What do you mean?' He said, 'Who do they sell it to?' I said: 'You know Australians cannot make any money out of agriculture, so it is all getting sold to foreigners. They haven't woken up yet that we can't make money out of agriculture in Australia.' He said, 'What's your mob down there in parliament going to do about it?' I said: 'Nothing, they're not Australians; they're globalists. They don't believe in the Australian interest. They believe that big corporations should be allowed to trade freely and that that will save Australia. I can't see any logic in that, but maybe there is some logic and, as a dumb country boy, I can't figure it out.' I said: 'Bobby, what do you reckon should happen? Let's just say there was someone down there who cared about their country. What should I tell them?' He said: 'Get the government to buy them. Buy the land and lease it back to them.'

Grant Fawcett, a man whose intellectual capacity I have great respect for, of DJ Partners and CEO of Southern Gulf Catchments, has a proposal that we set up a corporation funded with government guarantees out of superannuation moneys to buy the farm and lease it back to these poor people who have been there for five and six generations. Some of them are not even settlers—and there have been some terrible instances of them doing away with themselves; I do not use the s-word anymore—they predate the settlers. They descended from an explorer family. They were explorers not settlers.

If we want to solve the problem of foreign ownership then the first thing we have to do is make agriculture in this country profitable. To do that, we have to get in step with the rest of the world. We keep getting preached to in this place about free markets and level-playing fields. I do not where the hell the level-playing field is! The Australian dollar has been propped up by interest rates a thousand per cent higher than the rest of the world.

As I said to Glenn Stevens, and I appreciated Glenn's time: 'I was the minister responsible for the State Bank in Queensland and if we were 50 per cent out of step with the banks in some division, I would want the CEO in to explain to me why we were 50 per cent out. If we were a hundred out, I would sack him. He wouldn't be given a chance to explain any damn thing; he'd be thrown straight out a window! If it was a thousand per cent, I would personally jump out the window.'

Our interest rates are a thousand per cent higher than the rest of the world. The rest of the world has been on an average of around 0.23 per cent, whereas for the last couple of years Australia has been on an average of 2.6 per cent—a thousand per cent difference, a thousand per cent out of step with our trading partners. Bring interest rates down to where they should and the dollar will go to where it should be, which was 49c when it was allowed to free-fall under Keating—and then for reasons best known to him, he propped it up. Mr Costello came in and did the right thing, initially, and allowed it to free-fall and it went to 51c. Surely, it should be clear to everybody that in a buoyant economy, the Australia dollar was only worth 49c and 51c. Well, we sure ain't got a buoyant economy today.

Our two export-earning items, iron ore and coal, as everyone is well aware, are both on the ropes. Our manufacturing industries are vanishing; 72 per cent vanishes with the car industry. So we have mining in deep trouble, we have no manufacturing, we have to buy all our petrol from overseas and we are buying nearly 40 per cent of our food from overseas. It will be rather interesting to see how we can continue to do this—all our whitegoods from overseas, all our petrol from overseas, all our motor cars from overseas. Nearly half of our cement and the iron and steel are used in houses—corrugated iron roofing et cetera—come from overseas.

The Australia dollar is the No. 1 problem that we have to fix up. It is very simple: just bring the interest rates in line with the rest of the world. Do what they are doing. We can assume that we are the only clever people on the planet and that Europe, the United States, Japan and Brazil are all dumb; that we are 'Mr Cleverness' of the planet.

There is the little matter of subsidies and tariffs. Heaven only knows how many times we get preached to in this place about subsidies and tariffs. It was a pity that the likes of the minister did not go and preach it to the other countries, because the last OECD report that was done—it think it was 2007 or 2008—talked about the average support levels, which are basically subsidies and tariffs, and that 40.1 per cent of a farmer's income throughout the world comes from the government via subsidies, tariffs, grants et cetera. In Australia, it is 5.6 per cent. If we are betting that our farmers are 34 per cent better than our competitor nations then we will win. If they are not, then agriculture in this country must fail.

Finally, unlike any other country on earth, the Americans are squealing blue murder because Costco and Walmart have 23 per cent of the food market. Woolworths and Coles have around 90 per cent of the food market. There are only two companies you can sell food to in Australia and only two companies you can buy it from.

If you fix up those three problems, you will not have to worry about foreign ownership of your country. For those who are not worried about more than half of Australia's arable land being in foreign hands, think about this: are you really an Australian?

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I am.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Are you? The gentleman over here says he is pretty sure he is an Australian. But why wouldn't you bring your dollar into line with the rest of the world and look after your own country? Why wouldn't you do that? Why wouldn't you do something about Woolworths and Coles when you know they are murdering agriculture in this country? Why wouldn't you do that if you are an Australian? Why wouldn't you bring our subsidies and tariffs into line with every other country on earth if you are an Australian? It is because you are not; you are a globalist.

The minister spoke about foreign investment. I happen to be an expert in that field—because I was the mines minister in Queensland. I was in a government that was the most mining oriented and development-achieving government in Australian history. We did not build the mining industry with foreign investment. It was built with our money. We borrowed the money. We borrowed the money to build the biggest and most efficient power station in the world. That gave our fellow Australians the aluminium industry, because aluminium is about 40 per cent bauxite and about 60 per cent electricity. We produced the cheapest electricity in the world. We were not into this free market and be fair to everybody business. We were out there for our people to win. That is what we were about.

We were not too worried about taking two per cent of the coal from the mining companies. It was called a reserve resource policy which every country on earth—except us—has. We took two per cent of their coal for free. We had this giant power station and we could produce the cheapest electricity in the world. Australia now—have a look at the register—has the second highest electricity costs in the world after West Germany. We have gone from being the cheapest in the world, in Queensland, to being the second most costly.

Let me go back to foreign investment. It was not done with foreign investment; it was done with the money of the Queensland government. They built the port of Gladstone. They built the railway line into the coalfields to open up the coal industry in Australia. There was no foreign investment involved. The miner we were looking after was Thiess, an Australian mining company. (Time expired)

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I take great pleasure in speaking on the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, which is being considered together with the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015. On the issue of the importance of foreign investment for Australia, our Treasurer, Joe Hockey, said:

The Government is committed to strengthening Australia’s economy.

The Government welcomes foreign investment—

I add that, since 1788, Australian has been dependent on foreign investment to help build our infrastructure and to grow our economy, whether it is in agribusiness or manufacturing.

Mr Hockey continued:

It provides additional capital for economic growth, creates employment opportunities, improves consumer choice and promotes healthy competition. It can also help deliver improved competitiveness and productivity by introducing new technology; providing much needed infrastructure; allowing access to global supply chains and markets; and enhancing Australia’s skills base. Without foreign investment, production, employment and income would all be lower.

The total stock of foreign investment in Australia at the end of 2014 was almost $2.8 trillion, up from about $1.2 trillion a decade ago. Around $690 billion of this is foreign direct investment.

Foreign investment has always been essential for our economic development. We are also part of the global economy and increasingly it is a case of joint venturing and working with other corporations, or even smaller businesses—often standing hand-in-hand in the other partner's markets with some insider status—to grow our exports.

These three bills strengthen Australia's foreign investment framework, ensuring that ongoing foreign investment is in line with our national interest. We have always believed that to be the case, but we need to always do a check. We need to ensure that all of our foreign investment is in our national interest—and, where it is not, that our compliance regimes and our sanctions are appropriate.

Our national interest includes considerations of our national security, of fair competition, of other government policies—including tax regimes—of the impact on the economy and the community, and of the investor's character. We do not want to be the investment destination of choice for shonks. The bills will streamline the system for foreign investors. It is important, given that there is great competition globally for the investment dollar, for us to present a streamlined, reduced-red-tape regime where the investor's interests are quickly ascertained and where they can move quickly into an investment—if that is appropriate for our nation. We also want to make it easier to identify opportunities for investment for those who are interested, but it is in our nation's interest to document trends carefully—what is being bought and by whom—so we can keep track at all times of what is going on in our nation.

The Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 makes substantial changes to the Foreign Acquisitions and Takeovers Act 1975. It modernises the rules and it strengthens enforcement within the foreign investment system. In particular, the bill introduces civil penalties, as well as increasing criminal penalties, for any who break the rules. It also improves the compliance enforcement regime for foreign investment—the rules relating to residential real estate—by transferring such regulation to the Australian Taxation Office. The bill also enables closer scrutiny of investment in Australian agriculture by lowering the screening threshold—in other words, at a lower level of investment we will now be able to document and track what investments are taking place and to consider those in terms of our national interest.

The Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 establishes fees on all foreign investment applications. Obviously we do not want the taxpayer to be funding an investor's costs of participating in our economy. These measures will improve the transparency of foreign investment in Australia and, as I said, will reduce the cost burden on the Australian taxpayer.

The third bill, the Register of Foreign Ownership of Agricultural Land Bill 2015, the register bill, complements the changes by establishing a register, operated by the ATO, of foreign ownership of agricultural land. This is particularly of importance and of great interest to me as a rural member, the member for Murray. We have numbers of properties, particularly dairy farms, that have been bought by New Zealanders and by Chinese interests. While we welcome those new interests in the electorate of Murray—in particular, the New Zealanders who bought dairy farms and injected a lot of new technology and intellectual innovation—at the same time it was important and it is important that we know how many properties are being purchased, where they are and when they might be sold on, and if it is to another foreign investor.

This register will require the registration of existing foreign ownership holdings, as well as recording all future acquisitions and disposals of agricultural land in Australia. I think this is important so that we do not have people like the previous member, who was most anxious about who owns land—he had all sorts of theories about who did—and the quantities of property bought. With this register, there will not be speculation. We can simply check with the register and have the information at hand, accurate and contemporary.

The changes build on the current regime, where foreign investment proposals are considered by the Treasurer through the Foreign Investment Review Board, or FIRB. If the proposal is not contrary to the national interest, it will be approved. This already happens in most cases. In 2013-14 there were 24,102 foreign investment proposals approved compared to half that number, 12,731, in 2012-13. Again, it is important that we know those statistics, that we know of the doubling of foreign investment proposals and what sorts of proposals were made and approved. It is in the national interest that we track this.

If the foreign investment is considered a significant action—that is, it is an action that would be above any threshold tests and would lead to acquiring an interest in securities, assets or land resulting in a change of control, the Treasurer can then take one of three actions: he or she can decide not to object—and this happens in most cases already; he or she can allow the foreign investment action to proceed provided that the foreign investor complies with certain named conditions; or he or she can decide that taking this significant action would be contrary to the national interest and can make an order prohibiting the proposed significant action. Again, I applaud the fact that the government of the day—in this case, in particular the Treasurer—retains control of investments, particularly when considering whether or not the investment is in the nation's interests.

When considering a non-residential proposal, the Treasurer takes into account the impact of the proposed investment on Australia's national security, the economy, the community and competition. The character of the investor is also an important matter. In particular, while assessing an application for an interest in residential land, the Treasurer's overarching consideration is whether the proposed acquisition would in fact add to Australia's housing stock, which would be a good outcome for the nation. Australia has always been pressed to find sufficient housing. We have rules about stand-alone housing stock, and we are concerned to keep a close eye on the whole housing market.

There is great interest in the community about this, particularly in relation to whether or not foreign investment in residential real estate impacts significantly on the price of real estate. The government is taking action to restore confidence in Australia's foreign investment framework. In the case of residential real estate, the current foreign investment system aims to channel foreign investment into new homes, in particular, for Australians to purchase or rent. The government's changes will ensure that this aim is fulfilled and that the current rules that limit foreign investment in established dwellings are properly enforced. There is enhanced compliance and enforcement in relation to that. The government has provided $47.5 million over four years to the ATO to improve compliance and to strengthen the enforcement of the rules. The ATO has the capacity to cover more than 600 million transactions annually through its data-matching programs. The ATO matches its own taxpayer data with a variety of third-party sources, including the Foreign Investment Review Board, Immigration, AUSTRAC, banking data and state and territory land titles data. I think these are all very important initiatives.

From 1 March 2015, the coalition acted to lower the screening threshold for agricultural land from $252 million to some $15 million—that is a cumulative $15 million. I applaud very much this lowering of the threshold in examining agricultural land purchases. Of course there are exemptions applying to non-government investors from the United States, New Zealand and Chile, where the threshold will be $1,094 million.

In The Australian newspaper on 20 September last year, the rural reporter Sue Neales wrote an article about the dairy investment conference organised by Austrade and Dairy Australia, commenting on investment in Australia's dairy industry. She said:

AUSTRALIA'S $4 billion dairy industry is the new flavour of the month among foreign investors, with global pension funds, food companies and wealthy individuals turning their focus from New Zealand's fertile dairy plains towards Victoria and Tasmania … The changed focus was evident at the packed … conference … with Chinese companies, major investment banks and fund managers focused on agribusiness.

There are many investors interested in investment in Australian agriculture:

Pension funds and private equity companies from the EU, Scandinavia and the US—

and Chinese investors—

are also moving to buy directly or invest indirectly in farmland in Australia, believing it to be greatly undervalued compared to similar dairy farms in New Zealand.

The article says:

… China's Ningbo Dairy Group … vice-president Harry Wang said … "Our goal is to export our milk back to China and help the industry here too … There is huge potential in Australia but you have problems with too many dairy farmers being too old, young people not wanting to work on your farms and your farms being too small; I think that is why your quality is good but your production levels are slipping."

…   …   …

There is also resentment towards NZ's changed laws relating to foreign investment, which now require any purchase of a farm greater than five hectares by a foreigner or foreign entity to get the approval of the government's Overseas Investment Office.

So you can see there is enormous interest in Australian agribusiness. It is moving well beyond the traditional European interests, and in my electorate of Murray we have seen that investment. It has not always worked out well for the investors, particularly when they were caught by the drought or the very high dollar when it came to their exports, but as a whole this adds very much to the information and to the diversity of our production systems.

These bills also introduce a $55 million threshold based on the value of the investment for investments in agribusiness. The threshold will also capture certain downstream activities with links to primary production. Agribusiness is defined to include some downstream manufacturing in meat, poultry, seafood, dairy, fruit and vegetable processing, sugar, grain, oil and fat manufacturing. There are exemptions from this threshold for non-government investors from the United States, New Zealand and Chile, for whom a threshold of $1,094 million applies, and from Singapore and Thailand, where the threshold is $50 million.

This is a new dimension. It has caused some worry for some in food manufacturing in my electorate, who worry that red tape is then going to reduce prospects for their investors and perhaps cool their interest. We have to assure those manufacturers that, with the capturing of agribusiness in these bills, it will not be more complicated and we will not frighten away investment. In fact, under this new regime it will be more transparent and streamlined for them and, if they are looking for investment in their manufacturing, it will be more possible for them to attract international investment. There has been a lot of industry consultation throughout the policy development process and the drafting of this legislation, including releasing exposure drafts of the relevant bills.

In conclusion, it is most important that we do not stifle foreign investment in this country. It is a highly competitive market. Different countries compete to have foreign investment. We at the same time, of course, want to have a very good system of registering who is buying where and ensuring that it is always in the national interest. I commend these bills to the House, and I say there has been very good work done by numbers who have worked hard to make them come to fruition.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

Before I make my contribution in respect of the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015, I want to take the opportunity to reflect on someone who I regard as my political hero. The Modest Member, Bert Kelly, was someone who argued for a globalist view in this place and, indeed, in the other place, at a time when it was an unpopular view. Indeed, the former member for Barker, the Hon. Ian McLachlan, suggested that Bert Kelly, for his services to the nation, ought to have been given a brace of knighthoods. That is why, when the member for Kennedy perhaps calls me a globalist, I like to think I can wear that tag with some honour, and I would like to take the opportunity to reflect on Bert's courage as the Modest Member. But what is lucky for me is that one can concurrently be an Australian citizen and a globalist. That was the point that Bert Kelly made in his arguments and one that ultimately won the day. I would much rather be a globalist than a protectionist. Someone might need to tell the member for Kennedy that that argument has been run and lost.

Speaking of the member for Kennedy, can I take up his challenge. I think his challenge was to identify foreign investment in this country that has been good for the national interest. What I will do is identify a couple of current investments in my electorate and then one that I am seeking to assist with which will be of immeasurable benefit to the farmers in my electorate.

The first is an investment in a mill in the small town of Tarpeena, near Nangwarry. New Forests have purchased that mill. It was part of the acquisitions as a result of the Gunns liquidation. That liquidation put in jeopardy many hundreds of jobs in my community, and if it were not for that injection of foreign capital those jobs, I am almost certain, would have been lost. So to the member for Kennedy I say: there is a rock-solid example in the forestry industry of where foreign investment in Australian agribusiness was of benefit. Another example was the now not so recent acquisition of Telopea Downs, a sprawling station not far from the South Australian border and communities such as Bordertown in my electorate. This was purchased by foreign interests, the Hassad Australia group, who not only purchased the property but then set about reclaying the property. That is a process that is incredibly intensive. They engaged local contractors, and as a result of that work the land is now much more productive and fertile and will be forevermore. So those are two clear examples which I think go some way to answering, from my electorate's perspective, the member for Kennedy's concerns.

But can I talk about a prospective investment. Very many of my electors are beef and sheep producers. Indeed, my own parents turn out a modest number of head. What we need to see—and I am sure others in the chamber will agree—is downstream processing. In agriculture, in pursuit of the national interest, we need to capture more and more of the value chain, so more and more processing facilities would be a good thing, because of course added competition drives up competition for prices at markets.

So this very week I hosted the Mayor of the City of Mount Gambier, who is a particularly active mayor and who himself had brought owners of a Chinese abattoir to Australia. Their interest in the initial stage is to get access, via the free trade agreement, to live cattle, but their long-term plan is to invest significantly in my electorate, or close to it, to establish a processing facility. I hear the member for Kennedy all the time talking about the integration of processing facilities in the protein space. This would be a novel investment in greenfield agriculture, and I can tell you that people in my electorate, particularly the farmers turning out quality stock, are screaming for those kinds of investments.

Having said all of that, can I speak to the trilogy of bills. As a candidate, there are some policy positions that you get somewhat excited about, and in the lead-up to the September 2013 election I was very keen to keep reminding the electorate that we had plans in relation to establishing a register of foreign investment. So here we are tonight, and I have my opportunity to speak on the bill that has arrived in this place. Increased transparency on all levels of foreign investment in agricultural land is an important thing. I am pleased to confirm and lend my support to this position.

The Agricultural Land Register will provide information from investors directly to the ATO. It was established on 1 July 2015. The government, as I understand it, is currently in negotiations with the states and territories to establish the register in relation to land currently held. I must say it is a bit of a disappointment of mine that that cooperation has not been forthcoming to this point, but I am sure it will be.

We are also, through the trilogy of bills, beefing up enforcement. The issue here is that there is no point having a regime underpinned by the Foreign Investment Review Board if we do not have strong criminal penalties and divestment orders to ensure that people are effectively doing the right thing.

The most important elements, in my respectful submission, of the trilogy of bills are the thresholds. As I travel around my electorate, people are concerned about foreign investment in agricultural land. They were very concerned that the level at which acquisitions would be referred to the Foreign Investment Review Board was set at $252 million. I know agricultural land is becoming more and more expensive—and for those that own it and have their superannuation tied up in it, can I say that I am pleased for them—but, even at the current rates, $252 million is an incredibly high threshold. I am much more comfortable with the new threshold set at $15 million. I am even more impressed that, in setting this threshold, we have indicated that it will be a cumulative figure. That is, if I am a foreign investor and I currently own $8 million of agricultural land and I seek to acquire another property of, let us say, an additional $8 million, it will trigger a reference to the Foreign Investment Review Board. And so it should, because but for that cumulative test we would be in a situation where people would just split up deals to the point where each deal would sit below the threshold figure, and we would be in a situation where this legislation would not operate in the way that is intended.

Of course, referral to the Foreign Investment Review Board is not a process that is cheap; nor is it a process that, by definition, means that someone who makes an application is not going to be accepted. But—back to the question of the costs of referral to the Foreign Investment Review Board—it was important to ensure that referral to that process and the costs of meeting that process were met by the applicant, and that, as well, is picked up in this trilogy of bills. We could not have a situation where the costs associated with assessing foreign land acquisition was being cross-subsidised. It very much needed to be a situation where we were ensuring a fee-for-service arrangement. So that deals with foreign investment in land.

As you heard from the member for Murray, in terms of the acquisition of agribusinesses, the rate is set at $55 million. From that, I think we can see that, as a nation—as I mentioned earlier—we are very much focused on inward investment into agribusinesses and, ideally, the establishment of fresh agribusinesses in downstream processing to allow Australian farmers and the nation to capture more of the value chain.

I often say that, in a truly globalised world economy, the one thing that will hold back Australian agriculture is insufficient capital infrastructure and insufficient capital investment in downstream processing. In this regard, the options are twofold, by definition. That investment can come in the form of domestic, or Australian, investment, or it can come in the form of foreign investment. Given the size of the Australian economy and the size of the Australian savings pool, it is not too difficult to realise that the majority of that investment will be enticed, as it has been over the history of Australia, from overseas. We ought to be doing everything we can, particularly in this greenfield agri-investment space, to entice it. As I say, it directly connects to the ability of farmers to achieve higher farm gate prices, and, as a representative of a rural and regional electorate, I need to be focused on ensuring my constituents get more and more for their product at the farm gate.

These are bills that I am excited about. They are reforms which are important. They are reforms that have been called for from across the agricultural spectrum, and they will assist this nation in pursuing its national interest. The coalition understands the opportunities that a truly globalised economy provides for Australia. Bert Kelly understood it, Ian McLachlan understood it and I understand it. That is why it disappoints me—

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

You're no Bert Kelly, mate!

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

True' I am not. If you were here earlier, Member for Wakefield, you would know that I indicated that he is in fact my hero. I would love to be half the man he was. He was someone who had the courage to come into this place and argue against protectionism when, quite frankly, it was not the popular cause du jour that perhaps globalisation is today.

Member for Wakefield, I wonder what Bert Kelly would think about Labor's current approach to the free trade agreement with China, ChAFTA. He would be sidling up to Bob Hawke and Bob Carr and doing everything he could—whether it was by anonymous letters to the paper, signed off 'modest member', or any other way—to dissuade you from your course. He knew a very long time ago—and you should have learned the lesson by now—that the economic future and security of this country was tied directly to trading with the rest of the world.

I have the privilege of sharing a border with the member for Wakefield. When the member for Wakefield goes to the Barossa, I would like him to speak to some of the producers in the Barossa and say to them that he does not want them selling wine to China, that he does not want to encourage the sale of wine from the Barossa into China, and that he thinks that is a bad thing. I know he does not think that is a bad thing. He is far too sensible for that—and I cannot believe that I have made that concession—but, unfortunately, we have too many people in this place on the other side who come here effectively tied umbilically to the union movement. Today there was a letter in the Border Watch, of all things, in the Mt Gambier paper from Brad Coates, lead organiser for the CFMEU, saying that trade with China is a bad thing. Please; our future is tied up with Asia! Our future is about exporting to Asia. The prosperity of farmers throughout Barker is tied to that. The member for Wakefield knows this. I know it, Bert Kelly knew it and Ian McLachlan knew it. I hope when the member for Wakefield next visits a winery in the Barossa he confirms for them that he knows it.

Karen Andrews (McPherson, Liberal Party, Parliamentary Secretary to the Minister for Industry and Science) Share this | Link to this | Hansard source

I rise to speak on the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and the Register of Foreign Ownership of Agricultural Land Bill 2015. I am very pleased to speak in support of this package of legislation. Upon our election just over two years ago the government declared that Australia was 'open for business'. Since then, we have set about ensuring that we are indeed a nation that encourages innovation, investment and growth.

Foreign investment has been an important source of economic growth over many years. It helps create jobs, boosts our competitiveness in global markets and provides infrastructure and greater consumer choice. That is why it is crucial that our foreign investment regulatory system is simple, transparent and in the national interest. It should also be enforceable to ensure compliance. This package of measures delivers certainty and clarity to the foreign investment framework—and that is really what investors are after. Each nation is entitled to set and enforce foreign investment rules. What makes this package a plus for foreign investors is that it will ensure we have a predictable and robust system that welcomes investors and clearly sets out their obligations. I think most Australians would be surprised to know that our foreign investment rules have not been significantly revised since they were first introduced in 1975. The world has certainly changed a great deal in the past 40 years, particularly in the way we access and retain information.

The coalition promised before the 2013 election that we would lower the screening thresholds for foreign investment in agricultural land and agribusiness and create a register of foreign ownership of agricultural land. We deliver on that promise with this package of bills. As announced in February this year, from 1 March 2015, foreign investors must obtain prior approval for a proposed acquisition of an interest in rural land where the cumulative value of the rural land owned by the foreign investor, including the proposed purchase, is $15 million or more. This is a significant reduction from the previous threshold, which was $252 million.

The government is also establishing a foreign ownership register that will start collecting information on existing foreign ownership and subsequent transactions of all interests in agricultural land from 1 July 2015. The government will work with the states and territories so that the register will ultimately use land title transfer information from existing state and territory land title collection processes. This will remove duplicative registration processes for property owners.

This package also introduces a new $55 million screening threshold for foreign investment in Australian agribusinesses. These thresholds will provide greater scrutiny and transparency of foreign investment in our agricultural industry, which we know is more reflective of community expectations. I want to stress that this simply means that smaller acquisitions will face the same scrutiny and the same national interest test as larger acquisitions. It also means that we will have a clearer record of the cumulative nature of foreign investment in agriculture. We believe that such transparency is a positive thing and will help ensure community confidence in the system and, therefore, support for our foreign investment regime.

To that end, these bills were preceded by a very lengthy public consultation process. There were full public consultations in February and March through the release of an options paper titled 'Strengthening Australia's foreign investment framework'. There were 192 submissions received from individuals, peak bodies and other stakeholders. In May there was consultation on the Modernisation Options Paper and another 22 submissions. The exposure draft of the legislation was open to consultation in July and further submissions received.

We have been very careful to ensure that a range of views were canvassed and taken into consideration. There is of course a wide range of views when it comes to the issue of foreign investment. I note that many of the submissions by individuals argued against allowing foreign investment. In contrast, other stakeholders, including business groups and peak bodies, argued that the framework should be careful not to discourage foreign investment.

This package of measures gets the balance right. As I said at the outset, foreign investment is hugely beneficial to our economic growth and therefore contributes to the standard of living we all enjoy. I know that on the Gold Coast foreign investment has been an important part of our growth and helped create the infrastructure that underpins our tourism industry.

The Gold Coast economy is set to leverage its advantage internationally with the significant city projects and legacy prospects created by the Gold Coast 2018 Commonwealth Games. Gold Coast City's economy is well placed to cater for a shift in international trade partners from the manufacturing sector to an increase in service exports focusing on education, tourism and other knowledge based industries.

We know that stimulating direct foreign investment and business attractions on the coast will be dependent on the successful showcasing of our region's competitive advantages—of which there are many. Investment around key infrastructure areas such as the city's new central business district in Southport, the light rail corridor, and the health and knowledge precinct in my electorate are all key focuses in the City of Gold Coast's international plan and the city's economic development strategy.

I also note that the Gold Coast is leading the way when it comes to foreign investment in residential property, which of course is a boost to local jobs through our local construction industry and the many attendant manufacturing industries.

In 2013-2014, more than $238.3 million was spent by foreigner property investors across the Gold Coast in 377 separate transactions. This was far greater than other South-East Queensland local government areas—with the Sunshine Coast at $8.9 million, Noosa at $11.4 million and Logan at $9.4 million. And while the purchasers came from 28 different countries in regions all around the world, do you know where the largest group of investors came from? China. In fact, Chinese property investment on the Gold Coast was worth $148 million—more than half the total foreign property investment.

This is yet another reason why that Labor's continuing opposition to the China-Australia free trade agreement is nothing short of appalling. Clearly, there are some differences between federal Labor's view and state Labor. Labor leaders from New South Wales, Victoria and South Australia support the agreement. They recognise how much it will benefit Australia, as do businesses and other community leaders, including former Labor luminaries Bob Hawke, Bob Carr, Simon Crean and Martin Ferguson.

As Jennifer Westacott from the Business Council of Australia said:

ChAFTA will take investment into Australia to another level, making our economy stronger and creating more jobs for Australians long into the future.

Australia exports $108 billion worth of goods and services a year to China, which is more than double the $52 billion that we import. We stand to earn billions more as a result of this agreement with tariffs lifted on our exports. Federal Labor's opposition absolutely makes no sense, and I really urge those opposite to get on board and support the China free trade agreement.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Why don't you negotiate with us?

Karen Andrews (McPherson, Liberal Party, Parliamentary Secretary to the Minister for Industry and Science) Share this | Link to this | Hansard source

I am happy to talk to you. Returning to this legislation, it is important that, while we encourage and welcome foreign investment, we also ensure that everyone plays by the rules. I know that my constituents will welcome the stronger policing of our foreign investment rules by transferring the residential real estate functions to the ATO and implementing stronger penalties for those who breach the rules.

I note that this legislation encourages those who are in breach of the rules to come forward and self-report, and there is a reduced penalty period for those who come forward before 30 November this year. The Treasurer has already issued seven divestment orders under the reduced penalty scheme. These are the first divestment orders in 10 years.

It is vitally important, as I said earlier, to ensure that compliance measures are strict but fair and that our foreign investment rules are enforced. These bills introduce a range of stronger penalties to deter those who do the wrong thing. And we have provided the tax office with additional funding and resources to improve compliance and enforcement of the rules.

Australia is indeed open for business under the coalition. We are building a positive investment environment with our free trade agreements and we are creating a stronger foreign investment framework through this legislation. I commend this package of bills to the House.

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