Sean Edwards (SA, Liberal Party) Share this | Hansard source

I rise to speak on the same report from the Rural and Regional Affairs and Transport Committee, and join with my Senate colleagues, Senator Whish-Wilson, Senator Nash and Senator Heffernan, in taking note of this report.

I will not rehash too much any of the issues that my colleagues have covered but before I get underway I also acknowledge the dedicated, intelligent hard work of the secretariat led by Mr Stephen Palethorpe and the departing Dr Chris Curran, who are present in this chamber—and rightly so. There have been nearly two years of hard work culminating in this report. They deserve much credit for cutting through and trying to find a balance in this very important and quite emotive issue for Australia. Thank you, fellows, and your team at the Rural and Regional Affairs and Transport Committee.

I now move onto putting this into some perspective. I touched on this issue of emotion. Senators in this chamber and those listening to this contribution would know that last year there was a great deal of community sentiment expressed about the passing of one of the largest water and land holdings in this country, as a single entity—Cubbie Station—into foreign hands. It was quite a divisive debate and it remains a divisive debate. I hope to put that debate and the findings that we were able to come to into some perspective.

The United States, in 2011-12, was again the largest source of proposed investment in this country, at $36.6 billion

Other major source countries of proposed investment in that same year, 2011-12 were: the United Kingdom, at $20.3 billion; China, with $16.2 billion; Japan, with $13.9 billion; and Canada, with $8.9 billion. As you can see from those figures from last year, there is a lot of money spent by a lot of countries in this, our land of Australia. There were 49 foreign investment approvals in agriculture, forestry and the fishing sector, worth $3.6 billion in the same year, 2011-12. This represents just two per cent of the approved foreign investment in Australia—two per cent, in the agriculture, forestry and fishing sector. The largest source country of investment by value in the agricultural sector was Canada, at $1.4 billion, followed by the United Kingdom, at $0.6 billion, and the United States, at $0.5 billion—$500 million. Over the last five years the average level of foreign investment in the sector has been just over $2.5 billion.

There are 29 recommendations in this report, and I will touch on the one that I feel has a lot of relevance with regard to that emotive debate and trying to ensure that a rational debate can happen from here on out in this country about the way in which we source capital to fund our food security—and, keeping it in perspective—our resource community and so on. The committee made a recommendation that the government further strengthen Australians' tax regulations in order to protect against the erosion of Australia's tax revenue. In particular, the government should develop a more rigorous approach to prevent revenue leakage that may occur due to the business structures and practices used by foreign investors in relation to the transfer pricing of goods, the capital gains they pay, passive income, thin capitalisation and any other tax measures that may be deployed.

The issue is, of course, that you can have a company in this country and own farming property, and the principals can be Australian residents based in this country, but 100 per cent of the funding can be from an offshore base. That can be a sovereign wealth fund or a private fund from any of the countries which I mentioned earlier. They, effectively, are the owners. We need to look at those issues and tighten those loopholes to ensure that those who own the company are not necessarily those who can control it.

One of the other recommendations was that we commission an independent and wide-ranging review on Australia's regulatory network. We also thought that the national register for foreign ownership of agricultural land should be the primary mechanism for collecting and publishing information about foreign investment. That is very important, because we found out through the review process that there is a complete vacuum of information available to states and territories and the federal parliament to be able to make informed, realistic views on what is and is not good for this country. The register would include divestments as well, and the integrity of the register would be maintained so that public policy could be framed and gazetted to ensure that our food security was not under any threat.

The interpretation of 'agricultural land' came in for some scrutiny. What is agricultural land? What defines it? It is arguable from state to state and region to region what is and is not prime agricultural land. That needs to be identified. We also thought that it may be an idea to map the trends of foreign ownership of land in this country so that we can predict what policy instruments we need to employ to ensure that we do not get imbalances and that the government's and our expectations do not get out of step with those of the broader community. It should also aggregate the lands over five-year periods. My colleagues here earlier laid that out, so I will not go over that again. The other thing is that this information should be published. There is no better disinfectant than sunshine, and we think that information going regularly into the public domain will ensure that everybody can have a calm and reasoned view of who is investing, and why they are investing, in this country.

The big question was: is Australia able to feed itself into the future? Australia has a diverse and plentiful food supply, with enough food available from domestically produced and imported food to feed its population of nearly 23 million people. Even with a projected population of 30.9 million to 42.5 million people by 2056, food availability is not likely to become a problem for Australia. Australia produces enough food today to feed approximately 60 million people, so we do have a very high level of food security in this country.

In 2010, Australia was ranked the 16th biggest world food exporter by value and eighth in the world in terms of food trade surplus—the value of exports compared to the value of imports. During 2010-11, Australia imported $10.6 billion worth of food products—much less than the $27.1 billion of food exports. Asia receives between 55 and 60 per cent of Australia's agrifood exports, or about 40 per cent by value of our annual farm and fisheries food production. Australia has an abundant and diverse food supply. Over 90 per cent of fresh produce, including fresh fruit, vegetables, meat, milk and eggs, sold in Australia is domestically produced. Australians have the resources and wealth to import food to complement domestic supply and meet consumer preferences.

In closing, the wine industry in Australia has had a massive amount of foreign investment over the last 20 years. Without that foreign investment, the wine industry would be a vastly different business from it is today. I commend everybody for this report. (Time expired)