Rachel Siewert (WA, Australian Greens) Share this | Hansard source

I rise to make a contribution to the debate 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. The Greens have long advocated a tightening up of the rules around foreign investment in agricultural land and, in fact, water—and I will come back to that in a minute. For Australia to be able to make informed and strategic decisions about agricultural land and water resources we must accurately track and consider each bid by foreign investors, particularly sovereign nations, to own it. This is something we are now finally seeing the government take up and start to enact in legislation. We took that policy to the last election because we know that food security and the protection of our prime agricultural land and water resources, and the capacity to continue to produce food in this country, is absolutely essential and we need to make sure that we have strong laws in place that enable that protection.

People who have been in this place for a period of time would know it is not often that I quote the former Treasurer, Joe Hockey, in this place. But I am about to quote from part of his second reading speech when he introduced this legislation—and I think this package of legislation was one of the last that he introduced. He said:

This legislative package shall ensure Australia maintains a welcoming environment for investment—but one that ensures that the investment is not contrary to our national interest.

These reforms shall ensure that from 1 December 2015, Australia's foreign investment framework is more modern, simple and effective.

Importantly, it will add integrity to the system, so that everybody plays by the rules. With integrity comes compliance.

By granting new compliance powers to the Australian Taxation Office (ATO), and additional powers to the Foreign Investment Review Board (FIRB), the government is ensuring that Australians can have confidence that our foreign investment framework will be effectively enforced.

Australians expect our foreign investment rules to be strong, effective and enforceable.

And that is certainly the feedback that I have had from constituents, from a lot of our members, and also from those in the farming community. He continued:

Our foreign investment rules have not been significantly revised since introduction in 1975, 40 years ago—

and we have seen a huge amount of change in those 40 years. I think we now have a global market that people never envisaged 40 years ago—

and they have not kept pace with the changes in global investment.

I divert from his comments here to say that, again, the laws have not only not kept pace with global investment but just not kept pace with change globally. The former Treasurer then went on to say:

The government recognises the changing landscape and has already taken active steps to enforce the existing rules and act decisively on foreign investment breaches.

He then went on to talk about the enforcement of penalties that had finally been occurring. The former Treasurer then went on to say:

The Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 makes essential changes to simplify the system, strengthen the framework and ensure the rules are enforced.

It is not often that I quote the former Treasurer in this place. Those are exactly the sorts of things that have been needed for a long time. It is a great shame that, as the former Treasurer articulated, it has been 40 years since substantive changes were made to our foreign investment rules. So it is about time.

This package of bills—because it is a package of bills—changes the thresholds that determine when foreign investment needs to be reviewed, increases penalties for noncompliance, establishes application fees for foreign investment and establishes a register of foreign investment in agricultural land. The bills establish in legislation and accompanying regulations many issues that were previously dealt with in regulations, including issues around the much lower threshold for foreign investment review. We support measures to ensure that foreign investment is subject to rigorous assessment to ensure that it is in the national interest. It is one of the points that we have made very strongly in this place before and, also, whenever we have had an opportunity to talk about these particular issues. We know, as I said, it is absolutely essential to ensure that we do that assessment so that we are able to protect our prime agricultural land and water resources, which are critical as well. It means that we can protect our food security into the future. The public has a right to know the level of foreign ownership of agricultural land and water. I will reinforce that I have had constant feedback about this issue from constituents in Western Australia and, also, given that I am the agricultural spokesperson, from people around Australia.

The Greens economic policy points out that our aims are to increase the transparency and accountability of the Foreign Investment Review Board in making its decisions against the national interest test. The national interest test should be strengthened to incorporate national, ecological and social objectives. Again, we have had this policy intent for a long time, and I am glad the government is finally catching up, but it is a bit disappointing that the Labor Party is not on some of the elements of this legislation. The Greens believe that for Australia to make informed and strategic decisions about our agricultural land and water resources we must accurately track and consider each bid by foreign investors, particularly sovereign nations. The Greens support the creation of a review of foreign ownership of agricultural land to constantly track overseas purchases. We support the moves of the government to introduce a register for agricultural land. However, we see no reason why the government cannot commit here and now to also introducing a register for water holdings.

The government supports a lowering of the threshold for consideration of the national interest by the Foreign Investment Review Board for purchases of agricultural land by a foreign private entity, including cumulative purchases by the same entity. That is actually really important because, in the past, we have seen smaller purchases under the threshold by the same entity. If you look at this in a cumulative way, these become a much more significant purchase than a series of smaller ones. So we do need to make sure that we track those cumulative purchases.

However, we would also like the legislation to go further to include similar threshold tests for foreign purchases of water holdings. You have to look at this issue from the perspective of why we are doing this for agricultural land. The same reasons apply for water resources, particularly in the context of global warming and the impact of climate change on our water. In my home state of Western Australia, we have already seen a significant drying of our environment in the south-west. We are in the middle of about the third step down in rainfall decline in the south-west of Western Australia. We are going to be seeing much more erratic rainfall, much more episodic events and much more extreme event. This is all going to impact on our water resources. Globally, people know the value of water resources. Australia needs to recognise that and needs to be doing the same thing for water holdings and water resources as we are doing for agricultural land. For much of our production, as has been articulated in this place on many occasions, water resources go hand in hand with agricultural production. So why would you not make sure that you are doing the same for our water resources?

The Greens have long advocated for a stronger national interest test to be applied by the Foreign Investment Review Board for purchases of agricultural land and water resources. The Greens also support a hurdle being placed on the purchase of agricultural land and water by wholly owned subsidiaries of foreign governments, which is, again, a position that we have long articulated. The former leader of the Greens, Christine Milne, in particular, pursued these issues, and we are continuing to pursue these issues. The Greens have articulated frequently, particularly in the run-up to the last election, our vision for our agricultural sustainability into the future, and also our plan for food security. Of course, prime agricultural land and our water resources are absolutely critical to our food security.

Normally ignored as an asset class, the fragility and collapse of traditional investment sectors surrounding the global financial crisis saw a rapid increase in the number of financial actors investing in food commodity trading and assets. With it came a rise in food price speculation. Such speculation focused on profit maximisation has added to food price volatility and separated food prices from real supply and demand.

There has also been a re-evaluation of the value of concrete assets associated with the food system as private investors wake up to the shrinking supply of arable land and fresh water and the implications of climate change. Again, we are seeing the impact of climate change and global warming being factored in by decision makers globally. Willem Buiter, the chief economist at Citigroup, pointed out the new attitude from the financial sector when he stated:

Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.

The rapid accumulation of land and water by the financial sector is concentrated in the developing world and is now causing significant concern. The purchased agricultural land is being used to grow food for export to other markets as part of the food security of wealthy countries reliant on food imports that now see trade exposure as an unacceptable risk and to grow crops to meet other demands such as for biofuels. Again, this highlights the need for Australia to upgrade its laws and to take account of global markets and global expectations.

Because of the loss of access to local land and water, increasing food insecurity and the sometimes forced removal of local farmers, this trend in the global south has been termed 'land grabbing'. Oxfam has shown that in the last decade an area of land eight times the size of the UK has been sold off for this new interest from financial markets. It is enough land to feed one billion people. While blatant land grabbing is not occurring in Australia, what is happening is a significant surge in purchasing of our agricultural land and water by foreign companies and countries. Recent Senate inquiries have heard that foreign companies such as the Hassad Australia company of Qatar have explained that, as their country is wholly reliant on food imports, they now have a specific policy of acquiring land and water in countries like Australia in order to grow food and send it home.

Australia's policy settings do not reflect the new reality of foreign purchases of agricultural land and water for both domestic food security and asset speculation purposes. We do not maintain a register of foreign agricultural land and water purchases. There is no mandatory application of the national interest test to such purchases, and the threshold for any consideration of potential implications was $250 million until only towards the beginning of this year, when the government acted to reduce it to $15 million. It is now, of course, incorporated into this legislation. For far too long that asset threshold was far too high, with governments—and I say 'governments' because it is both conservative and ALP governments—not acting to address that specific issue. It has been addressed due to persistent efforts by the community and by the Greens and those who are paying specific attention to these issues and who understand the new geopolitics of food. It is part of that change that I was talking about that has occurred over the last 40 years. Things have moved on, and I think Senator Leyonhjelm made some comments previously about our agricultural sector being stuck in the past. No, this is about what is happening now and into the future. This is bringing Australia up to speed with the global geopolitics of food. This is bringing Australia into the future in terms of how we look at food security.

If you look broadly at the global context, countries that rely on imports to feed their people are increasingly buying land and water in other nations to grow food, as they are concerned about the impacts of climate change and global warming on food availability and price. Multinational corporations have also realised the value of agricultural land and water and have begun investing heavily in these assets across the world, as they can see there are large profits to be made if they control the means of producing food. That is absolutely true. As a country with a strong agricultural sector and as one that is constantly adapting to both local growing conditions and the global context, Australia is one of the countries attracting the interest of foreign buyers. Yet our laws on foreign investment in agricultural land and water have been lax up till now, and we do not keep accurate records to track levels of foreign ownership. As I said, up until very recently only purchases of more than $250 million were subject to the national interest test by FIRB, the foreign investment review board. On top of that, FIRB is not required to take into account cumulative purchases by the same foreign entity that comprise $250 million or more. This legislation is way past time.

While foreign investment is important for Australia, we appreciate that it is critical that we have much clearer information and a picture of what is happening and a stronger national interest test that is applied to the purchase of such vital assets as our agricultural land and water, particularly in this time of growing food insecurity globally. Other countries with significant agricultural assets, including the US, New Zealand, Argentina, China and Brazil, have all placed restrictions and greater levels of scrutiny on foreign land purchase. This is not Australia being an outlier; this is about the protection of our valuable agricultural land and water resources. I keep adding water resources because we need to be doing the same thing for them. We need to have an idea of how much of our water resources are foreign owned. The Greens want to ensure that we have a balanced approach to our consideration of foreign investment in our essential land and water. These are essential assets for our country.

Climate change is going to have an impact on our climate; that impact and our growing population are going to have a significant impact on global production of food. It is essential that Australia is assured of its food security, and of how we are looking after our prime agricultural land and water resources.

My colleague Senator Whish-Wilson has outlined the Greens' position on this legislation and the need for some amendments to this legislation. I look forward to hearing the committee debate on this very important package of legislation.