Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Hansard source

I do know what I am talking about. You may disagree, and you are free to disagree, and you may wish to support Senator Xenophon and Senator Milne, which you are entitled to do, but I think I am entitled to put the facts as I understand them on the table—and that is what I am proposing to do. I have indicated that the ABS reports that 99 per cent of agricultural businesses are currently entirely Australian owned, and only 0.6 per cent have greater than 50 per cent foreign ownership. More significantly, 88.6 per cent of agricultural land in Australia, by area, is entirely Australian owned. Also importantly, only 5.8 per cent of agricultural land in Australia was owned by businesses with more than 50 per cent foreign ownership.

So we are dealing with this piece of legislation that seeks to dramatically reduce the trigger point for foreign investment inquiries, but we have a set of statistics that I think make it very clear that the problem is not as great as Senator Xenophon is claiming. That is not to say we should not inquire into this issue. It is an issue that has been raised out there in the community and I am not saying we should not inquire into it. In fact there are inquiries into the issue and I think we should allow them to complete in due course before we take this bill any further.

As I said before, Senator Xenophon's original bill, which he introduced with Senator Milne, simply picked up holus-bolus the system that operated in New Zealand. There are many things that you might want to adopt from New Zealand, but I do not think their system of foreign investment is one of them. There are plenty of reasons to distinguish the Australian circumstances from those of New Zealand. One obvious one is the size. Simply because the New Zealanders chose to use the figure of $5 million as the trigger point, it does not automatically follow that Australia, which is much larger and has quite a different agricultural history to New Zealand, should adopt that same process. I have indicated that there was a Senate inquiry into this where they looked at all of these issues. I think what we can say about Senator Xenophon's bill is that it does jump to some conclusions. Until all of the inquiries that are currently going on are completed, I do not believe it is appropriate to proceed with this legislation.

Australia does rely very heavily on foreign investment. That has been the history and the pattern of economic development in this country. Senator Xenophon believes that we should reduce the threshold for consideration by the Foreign Investment Review Board but it is also possible that, if we were to go down this track and introduce this new cut-off point, it might have an impact on how other countries see the opportunity to invest in this country and might have an adverse impact on the way other countries view foreign investment. We do not want to do anything at this point in time that might discourage contemplation of foreign investment. We have seen what has happened around the world in the course of the global economic crisis. We have seen what has happened in the United States and what has happened in Europe with the levels of unemployment. When people are getting very jittery about the prospects of another recession around the world, this is not the time to be raising issues that potentially discourage foreign investment.

Any decision that we do take to change our foreign investment legislation should be based on evidence. That is the way to do it. I have already referred to what the Australian Bureau of Statistics has said are the circumstances with ownership at the moment. One of the things we are waiting for is a report that Senator Ludwig has requested. It is a report by both the Rural Industries Research and Development Corporation and ABARES, two very distinguished organisations. That report is due to be released by the end of the year. The purpose of that report is to deal with the role and the history of foreign ownership in the development of Australian agricultural land and the factors driving foreign investment in Australia. They are two very crucial and important issues to consider before you would even contemplate proceeding with legislation like this to dramatically change the trigger point for an inquiry into foreign investment. We have set up an inquiry. Senator Ludwig has chosen to do that. I think the most basic thing we ought to be doing is not proceeding with this legislation at this point in time but waiting for that report and seeing what it has to say.

There are a range of issues that I think we need to look at. I am sure that this inquiry that Senator Ludwig has set up will do that. Those issues include: are the current screening arrangements that are in place inappropriate? Are there advantages in retaining the inherent flexibility of the national interest test that is not overly prescriptive? How does this issue fit with the existing screening arrangements for other investments in Australia? The potential is that we end up with two systems of foreign investments, one in respect of the issues that are covered by this legislation—namely, agricultural land—and one in respect of all other investments in this country. If this legislation were to proceed and successfully pass the parliament with the support of Senator Heffernan, we would in fact have two sets of rules. There may be reasons why you would want to do that, but at this stage I think it would be indeed premature to suggest that we should proceed with this legislation without at least looking at what the impact of those two systems of financial regulation might be. Senator Milne was critical of the reference by my colleague Senator Bishop to the free trade agreements. We do have agreements in place. Those agreements have been struck with other countries based on our current foreign investment rules. We need to look at the impact that a change of the nature that Senator Xenophon and Senator Milne are proposing will have on any of the obligations that we have under our free trade agreements.

Senator Heffernan interjecting—

Senator Heffernan, the reality is that the economic performance of this country has defied most of the other OECD countries. There are lots of reasons why you might say that has happened. One of them that we have just recently found out is that we have the world's best treasurer.