Phillip Thompson (Herbert, Liberal National Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House the importance of foreign investment to Australia's economic recovery from the coronavirus pandemic and how the Morrison government's strengthened foreign investment rules will ensure our national interests are better protected?

Josh Frydenberg (Kooyong, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Herbert for his question and acknowledge his service for our country on the battlefield in Afghanistan and also his hard work for his local community.

Foreign investment is absolutely critical to Australia's economic prosperity and also to the recovery after the COVID crisis. One in 10 Australian jobs is connected to foreign investment, and every sector of the economy has benefited—manufacturing, mining, agriculture, tourism and, increasingly, financial services. There is about $3.8 trillion of foreign capital here in Australia. Our major investors include the United States—more than 20 per cent comes from the United States, more than 10 per cent comes from each of the United Kingdom and Japan, and a bit over five per cent comes from China.

We have always sought to get the balance right with foreign investment—on the one hand to be an attractive destination to welcome foreign investment, but on the other hand to ensure that our national interest is always protected. That's absolutely critical to maintaining community confidence in the integrity of our system. But our geopolitical and geostrategic environment is becoming increasingly complex. With technology evolving, we have sought to upgrade and strengthen our foreign investment framework, like a lot of countries around the world have done. Foreign investment is increasingly being used for strategic objectives, not purely commercial ones.

As the Prime Minister has said, foreign investment needs to be on our rules, on our terms and in our interests. That is why we are creating a new national-security test. If foreign investors, not just foreign-government investors but foreign investors more generally, invest in the sensitive national-security business—think defence supply chains, think utilities, think the energy sector and those businesses that are increasingly collecting sensitive national-security related data as well—they will face the scrutiny of the Foreign Investment Review Board. We're also increasing penalties, our enforcement regime and our compliance regime, and we're streamlining foreign investment where there is a foreign-government investor together with private investors with passive capital in a non-sensitive sector.

Foreign investment helps create jobs in this country. But, also, we must always ensure that we put it through the national-security lens and that, when foreign investment occurs in this country, it's on our rules, on our terms and in our national interest.