Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on the government's package of bills dealing with Australia's foreign investment framework. This is a package of three 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.

These bills modernise the legislative framework that underpins Australia's foreign investment regime. That is a framework laid out in the Foreign Acquisitions and Takeovers Act 1975. The Foreign Acquisitions and Takeovers Act regulates foreign investment and provides the basis for investments to be assessed to ensure they are not contrary to Australia's national interests.

The first of the bills before the Senate, the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, which I will describe as the amendment bill, makes extensive amendments to this act. Most of these amendments modernise the act to ensure it reflects contemporary practice and provides a clear framework for regulating foreign investment. The opposition supports these aspects of the amendment bill because they will provide greater certainty around the operation of Australia's foreign investment regulations and policies. However, the bill also implements government policies that Labor opposes, because they would impose layers of red tape on proposed investments in Australia's agricultural, agribusiness and food-manufacturing industries. Labor will seek to amend these aspects of the amendment bill to ensure Australia remains an attractive destination for the investment we need to build our economy. First, let me deal, briefly, with the other two bills in this package.

The Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 imposes fees on investors lodging applications with the Foreign Investment Review Board. The government's rationale for imposing substantial new application fees on investors is cost recovery. The opposition will support the fees imposition bill; however, we do wish to point out that the imposition of these fees does increase the costs of investing in Australia. Foreign investors and their Australian business partners already face substantial costs in complying with Australia's regulatory regimes, and government always needs to balance cost recovery against the impact that higher costs will have on Australia's attractiveness as a destination for foreign investment.

The third bill in this package, the Register of Foreign Ownership of Agricultural Land Bill 2015, establishes a register of foreign ownership of agricultural land to be operated by the Australian Taxation Office. Foreign persons will be required to register information about their existing landholdings and subsequent acquisitions and disposals of agricultural land. Labor supports the register of foreign ownership bill. We do so because it will provide for greater transparency around levels of foreign ownership of Australian agricultural land. I note that today Minister Colbeck, in question time—and I look forward to him correcting the record—misled the Senate about Labor's position. Perhaps ministers on that side ought be a little more careful about making sure that, when they say things in this parliament, they are in fact true. However, what we would say in respect of the register is that the government should ensure that it achieves the goal of transparency without imposing unnecessary costs or unintended consequences on investors, particularly on collective investment vehicles.

I want to turn now to have a discussion about the importance of investment. Investment plays a central role in any economy—investment in new plant, equipment and buildings, investment in new technology, investment in infrastructure like roads, ports or communications networks, and investment in starting up new businesses and expanding existing businesses. Investment is critical for an innovative, dynamic, growing economy which can provide good jobs and decent living standards. Investment has to be funded by savings, either by domestic savings or by savings sourced from other countries. Since European arrival, Australia has always relied on foreign as well as domestic savings to fund its investment needs and to build its economy. This has been overwhelmingly positive. It has only been by tapping into foreign sources of capital that we have been able to build the modern Australian economy of today. We will need to continue to attract foreign investment if we are to build the economy of tomorrow—an Australian economy that will provide the jobs, sustain the living standards and ensure the prosperity of future generations of Australians. There are strong links between cross-border investment and trade, and I have said previously that trade and investment are two sides of the same coin. Australia will have tremendous trade opportunities in coming years from our proximity to and our presence in the Asian region. To take advantage of these new export markets, Australia will need to scale up production at home—and, to scale up production, we will need investment, including foreign investment. That is why we need to be very careful about introducing policies which impose barriers against foreign investment.

This is especially the case in the agriculture and food-processing sectors because they are going to need large-scale investment in coming years. Agriculture and food are two sectors of our economy that stand to gain the most from the opportunities of international trade and international investment. The National Farmers' Federation has estimated that, for Australian agriculture to reach the capacity which will be needed to meet rising demand, it will require investment of between $1.2 trillion and $1.5 trillion over the next 35 years—that is $1.2 trillion to $1.5 trillion over the next 35 years. That is a very significant requirement and it will require a substantial contribution from foreign capital. It is inconceivable, regardless of the extent of our domestic savings—and I am from a party that introduced compulsory superannuation, which obviously added substantially to the Australian savings pool—that this level of investment can be funded entirely from domestic sources.

Unfortunately, the Abbott-Turnbull government has adopted a retrograde stance on investment in agriculture. The rot started early this term with the proposed acquisition of GrainCorp by ADM. The government took a highly political approach to this proposed $3.4 billion investment. Certainty about Australia's foreign investment policy and transparency in communicating reasons for decisions are important for investor confidence. The government's capricious handling of the proposed ADM investment damaged Australia's reputation as an investment destination. Since then, the Abbott-Turnbull government—