Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked by Opposition senators today.

However, my own remarks will focus on the question of foreign investment in agriculture. What we saw today in the answer provided by Senator Sinodinos was the glaring inconsistency within the coalition about the approach to the agricultural sector—one of the most important sectors in terms of Australia's economy in the next couple of decades. Senator Sinodinos quite correctly points out that Australia, historically, over many hundreds of years, has been dependent on investment from overseas sources to supplement our own savings. Senator Sinodinos will be aware, I think, that there are few sectors where this is more important than in the agricultural sector. The National Farmers' Federation themselves have estimated that $1.2 to $1.5 trillion would be needed to realise the potential for this sector over the next 35 years.

We understand that this potential derives from the ability to expand our export sector to a very hungry market to our north. There are already 250 million people who are identified as being part of China's middle class, and that number is set to grow exponentially. As that grows the demand for food and fibre products will also grow exponentially as the middle class seek to improve their circumstances and their wealth. The opportunities for Australia in that context are absolutely enormous.

When sensible people in the business community here are thinking about our future, it is frequently the agricultural sector that they point to. In just one example, last year a Business Council of Australia report about Australia's competitive advantage pointed to the agricultural sector and to the food manufacturing sector as areas where Australia has the opportunity to be a global winner. In that environment, investment will be absolutely critical. There is absolutely no way, as the Farmers' Federation has acknowledged, that this can be met within Australia's savings pool.

So what is very puzzling is the stance taken by the government on this question, as evidenced by the responses today to questions from Senator Wong. There is no clarity about the role that this government anticipates for foreign investors in the agricultural sector. We see that in legislation we imagine will come before this place shortly that seeks to establish different tests and different thresholds, depending on the origin of the funds. There is absolutely no public policy rationale for a decision of this kind.

In his remarks today Senator Sinodinos pointed to the importance of scrutiny, to the importance of the Foreign Investment Review Board, in providing confidence to agricultural communities. We support that. We support the FIRB and we support its role. We support, indeed, the idea that the FIRB might focus its attentions on sensitive sectors. What we do not understand is the distinction that is made not on the sector itself but on the origin of the funds. So, the proposal to introduce a differential test, depending on whether the funds come from China, from Singapore, from the USA or from Chile, is not grounded in a sensible public policy rationale but instead speaks simply to a blinkered view from those opposite about the future of agriculture in this country.

I will digress briefly to make the point that after a long debate about the Chinese free trade agreement, where we on this side sought to stand up for the rights of Australian workers, to have their jobs put first in any decision about importing skilled labour, it is particularly galling to see the government now move to implement a completely baseless approach to foreign investment in Australian agriculture. It is disappointing that Senator Sinodinos would not repudiate the remarks by Senator Williams around selling what the land grows and not the land, because this kind of simple reduction of the challenge for us in finding appropriate levels of investment in the agricultural sector does not do anyone any good. It does not serve the agriculture sector well, it does not serve country people well and it does not serve the country well.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

From time to time I get a little bit confused about the Labor Party's position on this issue. Today they have apparently taken the position that any more scrutiny on foreign investment and agriculture is a bad thing, but only a couple of years ago their alternative Prime Minister, their leader Kevin Rudd, the person they put up to be in charge of this country, was asked at the Asia Society Policy Institute about investment in Australian rural land, and this is what he said: 'I am a bit nervous, a bit anxious, frankly, about simply an open-slather approach on this. I think when it is about rural land and land more generally, we need to adopt a more cautious approach. We should not have open slather.' It was just two years ago that the leader of the Labor Party said he wanted a more cautions approach to foreign investment in land. But now we have a completely different position from the Labor Party on foreign investment in rural land. It is exactly the same approach they took to foreign investment in residential land—completely ad hoc and all over the place.

When they were in government, in 2009, I believe it was under Minister Bowen at the time, but I stand to be corrected, the Labor Party changed the regulations on investment in residential land to allow more open-slather and allow more foreigners to invest in residential housing, particularly existing housing. There was a huge surge in foreign investment in our major cities, particularly Sydney. But within two years they had reversed the approach and gone back to the previous approach, which basically means that foreigners generally cannot invest in residential housing or land in this country—in existing housing, I should say, because they can invest in off-the-plan and in new housing.

The Labor Party has been all over on this issue for a number of years. There was also a massive inconsistency with how we treat investment in residential property and how we treat investment in non-residential property. There are differences between them. But to come into his place and try to argue that more scrutiny and more transparency on investment in agricultural land is somehow going to make the sky fall in—it just does not make sense. We make it such that all foreigners cannot buy an existing home in Sydney or Melbourne. Why is there such inconsistency. Why do we never hear anything from the Labor Party about why foreigners should be able to invest in residential housing in our major cities, but they want to bang on about investment in rural land?

The reality is that a few years ago we increased the thresholds on Foreign Investment Review Board decisions to $250-odd million. It has been going up with inflation every year, but it sits at about $250 million. That means we provide no scrutiny at all to investment in agricultural land, because, of course, there is almost no farm in the country—one farm, perhaps: Cubbie Station—that is worth more than $250 million. It is an anomaly that we are fixing with the changes that are before the Senate at the moment.

Even after the changes we make we will still be one of the most liberal countries in the world for investment in agricultural land, and we should be, because Senator Sinodinos is correct that we do need investment in our agricultural sector. Because of that we will be and will remain one of the most liberal countries in the world in welcoming foreign investment. If you go the US, a bastion of free markets and open competition, there are 11 states in the US where no non-residents can purchase farmland—none at all. In places like Nebraska, Oklahoma, Iowa, Michigan, Missouri and North Dakota—many of them big farming states in the US—they do not allow any non-residents to buy farmland at all. In a few other states only US citizens can buy farmland. In Canada there are different restrictions between different provinces but, again, generally, foreigners are restricted to purchasing less than 40 acres in most farming states in Canada. In New Zealand any parcel of non-urban land of more than five hectares is defined as 'sensitive' and purchase by foreigners must receive approval by the Overseas Investment Office.

Our changes to bring the threshold down from the $250 million-odd level to around $15 million for scrutiny will still make us one of the most liberal countries of the world but will provide for some scrutiny, at least, for investment in our farmland. I believe the Australian people expect us to scrutinise investments in land in this country to make sure that they are in our national interest and to make sure that decisions that we make as a government accord with the principles established in the Foreign Acquisitions and Takeovers Act, which are to make sure those investments are in our national interest.