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

We had the interesting spectacle today of Senator Cormann, who I notice is not handling this legislation, tabling a copy of a letter from Mr Morrison and Mr Joyce, co-signed by the Leader of the Australian Greens—and I see Senator Cormann has now arrived in the chamber. It is an interesting proposition because the government constantly rail against the Greens as being economic vandals and irresponsible and anti jobs. Witness Senator Brandis in question time today having a real go at Senator Waters about her question. These are the very people the government are doing a deal with when it comes to economic policy. Let us be very clear about what they have done a deal on. They have done a deal on a set of propositions that have been roundly condemned by the business community—the Business Council, ACCI, AiG—and a range of groups, including the Australian Food and Grocery Council and I think I saw one of the paper industry groups today also supporting the position Labor have taken on this.

Despite the government's rhetoric about the Greens being anti jobs—and really you cannot go through a question time in this place without listening to that particular lecture—we have seen that they are happy to sit down and do a deal with the Greens. Senator Whish-Wilson is grinning at me. I am not sure whether he is happy about the fact that the government are now welcoming the Greens into their arms, welcoming the Greens to the government's economic policy fold, or whether he is uncertain about it. But certainly what we have seen today is an alliance between the Greens and the Liberal Party when it comes to the economic direction of the government.

So every time we hear Mr Morrison, or Senator Brandis in this place, tell everybody how the Greens are anti jobs, let us remember that the government have done a deal with the Greens in this lovely little co-signed letter I have here, that makes clear that their anti-jobs and anti-investment policy as set out in this bill, which has been roundly criticised by the business community, is being achieved with the support of the Australian Greens.

The point that we need to be clear about in terms of this deal is that, under the terms of the agreement with the Australian Greens, investors into this nation will be subject to a register of unknown application and unknown design. It is also clear that more red tape is coming because the government have committed to ongoing review and changes down the track. Not only do we have an agreement between the Greens and the government on this economic policy—a policy that is opposed by the business community and which has no public policy rationale; we also have a promise for more red tape and a promise for more uncertainty. The register which is the subject of the deal is of unknown application and unknown design.

It would be interesting to know from the minister whether or not these arrangements, or what he says is the register of foreign ownership of water entitlements, will extend to and if he can provide further detail of that policy which has just been announced. Further, what does Mr Morrison mean when he says that there will be a process for developing an implementation approach involving full public consultation? And, further, what does he say is meant by: 'Once the proposed register has been implemented and data is available on the level of foreign ownership of water entitlements in Australia, the government commits to undertake a review of the treatment of water under the foreign investment review framework'?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Wong for her contribution and for those questions. Senator Wong read out quotes from a letter cosigned by the Treasurer, the Minister for Agriculture and Water Resources and the Leader of the Australian Greens, Senator Di Natale, and I have to say it means what it says, and it has been put very succinctly, clearly and precisely. I can read the letter out again, but I think that the Australian people well understand what is meant by what is on the table. Obviously there is a process that is set out in this letter, which the government will implement consistent with what is part of this agreement. I am not quite sure which bit of this letter is not clear for Senator Wong.

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

Perhaps I will go through it in a bit more detail. Can the minister explain the mechanism by which a register of foreign ownership of water entitlements will be applied or be given effect, and how does that relate to the existing state, territory and federal registers or datasets of ownership of water entitlements?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Wong. Senator Wong clearly was part of a government that did not ever engage in genuine consultation. She is asking me questions about something that we actually have not got to yet. As we say very clearly in the letter—and Senator Wong has quoted this—'The government will shortly commence a process for developing an implementation approach involving full public consultation. We consider this process important and necessary to ensure that technical issues can be addressed.' So the sorts of details that Senator Wong is asking me about are details that will be dealt with and addressed through the process that is outlined in the letter that I tabled earlier.

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

Can the minister advise what consultation, if any, there has been with state or territory governments and industry in relation to the promise which is laid out in this letter.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As it says in the letter, 'The government will shortly commence a process for developing an implementation approach involving full public consultation.' 'Full public consultation' obviously means exactly that: full public consultation. That process is yet to occur. To this point, what there has been is consultation by the government with interested parties in the Senate and through the internal processes of government. But before we reach a final landing point in relation to relevant matters, as is envisaged in the agreement outlined in this letter, there will be further consultation—indeed, there will be full public consultation—on all relevant matters.

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

Do I understand from that answer, Minister—and I will ask the question again—that there was no consultation with state and territory governments prior to this announcement?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This is clearly a process that has gone through the proper internal processes of government. It is going through the proper democratic processes of the federal parliament. This is a government that is committed to appropriate consultation with all relevant stakeholders. That is why, openly and transparently and very clearly, we have committed ourselves—I am quoting again from the letter—to 'shortly commence a process for developing an implementation approach involving full public consultation'. This process, which we consider to be important and necessary, will ensure that relevant technical issues can be addressed, and of course that will involve, appropriately, consultation with the state and territory governments as appropriate.

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

If we can cut through the kind of—I was going to say 'spin', but the minister might get offended by that, so—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I'm not easily offended.

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

Then I will say 'spin'. It is a very simple question: was there any consultation with state and territory governments, who are the holders of this data, prior to this announcement being made.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I will try it again. I could not be clearer if I tried. This letter is cosigned by the Treasurer, the Minister for Agriculture and Water Resources and the Leader of the Australian Greens, Senator Di Natale—who, by the way, has brought a welcome and refreshing change to the approach by the Greens. Under his leadership, the Greens are now very much more constructively and much more positively engaged in finding common ground with the government on important areas of public policy and important areas in the national interest. What we have done on this occasion fits within that category. In recent months, the government and the Australian Greens have been able to find common ground in relation to a number of important public policy matters.

In relation to the specific issue in front of us, the government fully appreciates that in the context of an internal policy development process within government through the appropriate processes of government, and in the context of the appropriate democratic process in the Australian parliament, including the process through the great institution that is the Australian Senate, not all the consultations that you might otherwise like to pursue can be conducted in the time available. That is why we were very keen to ensure that there would be a proper process involving full public consultation with all relevant stakeholders, something that is explicitly enshrined in this letter. In order to assist Senator Wong, I will just quote from this very clearly written letter to Senator Di Natale again: 'The government will shortly commence a process for developing an implementation approach involving full public consultation. We'—the government and, given that he has cosigned it, Senator Di Natale as well—'consider this process important and necessary to ensure that technical issues can be addressed.'

So we are really in a violent multipartisan consensus here. We—the Australian government and, I assume, the Greens—share Senator Wong's concern for appropriate levels of consultation in relation to this particular matter, which is why it has been enshrined in this letter and which is why it will take place. All of the specific issues that are in Senator Wong's mind will be dealt with in due course.

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

This can be a very long discussion. It is a very simple question. The minister likes to put a lot of words into his answers, but he is actually not answering the question. It is a very simple question: were state and territory governments consulted before this policy decision was made by the federal government? That is all I am asking.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I say very clearly again that we, the government, have gone through all of the relevant and appropriate internal processes of government in determining our position in relation to this particular proposal, and this is now a matter to be considered by the Senate. If the Senate agrees with the amendments that have been foreshadowed by the Greens and which the government have indicated in this letter that we will support, there will be a full process of consultation including, if appropriate, with the state and territory governments. I might just add here, though, that the state and territory governments do not hold data on foreign ownership of water entitlements. So, while I understand that Senator Wong might be trying to prosecute a political point, I do not really understand how this question is motivated or where this question is coming from. But, given that we are committed to full public consultation, if any state or territory government has an interest in this matter, before any relevant decisions are finalised through this process envisaged in this letter, there will be consultation with relevant state and territory governments.

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

Who does the minister say currently holds information about ownership of water entitlements?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This falls into the category of technical issues to be addressed in the context of full public consultation.

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

That is a pretty fantastic response. The government has agreed to a register of foreign ownership of water entitlements in a deal with the Greens—the 'job-destroying Greens' that this government cannot wait to point the finger at; now it embraces them—and the minister in the chamber cannot even tell the Senate who currently holds the information on ownership of water entitlements.

Senator Cormann interjecting—

Well, apparently that is a technical issue! It is a minor decision! It is a minor technical policy issue—who actually holds the information on ownership of water entitlements. That apparently is a technical issue that the minister cannot tell us about. So I ask this question: why were the states and territories not consulted before the government determined to agree to a national register, or a register, of foreign ownership of water entitlements within 12 months?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Chair—and, through you, to Senator Wong—as I have indicated now on several occasions, the state and territory governments will be consulted, and that is because this government is committed to proper and thorough consultation. The letter co-signed by the government and the Greens envisages full public consultation. Senator Wong obviously knows that.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I just want to highlight to the Senate that this issue has been looked at by the respective Labor and Liberal governments now for five years and that the Australia Bureau of Statistics conduct a survey called the Agricultural Land and Water Ownership Survey where they actually do collect the data on this issue. They collect the data on issues of water entitlements as well as agribusiness. That data was first released in 2013, and in it we could compare the figures from 2010 to 2013. That showed that we had seen an increase of 55 per cent on 2010 levels of the level of foreign ownership in water entitlements, as one example.

So this data is collected via a survey, the Agricultural Land and Water Ownership Survey, called ALWOS. It is being updated at the moment and may be due for release either next year or the year after. This is a really important point that I want to make here: the Bureau of Statistics has been collecting data around this. I am hopeful that it is going to be a reasonably easy process to compile the register because this information has been collected, and it makes sense for us to take that and add it to a register.

While I am on my feet, I will respond to Senator Wong's proposition that the government has been outsourcing its economic policy to the Greens. We are in this place to get good outcomes, as I am sure the Labor Party are as well. We have had a policy in place for some time now—in fact, for many years—to get a register of water holdings as well as agricultural land. Senator Milne would love to be standing here speaking on this today. This has been her area. She had a comprehensive policy on it, going into the 2013 election. And this is something that Australian farmers federations have been calling for as well. In fact, I do not think there would be a single farmer around the country who would not agree with the idea that we should have a register of foreign ownership in water holdings.

It goes to the old adage: you cannot manage what you do not monitor. It is actually a bit of a disgrace that we do not already have a register which takes a holistic view of the level of land ownership and water ownership in this country. This is something that the Greens have campaigned on for some time. We are quite proud that we have been able to do a deal with the government on this, and we have been able to see one of our policies put into practice. The agricultural register has been a policy of ours. The threshold is probably not as low as we would like to see. Nevertheless, $15 million is better than the $252 million and the spaghetti bowl of other thresholds that we see that have been negotiated through bilateral trade deals. There is not really much we can do about that once they have been negotiated. So this is something that we are proud to stand here today and say we have been able to negotiate with the government.

There is a sunset clause in the deal, of course, which says that if this is not done within 12 months the legislation will lapse and we can have the debate again. But, from our very fruitful discussions with the government, I think this is something I can say they are interested in and I would hope would have done on their own anyway. This is good policy, and it is going to be well supported round this country.

I would urge the Labor Party to stop playing politics with this. I know why you are doing it, but this is actually good policy. It is nowhere near far enough towards where we need to go. We need to get the register first, then we can work out what levels we need to apply to FIRB thresholds around water. Then, following that, we should have a bigger discussion about what is in the national interest. Things such as food security, for example, threats of climate change and these kinds of things that my party hold very, very dear to us can be addressed in a systematic and formal sense. So I would urge that the Senate support the Greens amendment on this water register and that we get on and pass it into legislation.

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

I thank Senator Whish-Wilson for describing it as 'doing a deal'. I think, despite what the government says, it is a deal. Secondly, I take with a grain of salt, as do all of us in the Labor Party, his professed commitment to action on climate change, because we sat here and watched him vote with Tony Abbott, Senator Bernardi, Senator Minchin and a range of others who did not want any action on climate change against the CPRS. And then, a few years later, we watched him vote for a scheme that was actually browner for politics, so I am not sure the lecture on 'playing politics' is apposite.

But, more importantly, what the Greens should understand about our position on this is that we are actually pro-jobs and we disagree with treating investment in agribusiness and agricultural land as being more sensitive than investment in defence industries and other sensitive areas. We just disagree with it. We appreciate that people have different views. Senator Williams is here, and I know he has a different view to me. I just think that dollars invested in this country is one of the ways we ensure, and have always ensured since the arrival of the First Fleet here, that we are able to create more jobs in Australia for Australians. I think that is not a bad thing. Can I say—

Senator Williams interjecting—

I will take the interjections from that side, because what is fascinating about this is the economic policy from those opposite, many of whom I know agree with me, is being dictated by Senator Williams and Senator Whish-Wilson. And those in the Liberal Party who profess themselves to be people who believe in sensible economic policy are signing up to a policy which has no rationale. I am happy to go through that in more detail in this committee stage, but right now I am trying to understand. And I think if you do a 'deal'—in your words, Senator Whish-Wilson—I think people are entitled to understand it. They are entitled to understand what this means.

Senator Whish-Wilson laid out what was, frankly, a smorgasbord of red-tape propositions which might come down the track in relation to this issue. The minister is a Western Australian, and I would have thought he understood the importance of the Federation and the interests of the states and territories. And I was asking him why there was no consultation with state and territory governments. That was my first question. And the second question is—I want to know what the cost of this promise is—what is the cost of this deal?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, I have to respond to some of the rhetoric in the opening remarks of Senator Wong before she got to her questions. This government is absolutely and totally focused on growth and jobs. We are pursuing a growth agenda. We are pursuing an agenda which will deliver stronger economic growth and more and better jobs. I am very happy to take you through that in great detail, but we have gone through that on many occasions in the past.

Of course the government recognises the absolute importance of foreign investment to our economic development and our future economic success. We are strongly in favour of foreign investment in order to ensure Australia can reach its full potential. We need further foreign investment from right around the world, and the more the better. But also, because we understand the importance of foreign investment, we also understand that it is very important to have public support and to maintain community support for the way these foreign investment flows are managed. We also understand that it is important to have integrity in the system such that people have confidence that, whenever a particular foreign investment proposition would be contrary to the national interest, there is a process to ensure that these sorts of proposals are properly scrutinised. And, where a foreign investment proposal is considered on reflection to be contrary to the national interest, it is important for the Australian government to be able to decide that that particular foreign investment proposal cannot proceed.

There are particular sensitivities when it comes to agricultural lands, which the government has long recognised. We took policies in relation to these matters to the last election, and they are widely understood and are reflected in this legislation. I understand that Senator Wong has always been against this policy, but it is a policy we took to the last election and it is a policy that was ticked off by the Australian people. We are now doing what we promised we would do, and that is to seek to implement that policy we took to the last election.

Incidentally, I note that in the past Senator Wong argued for and urged the maintenance of a $1 billion threshold for any Foreign Investment Review Board scrutiny or foreign investment proposal for Australian agricultural land, and now it appears that their proposed amendments actually recognise that that is way too high. They are proposing a $50 million threshold rather than the threshold that the government has put forward. In principle, you have actually conceded the point that we have been making all the way through, and the debate is now just a matter of where the line in the sand should be appropriately drawn. Is it at $15 million or is it at $50 million? That is the argument we are now having.

In relation to the questions that Senator Wong has been asking again and again, as I have indicated in response to those same questions previously, the state and territory governments will be consulted as part of the full public consultation process, as has been envisaged. And, if this public consultation cannot come up with a proposal that the government—or for that matter the parliament—is satisfied with, I guess we then end up in the circumstance where the sunset clause would be triggered, and at that point in time we could be having this whole conversation about the government's original proposal again. Hopefully, it will not come to that. Hopefully, through the full public consultation process, we will be able to come up with a process that is as efficient and effective as possible, and that minimises the level of red tape but by the same token helps to achieve the objective pursued by the amendment foreshadowed by the Greens, which seeks to extend the information collected from agricultural land to also include relevant water entitlements.

Senator Wong asked me about the cost, and she knows that is just an attempt at a trick question. We have transparently put on the table, for the Senate's consideration, the terms of an agreement—and I am quite happy to call it an agreement—the government has reached with the Greens. That is another thing that Senator Wong seems to find quite exciting; that we concede we have reached an agreement. Clearly we have reached an agreement, and I have tabled the agreement we have reached. And the terms of the agreement are transparently there for all to see.

We have outlined the process for consultation and development, but the way this is going to work in detail will of course be worked out through that process. Questions in relation to actual costs would best be addressed at that point except to say that, as we do with all things, we will seek to ensure that this small extension to what the government put forward is managed in the most efficient and effective way possible.

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

I have a few points and some questions. I think Senator Whish-Wilson did the chamber a favour not only by confirming the deal but by making clear that from the Greens' perspective this agreement means that the water register is just the start. It is the first stage of a plan to roll out more red tape in relation to foreign investment, this time in water. That is certainly what his proposition was; if that is not what the government says it has agreed to, it probably should say so in the interest of transparency.

I also want to make a couple points in response to Senator Cormann's assertions about this government being all about jobs. I would like the minister to explain to the chamber how creating more red tape and more barriers to investment in this country is good for jobs.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I explained this in my previous answer. Maintaining strong public support for a foreign investment review scheme that has integrity and where the public can have confidence that any foreign investment proposal that is contrary to the national interest is picked up through that process and does not proceed is actually an important part of making sure that all of the very good foreign investment that we attract to our country to facilitate development in agriculture areas, the resources sector, the economy as a whole, the services sector—you name it. In order to attract all of the very good foreign investment and continue to be able to attract that, maintaining public confidence in the integrity of the foreign investment review arrangements is actually very important.

This government has made an absolutely unprecedented effort when it comes to cutting red tape costs for business. So far we have been able to reduce red tape costs for business by more than $2 billion a year over the past two years as part of an effort to bring down the cost of doing business as part of the effort to improve our international competitiveness and to help Australian businesses be even more successful moving forward. Of course, our free trade agenda is very much part of our efforts to help Australian exporters be more successful in some of these key markets with which we have been able to finalise agreements—for example, China, Japan and South Korea. The Minister for Trade, Minister Robb, is now working very hard to secure agreements over time with India and the European Union.

This government has a very clear and demonstrated record when it comes to pursuing policies that deliver strong growth and more jobs. The evidence is there as well when you look at what has been happening to the employment market even over this past year.

Senator Wong asked about some comments that Senator Whish-Wilson made about this just being the start. Senator Whish-Wilson is of course entitled to express his aspiration in terms of future policy action from the Greens' perspective. From the government's perspective the extent of our agreement is reflected in this letter. That is not to say that there will not be further conversations in good faith with senators from any party in the Senate. We as a government are of course always keen to discuss public policy with well-intentioned senators, whether they are from the Labor Party, the Palmer United Party, the Greens, Senator Xenophon's party or whichever party or independent grouping they come from. We are always all ears in the pursuit of common ground when it comes to advancing good public policy.

To directly answer the question that was asked by Senator Wong: the extent of the government's agreement is clearly spelled out in this letter co-signed by Treasurer Scott Morrison, Minister Barnaby Joyce and the Leader of the Australian Greens, Senator Di Natale. I think it is self-explanatory.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I wanted to add to the debate on this. If getting a good policy outcome that is in line with your long-held party policy is doing a deal then I am quite happy to say that we have done a deal. So what? This is exactly what we are in parliament for. We are in parliament to get deals for the people who vote for us, for our members and for the people who share the same philosophies as us. As I have said, Senator Milne has campaigned for a long time to get a land register and a register of water holdings. We have managed to do that with the government, and I once again thank them for working with the Greens in this respect.

In relation to what comes next, I am very hopeful that, once we build a database and we have a register, we can then look at potential FIRB triggers or thresholds for water holdings. But let's deal with this first. That is something I would like to see in the future; I have made that very clear. The government has said that they would consider that, but they have not agreed to that. Nevertheless, that is something we think would make perfect sense. I think we need a bigger discussion around what is in the national interest. We all know that the national interest test as it stands now can be highly politicised. I think that, if we can get better parameters around that, so be it.

Unfortunately, I do not have the policy here in front of me. If I had printed it, I would read it word for word. Senator Milne in 2013 went to the election with a policy on what should be included in the national interest test. There were of course, as you would expect from the Greens, issues around food security and climate change that we would like to see included in this. We are up front. It is on our website. I encourage people listening to this to go there and have a look.

Once again, I think this really has nothing to do with xenophobia; this has got to do with collecting good data. As I mentioned earlier, you cannot manage what you do not monitor, and it is a shame that we do not have that in place at the moment.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I rise to make a brief contribution to this. I want to put some facts on the record here. In opposition, my now leader, or my then leader as well—we are pretty consistent with our leaders in the National Party!—Mr Warren Truss, chaired a committee which involved people like the now foreign minister, Julie Bishop, and the recent Treasurer, Joe Hockey. It was about this very issue of foreign investment and foreign ownership of land.

I want to put on the record that I am certainly not against foreign investment. I will give you an example: Chinese company, Shanghai Zhongfu, has won the bid to lease and develop 13,400 hectares of land in the north of the state. This refers to the Ord River scheme, where the state and federal governments—the Western Australian government and the federal government—spent some $500 million building the roads and irrigation channels et cetera. Kimberley Agricultural Investment, an Australian company owned by Shanghai Zhongfu, is set to construct a $250 million sugar mill near Kununurra, where it plans to produce and harvest four million tonnes of cane a year and about 500,000 tonnes of export sugar crystal.

This is investment. It is real investment that grows production and grows jobs. I think there are going to be some 450 jobs up there, mainly for Aboriginal people. It grows exports. It grows GDP. It grows tax-take for Canberra. It is an investment that grows the production of our country. When this was announced, I did not hear one National Party senator or MP complain about that one bit. It was a new investment, a growth in our country.

It is when we have fully-established farms and we simply sell them off—that is when I have a serious problem, because those farms are at peak production. They might be in the New England area, where I live, and they might be grazing country that is well-fenced and into holistic grazing. They have been pasture improved, they have been fertilised and they have been watered well. When we sell farms like that, where does the profit go?

I will give you an example. American super funds have been buying farms up in northern New South Wales. I have asked this question of many people. When an American super fund buys our farm, and that farm makes a profit—and I am well aware that they do not make profits every year; I have had a lifetime of that—that profit is taken back to America, instead of being spent in the town of Inverell. How is that good for Inverell? No-one has ever answered the question.

When it comes to the register, I think this is a very good idea. In fact, it was Mr Rudd, in a previous government, who said he would establish a national register of our land. That is what he said. Of course, what did he do? He did absolutely nothing. So the register needs to be set up. It will be set up by the end of December. Foreign owners of land must register with the ATO by the end of December.

I want to make the point that I distinguish between foreign investment and foreign takeover. Cubby Station is at maximum peak production, maximum water allowance, maximum irrigation and maximum development. When the foreigners bought it, they could not increase production—it had already peaked; it is at its cap. They are not employing any more people, but they will take the profit out of that property when they make a profit on it. If they have water, they will certainly do that.

I want to quote Senator Wong from The Australian:

We will move in the Senate to amend the legislation to remove the requirements for FIRB screening of investments in agribusiness worth more than $55m.

Well, Senator Wong, it is currently at $37.8 million. That is what it is. If you want to buy a business in Australia—an agribusiness, or any business—the limit is $252 million; anything above that has to go to FIRB. But if you want to buy more than 15 per cent of, say, a $300 million business—15 per cent of $252 million is $37.8 million—so the level is actually $37.8 million now. When some foreign company wants to buy into an agribusiness, or any business here, once they get to $37.8 million dollars at 15 per cent it goes through FIRB. This bill is saying that for agribusinesses that might be worth $100 million that if it is a $55 million portion or more that they wish to buy—it might be a $100 million business and they want to buy 80 per cent, $80 million worth—that will go through FIRB under these new regulations. So there will actually be two criteria there.

I want to make it clear that I am not against foreign investment, so long as it increases jobs, increases production, increases exports, increases GDP and increases the tax take for Canberra. That it is a win-win all the way through. It is quite amazing. We need a lot of investment in our housing industry. We have these regulations, especially in the cities, of course, all across Australia, that foreigners cannot have a free for all buying houses. We have had it where they can just buy farms. Why the difference? That is what this bill does. The coalition, working in opposition, took this to the last election—that this would put in place this very criteria—to see that we actually monitor who owns our farms. We believe that about 12 per cent of our properties are now foreign owned—12 per cent of Australia. Qatar made it perfectly clear: they are buying prime land in Victoria—what for? To take food back to their country.

I want to see us grow the food and sell the food to those countries and keep the profits here. People will say, 'You can't take the land with you. If they buy land they cannot take the land with them.' No, you cannot. But you can take what you grow on the land. Then you can even go down the road of transfer pricing and avoiding the tax system. Ask Senator Heffernan about that.

We need to scrutinise. The real case we are facing, the real situation, is that by 2050 we are going to have more than nine billion people on this planet. The big issue is going to be food security. If you do not control your land, you do not control what you grow on that land and you lose control of your food supply. When we have to feed over 9.3 billion people—by 2050 is the estimation—food is going to be the big issue. We are seeing it now. Look at the price of cattle. Look at the price of land. Look at the price of mutton. They are magnificent, and finally bringing some good wealth to those hardworking people in rural Australia who deserve it. It is about time they had their turn. They deserve to get a fair go. It is good to see they are getting it now.

So that is why I support this legislation. I thank Senator Whish-Wilson and others in the Greens for getting behind it. I appreciate it very much, because I am of the firm belief that if we want to have a willy-nilly sell-off of our farmland then look at other countries. Look at developing countries; go to Thailand—you cannot buy more than 49 per cent of any business there. You would only be a minor shareholder. Go to America. Who owns the land? America is controlled by the states in most respects. Many states say that unless you are an American citizen you cannot buy land. Or go across to New Zealand. Five hectares? You want to buy more than five hectares? You have to go through their foreign investment review board.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Or less if it's by the sea or by a river.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Or less, as Senator Xenophon says, if it is prime land by a river or whatever. We are tightening our control and monitoring of who owns our land and who is buying our land. Some people seem to disagree with that. I encourage foreign investment if they want to go up the Top End, set up dams, clear country and develop it. I would be keen to ask Senator Wong this: how do you look at foreign investment in farms? Is it about clearing country? You are not allowed to clear country in New South Wales because in 1996 we had a bloke called Kimberley Maxwell Yeadon, a minister in the New South Wales parliament, who brought in SEPP 46 and then the Native Vegetation Conservation Act. Who worked for him in those days? It was Senator Wong, of course. So her history goes back with what she thinks of Australian farmers, especially in New South Wales: 'We'll curtail you from investing and growing your production, and, if you knock a tree down in the wrong spot, we'll fine you.' Thank goodness those changes are soon to be completed by the coalition government in New South Wales.

If you are talking investment, often it is about clearing country and putting it into pasture, just like the Americans did: as Senator Back told me the other day, the Americans cleared and established the whole Esperance area. Sadly there have been some terrible fires there recently and four lives were lost. But the Americans took scrub country and converted it to good wheat and mixed farming country—sheep and cattle country as well, and very productive. That is investment. We want all this investment. Then they will tell you that you are not allowed to touch the land. You might breach some environmental plan. It is quite ironic, isn't it, Chair? That is my input. I support investment where it grows jobs, grows exports, grows production, grows income and grows tax take in Canberra. When you simply sell a fully established farm at peak production that has been looked after by generations of farmers, in most cases, who know the land better than anyone—when you sell off that land and the profits are taken out of your country, how is that good for your local community? I fail to see that.

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

I have a couple of points and then another question to Senator Cormann. I think it is important to acknowledge that no-one in the government has ever, even in that contribution, articulated why we need a threshold so much lower for land and agribusiness than we do for other sectors in our economy. No-one has articulated the public policy rationale as to why we have to be so much more restrictive and have so much more red tape in relation to agribusiness. With Agribusiness you have set at a $55 million threshold, when sensitive sectors such as media, telecommunications, transport, defence, military related industries, uranium or plutonium extraction and the operation of nuclear facilities would be at $252 million. All of a sudden we are much more frightened and we want to spend much more red tape on investment in agribusiness than we do in those more sensitive sectors.

The second point is: again, no-one has explained why more red tape and barriers are a good thing for jobs. The third point is: even if people agree with some of what is being said, the government's approach does not make investment more difficult or more subject to red tape across the board; it only makes it more difficult for certain investors in certain activities. Investors from the US, New Zealand and Chile will continue to have the higher thresholds.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

They need to be reviewed as well.

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

That needs review too? Is that government policy—to renegotiate the USFTA?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

No; it's my opinion.

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

It is your view. Okay. Well, the reality is we have got this ludicrous situation where, if you are an investor from the US, New Zealand or Chile, you have a $1 billion threshold. Under your policy, you would have a $15 million threshold for the rest of the world, and the $50 million threshold—which is what Mark Vaile thought was appropriate—would continue to apply in relation to Singapore and Thailand. So we are talking about a smorgasbord of thresholds.

I noticed in Senator Whish-Wilson's contribution that, like Senator Williams, he was talking about transparency and so forth. People might recall in relation to the register—which I think was in the other legislation; I cannot recall in which bill it was—that we supported that. So we are not opposed to more transparency. We are opposed to an ad hoc set of politically driven thresholds which make no economic sense. I appreciate others in the chamber may have a different view. I note Senator Lazarus has a set of amendments. I appreciate he has got a particular position. But we do not think this set of ad hoc thresholds that the government is proposing make sense.

Leaving that aside, because it is the government's policy and the government's bill, I have a question on this. Senator Whish-Wilson, in his articulation as to why the Greens have done this deal, said that he wanted to see—and I am paraphrasing, so I apologise if I have got it incorrect—a FIRB trigger in relation to water holdings and that the government had not yet agreed to it but they were prepared to consider it. I would like to ask the government to respond to that and to tell the chamber what the status of that is. I will just repeat that for the minister. Senator Whish-Wilson, in his contribution, indicated that the Greens would be looking at a FIRB trigger on water holdings. That was the note I took. He is nodding his head, so I do not think I am misquoting him. Given that that is not contained in the letter, I would like to understand what the government's commitment is to the Australian Greens and what deal is associated with the deal that has been tabled.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I have actually answered that question previously. The way I answered this question was not by trying to speak for Senator Whish-Wilson. Senator Whish-Wilson, as the relevant spokesperson for the Australian Greens, is of course free to express his policy aspirations and the policy aspirations of his party. As far as the government's position is concerned, the government's position is clearly and transparently set out in the letter that was co-signed by the Treasurer, the Minister for Agriculture and Water Resources and the Leader of the Australian Greens. It commits the government to a process to engage in full public consultation in relation to the proposed introduction of a register of foreign ownership of water entitlements within 12 months. If the government were not to follow through on the commitment that we have made, then the sunset clause which is part of the Australian Greens amendments would come into effect, which in practice would mean that we would have to talk again about the substantive provisions in this bill that is currently before us.

The government in good faith has committed to the Greens as part of the agreement that we have reached to engage in this process, which will involve full public consultation. At the end of it, the intention is to come up with a proposal to set up a register of foreign ownership of water entitlements, which is put forward in the most efficient and effective way possible.

Senator Wong also in her remarks talked about the fact that nobody in the government has ever articulated the need to change the threshold. We have articulated that need—

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

In relation to agribusiness.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

In relation to agribusiness, of course. What we said in the lead-up to the last election—

Senator Wong interjecting—

There was nothing ad hoc about it at all. It was part of our coalition pre-election policy. On this side of government, we have got this old-fashioned view that, once you get into government, having taken a policy to the election, you should implement it. And that is of course what we are doing. We took an explicit policy to the last election. We made decisions on where the appropriate threshold would be and we are now seeking to legislate that commitment that we took to that election. We are very grateful to the Australian Greens for engaging with the government and working with us to find common ground to help facilitate the passage of this legislation.

What I would say is there was a time when Senator Wong suggested that the screening threshold for all assets, including agricultural assets, for Foreign Investment Review Board purposes should be $1 billion. You would be hard pressed to find any piece of agriculture land that would ever be reviewed by the Foreign Investment Review Board under that sort of proposition. Clearly, Senator Wong realised the error of her ways—or maybe it wasn't Senator Wong; maybe it was the Labor Party that imposed a change in position on Senator Wong—because now we hear that, rather than propose a $1 billion screening threshold for agricultural land for Foreign Investment Review Board purposes, according to Labor, it should be $50 million. Labor went from $1 billion to $50 million. We say $15 million, so you are actually much closer to our position now than your original position, which I might loosely describe as the original Wong position.

This is just a debate at the margins. Clearly, you recognised, along with the government and other senators in this chamber, that there is a particular sensitivity when it comes to agriculture land. The economics are quite different. The values involved are quite different to some other sectors in the economy, and what the government is seeking to do by lowering the screening thresholds in relation to agriculture land to $15 million is to give proper recognition to this. This is all part of our broader effort to ensure that there is strong public confidence in the integrity of the foreign investment framework, because we recognise the absolute importance of strong foreign investment flows to help us reach our full potential as an economy moving forward in the same way as foreign investment and foreign labour for that matter has helped us develop the economy successfully in decades gone by—indeed since well before Federation.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have a question for the minister. The FIRB referral process has been around for a while now around different asset classes and different countries through different trade deals. Can the minister provide any evidence to the Senate that the FIRB process and the so-called red tape or cost of these FIRB assessments have led to any disincentives for foreign investment in this country?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

No.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

In terms of the cost of this policy, is the minister aware of any cost-recovery processes that have been put in place? My understanding is that fees were dealt with in legislation a couple of weeks ago that would be levied on potential buyers to actually cover any additional costs to the administration of the scheme.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Obviously, there are relevant fees for applications that come before the Foreign Investment Review Board—and I think that they are on the public record, so I am not going to list them. There are different fees, depending on the value of the asset involved and various other criteria.

When it comes to the amendment,—which I suspect is what Senator Whish-Wilson is getting at—and the cost of managing what is envisaged by the amendment that he is proposing to move to set up a register of foreign ownership of water entitlements, as I have indicated in response to a similar question from Senator Wong, the government will pursue this in good faith following proper, full and public consultation. We will be pursuing it with a view to setting this register up at the lowest possible cost while being effective, so we will seek to do it in a way that is efficient and effective.

Obviously, we are not in a position right now to give you specific details on what that cost will be, because the consultation has not yet taken place. If the Senate were to pass this amendment, the government will engage in a process, and part of that process will help us identify the specific costs of this part of the arrangements into the future. Any related matter, I would suspect, would be considered in that context.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I will be very brief—just a message for the minister. The inquiry we have got at the moment on the Murray-Darling Basin is very concerning when you hear from the irrigators. Senator Madigan and Senator Whish-Wilson and others will be well aware—Senator Day as well—that the price of water has been forced up by corporate intervention and dealing, and people can't buy water to finish their crops—

Senator Madigan interjecting—

by the speculators, thank you, Senator Madigan. I believe even some superannuation funds—is that correct? Super funds buying water? It is crazy.

I just want to make a point to you, Minister Cormann, that when Senator Wong talks about buying and protecting land, don't forget Senator Wong's history of buying land. She has bought a lot of land in our country. She bought 90,000 hectares—Toorale Station for $23 million. I do not think she ever looked at it. I do not think the department ever looked at it. They bought it to run water down the Murray and then paid $700,000 to get the cattle off the property. The problem is that the ring tanks there to hold the water back have a heritage order on them. So, I think, Minister, as you go through this bill, you need not pay much attention to Senator Wong when it comes to the history of farming, the involvement of farmers and the purchase of agricultural land.

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

I am pleased that we are going personal in this debate—from a bloke who really is very good at it. I have a couple of points to make. I would remind the minister, who used to believe in open markets but apparently no longer does—he has been convinced by Senator Williams—that it was John Howard who had a billion dollar threshold. He had a billion dollar threshold for land under the US FTA and others, and the $50 million threshold in relation to Singapore and Thailand was clearly what the National Party's Mark Vaile thought was appropriate.

I have two questions which arose out of both Senator Williams and Senator Whish-Wilson's contributions. I may have misunderstood them, but I understand that Senator Williams was asserting that the US FTA, the New Zealand FTA and the Chile FTA ought to be reopened to lower the agricultural land threshold. I would ask: is that government policy? Does the government have any intention of doing so? Second, I again ask: is the government prepared to consider the Greens' proposition to create a FIRB trigger in relation to water holdings?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, I would like to thank Senator Wong for referring to John Howard, who of course is truly a giant of Australian politics and a giant of the Liberal Party—and his government had many great policies. But every now and then there is a policy that, on reflection, we believe can be improved upon. The way this process works is that, particularly when you are in opposition, you spend a lot of time talking to a lot of people, reassessing why it is that you lost and thinking through how you can do things better the next time round. Obviously this is one of the areas where we identified a need for improvement, and we took not only the need for improvement but also a very specific policy proposal to the Australian people at the last election—one which we now seek to legislate.

I can reassure Senator Wong that I continue to be a great believer in free and open markets. I think being an open trading economy, exposed to the competitive pressures in the world, has been absolutely good for Australia's economic and our economic success, and I continue to hold that view. But I am also realistic enough to know that it is very important for us to maintain strong public confidence in foreign investment, which is important to maximise our future economic success. As such, there are improvements that can be made and should be made and which are the subject of this legislation. Senator Wong asked me whether we are proposing to renegotiate various free trade agreements. No, we are not. Finally, what was your last question in relation to something to do with the Greens?

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

Considering a trigger in relation to water holdings.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I have already indicated that the only thing that we have agreed to at this point in time, as is reflected in the letter that has been referenced on a number of occasions, is a process to establish a register of foreign ownership of water entitlements within 12 months and to commence shortly a process of public consultation in order to develop an implementation approach and to also ensure that all of the relevant technical issues can be properly addressed.

The government is very confident that it will be successful in this. We will be engaging in this process in good faith. There is, of course, a sanction in the amendments foreshadowed by Senator Whish-Wilson, and that is that, if the government is unsuccessful in what it has undertaken to do, the sunset clause will essentially render this bill, which may or may not be passed by the Senate, void.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I have a couple of questions. Firstly, on the billion dollar threshold for the United States and other countries we have FTA's with—and I think as a result of the closer economic relationship with New Zealand and also with Chile, it is a billion dollar threshold—can the minister confirm either now or in the course of this debate that the same rules that apply for investment from, say, the United States into our prime agricultural land applies if an Australian company wants to invest in the US? My understanding is that it does not and that there are further barriers in the US as opposed to the lack of barriers that apply here—because a billion dollars could buy big swathes of the Riverland; I dare say it could by a significant proportion of the Riverland, given that billion dollar threshold—and that that would also apply to other countries that that billion dollar threshold relates to.

Secondly, with the proposed reduced of the threshold to $15 million—and I believe that is a step in the right direction but it should go further—given the FIRB has in the order of 30 to 35 staff in addition to its board, I wonder whether there will be additional resources for the FIRB with respect to the anticipated additional transactions. From an annual report of the FIRB of two or three years ago, there were about 13½ thousand transactions that they had to look at or that came within their purview. So will there be additional resources for the FIRB?

Finally, I have been speaking to a number of my colleagues about having a Senate inquiry into the port of Darwin deal. I note some encouraging comments by the Treasurer in terms of the need to look at these issues. Is the government currently reviewing the rules in the legislation that appear to exempt assets that are owned by state and territory governments, particularly strategic assets such as ports and other key infrastructure?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, in relation to the questions about how the Australia-US free trade agreement works in the other direction, I think that well and truly takes us beyond the scope of this bill. In an abundance of helpfulness, I will seek to obtain the information, but I might have to provide that information outside the context of this debate.

As I have already indicated in answer to a question by Senator Wong, the government is not intending and does not propose to reopen any of the existing free trade agreements that we have with various countries around the world. The specific factual question that he is asking me there—about the matter relating to the trade relationship between Australia and the US—I will have to refer to Minister Robb. But it is, of course, not relevant to the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 that we are dealing with here.

Will there be additional resources? Yes, there will be. This is all reported in the budget, so it is public information. This is not new information. It is openly and transparently out in the public domain. The government has allocated 10 to 15 additional staffing positions to Treasury for this purpose and about 50 to 60 additional staffing positions to the Australian Taxation Office in order to manage these arrangements.

In relation to the other matters that he has raised, these are matters, obviously, for the Treasurer to consider and to make comment on if that is warranted. It is not, again, directly relevant to this legislation and I am not proposing to go there today.

John Madigan (Victoria, Independent) Share this | Link to this | Hansard source

Minister, is the government aware of how much good cropping grazing country in the Western District of Victoria you can purchase for $15 million? You can pick up 5,000 acres of some of our prime grazing country in the Western District of Victoria. Not to mention that 5,000 acres at $3,000 an acre is $15 million. That is a huge swathe of our prime agricultural land. Not to mention what you can buy around Ballarat—prime volcanic soil with high rainfall. At 2007 prices, $10,000 an acre, it is 1,500 acres. Then, if you go to Gunbower in Victoria you can pick up 12½ thousand acres at $1,200 an acre, which gives you $15 million. Is the minister aware of how much of Australia's best agricultural land can be purchased for $15 million?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Madigan for that question. Yes, the government is aware and, yes, I am aware. I might remind Senator Madigan and the Senate that the current threshold is $252 million. Labor initially thought that we should lift that threshold. Not reduce it but lift it from $252 million to $1 billion. Labor has now changed its mind to say that it should be brought down to $50 million. We think it should be brought down to $15 million. We think we have the balance right in relation to the line in the sand that we have drawn. It is based on extensive consultation, in particular in the lead-up to the last election.

I might add here that this $15 million threshold is a cumulative threshold, so if one foreign purchaser sought to purchase several lots of land it all adds up and if it reaches the $15 million screening threshold it would trigger Foreign Investment Review Board consideration under the terms of this legislation. Some people in the Senate are saying that we have taken the threshold too low and other people are saying that we are leaving it too high. We think that we have the balance right.

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

I had a question, but I will first start by clarifying the minister's previous previous answer—I think it was three answers ago now. The nature of the commitment in the penultimate paragraph of the letter is that the government commits to undertake a review of the treatment of water under the foreign investment review framework. Does that leave open the possibility of separate FIRB thresholds for water holdings?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As I have previously said, this letter is extraordinarily well written and it means what it says. It says here, as you have just read out that once the proposed register has been implemented—assuming that we can get to that point successfully after public consultation to enable the establishment of this register within 12 months—and data is available then the government commits to have a review on the level of foreign ownership of water entitlements, I guess to consider the data that is identified through that process to see whether there are any other further actions that should be taken. We are not pre-empting any further action. We are not suggesting that there will be further action. We have not agreed with the Greens that there would be further action.

All we have agreed to is that assuming that we successfully get to the point that we are intending to get to, of having this register in place within 12 months, then what we are committing to do is to have a look at the data to see whether it means that we should be making any appropriate public policy decisions to use that data in an appropriate way.

You have been around long enough, Senator Wong: you know that that does not mean that we are pre-empting a decision and that there is a whole range of steps first. There is public consultation to deal with the implementation and any technical issues. And if we get to that point then we can cross the next bridge, and that is to start collecting relevant data. Once we have collected relevant data for a period I would have thought it stands to reason that you would consider that data, which is what we have committed to do, to see whether any further responses should be pursued.

At this stage, I cannot foresee what I do not know. I do not know what the data will show. I do not know where we will be at the successful conclusion of this process, after relevant data has been collected for a while. So let us cross that bridge when we get there is what I would say to Senator Wong.

Let me make this final point again: this whole debate has now come down to a disagreement about not whether we should keep the current threshold of $252 million, not whether we should increase it to $1 billion—as Senator Wong has previously argued—but whether it should be reduced from $252 million to $50 million, or $15 million or even lower. Now, what we would suggest to the Labor Party and to the Senate as a whole is that we have very carefully considered this. We took a particular commitment to the Australian people at the last election and we would respectfully ask the Senate to let us implement our policy.

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

I think we all remember a number of the commitments the government took to the last election including no cuts to health, no cuts to education, no changes to the GST. Does everyone remember that? And what did we get. We got a range of cuts to health, a range of cuts to education and changes to the GST. And of course we all remember the 12 submarines to be built in Adelaide. So forgive us, Minister, if we take with a grain of salt your justification for this policy that it was an election commitment because it appears that there are some election commitments which are sacrosanct and there are some which are easily broken. The ones which are sacrosanct are the ones it appears you do with Senator Whish-Williams and the National Party but the ones that are broken are the ones the Australian people might actually care about, like making sure that their schools and hospitals were not cut and that they did not have to pay more for their food and for other items of necessity.

Leaving that aside, the minister said in his answer that Senator Wong has been around long enough to understand what these words mean. I know a fudge or, as one might save more acerbically, I know weasel words when I hear them and read them as well. The difficulty we have is that this letter is written to leave open a lot more changes to the foreign investment framework when it comes to the treatment of water. That is how it is written. We have Senator Whish-Wilson—and I do not criticise him for this—is clear about his position. I do not agree with it but he is clear about it. He wants a lot more regulation and a lot more red tape in relation to investment in water and agriculture. He made very clear that his view is that the government has agreed to consider FIRB thresholds for water holdings.

So, Minister, leave aside the fudging and the weasel words; I just want to understand whether the government has agreed with Greens to leave on the table a FIRB trigger for water entitlements. Is that what has been agreed? Is that the subject of this agreement or not?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

We can keep going around and around in circles. The agreement is as stated in the letter that I have openly and transparently tabled in the chamber. This letter envisages a process which, within 12 months, would seek to establish a register of foreign ownership of water entitlements. There would be a process of public consultation to make sure that that is done in the right way and in the best way. If we are unsuccessful, what will happen is that the sunset clause envisaged in Senator Whish-Wilson's amendment will come into effect and the legislation will lapse. If we are successful, certain data will be collected and at some point down the track—you do not collect data in order to not even look at it.

What the government is committed to do, once we have collected data through this register, is that we will undertake a review of the treatment of water under the Foreign Investment Review Board framework, given the data that is available to us at that point. It does not pre-empt any finding; it does not pre-empt any decision. In fact, we cannot make judgments on the basis of information that we currently do not have and things we currently do not know. I see Senator Whish-Wilson nodding. I would not be surprised if even Senator Whish-Wilson, who might have some instinct and some aspirations, would say, 'Let's wait for the evidence before we get to the next step.'

I understand the political point that Senator Wong is seeking to make. I saw the gratuitous commentary in relation to policy election commitments. We all remember the infamous line, 'There will be no carbon tax under a government I lead,' and we know what happened after that. Let me just say for the record again that we of course made commitments in relation to funding for health and education to keep a funding envelope in place that was the funding envelope in the period of the forward estimates at the time of the last election. We have done that in health and in education. In fact, during the election campaign, we were being attacked by Labor because we would not commit to Gonski beyond the initial four-year period. Because we stuck to that commitment of not committing to Gonski beyond the original four-year period, we are now being attacked for cutting against some illusory, pie-in-the-sky promise that Labor made on the never-never, mostly in the period beyond the published forward estimates, but I get distracted.

I could also talk about the fact when it comes to the GST Labor is clearly obsessed. They have come to a view about what necessarily will happen. Let me just say that what the government is doing is precisely what we said we would do in the lead-up to the last election. We said before the last election that we would scrub the mining tax and the carbon tax and we have. We said before the last election we would reduce taxes for small business and we have. We said we would initiate a tax reform discussion and consultation process about how the Australian tax system could be further improved and how we can make it more growth friendly into the future to ensure Australia is the most successful we possibly can be, to ensure it is simpler, fairer and more efficient. That process is currently underway. We have not reached a landing point in relation to this.

We did say that there would not be any change to the base of the GST in this first term of a coalition government, that we would engage though in an extensive consultation with the Australian people on how the tax system could be improved and any proposals to improve the tax system would be taken to another election before being implemented so that the Australian people could pass judgment on it. I put our record when it comes to fulfilling election commitments against Labor's 'There will be no carbon tax under a government I lead' any day. But of course Senator Wong has tempted me here to go well beyond what is in front of us and what is in front of us is the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015. I think I have clearly articulated the government's position.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

For the last 35 seconds, perhaps I could put Senator Wong's mind at ease on this issue. We got a commitment from the government about setting up a register of foreign holdings in water licences. We got a commitment in the legislation for a sunset clause, which the minister has already talked about. There was no commitment on FIRB triggers or on water thresholds on that register. Otherwise we would have asked for a commitment in the legislation but we did not. There was no commitment, but it is something we would like to see in the future.

Sitting suspended from 18:30 to 19:30

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the bill stand as printed.

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

There were a few questions before the break. Could I clarify with the minister: in terms of the letter outlining the deal with the Australian Greens on this policy area—he described my asking him about costs as a 'trick question'; I do not know if it is a trick question to ask the finance minister how much something will cost—can he give us any further information on that? And, more particularly, who is responsible for conducting the review that is referred to in the penultimate paragraph, and who is in charge of designing the register and the process, as described, 'for developing an implementation approach'?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The reason I referred to it as a trick question was because Senator Wong was asking me to provide a costing for a proposal that had not yet been developed and that was to be subject to full public consultation. In relation to implementation arrangements and the relevant technical details, all of these matters are fundamental to costing and are being conducted at the appropriate time. What I also said to Senator Wong and what I indicated to the Senate is that, consistent with usual practice, the government would seek to implement this proposal in the most efficient and most effective way possible—that is, at the lowest possible cost to achieve the objectives as outlined in the letter.

In terms of who is responsible for this, this is going to be a joint effort between Treasury and the Department of Agriculture and Water Resources. Essentially, it is going to be a joint effort between the Treasurer and the Minister for Agriculture and Water Resources with the support of their relevant departments, who will conduct the consultation and ultimately the development of the register of foreign ownership of water entitlements within 12 months.

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

Is the government committed to undertaking a full RIS—regulation impact statement—in relation to this proposal?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government will go through all of the usual and established processes.

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

In relation to the $15 million—can you tell me where you plucked that figure from? You have gone from $50 million down to $15 million. Exactly where has that figure come from? What made you decide that that is the figure that we are going to sit on?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Lambie for that question. As I indicated during the debate earlier in the proceedings, this $15 million threshold is the proposal that we took to the last election, which was based on extensive consultation with relevant stakeholders. The current threshold is $252 million, so the current screening threshold in terms of agricultural land in the context of Foreign Investment Review Board considerations is $252 million. At various times Senator Wong has argued that it should be lifted across the board to $1 billion.

Labor is proposing a $50 million threshold; we are proposing the $15 million threshold that we took to the last election. Some other senators are proposing an even lower threshold. I think Senator Xenophon is proposing a $5 million threshold and Senator Lazarus is proposing a zero dollar threshold, which would mean that every acquisition of a piece of agricultural land would have to be put to an assessment by the Foreign Investment Review Board.

In the end it is a judgement call. In the end it is up to the Senate to decide whether the Senate supports the recommendation made by the government or whether it supports the recommendations made by either the Labor Party, the Greens or one of the Independent senators. From the government's point of view we believe that we have got the line in the sand right, and that is the recommendation we are putting to the Senate.

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

You have come up with $15 million and you still cannot give me a clear answer on exactly where you have plucked that from. You have just decided to pluck that and run that with everybody else. Forgive me if I am wrong, but you have done no modelling on the negative or positive impact of that $15 million, so can you answer: have you actually considered having this from zero—so any foreign investment into prime agricultural land should be looked at, no matter what the price is? Have you considered that at all, or did you just want to sit on the $15 million that you plucked from thin air?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Obviously, I do not agree with the characterisation that we plucked this figure from thin air. As I indicated to Senator Lambie and to the Senate, we have determined this $15 million proposed screening threshold as a result of the public consultation that we undertook when we were putting our pre-election policy commitments together. This was a figure that we openly and transparently put to the Australian people at the last election. We do not think it would be in the national interest to implement a screening threshold of zero dollars, which would in effect mean that every single transaction involving a foreign purchase and involving agricultural land would have to be screened by the Foreign Investment Review Board. We think that that would clearly not be a good use of taxpayers' resources, and it would not be good in terms of our approach as a country to foreign investment into Australia.

As I have indicated earlier, we do believe that foreign investment is important. We believe that the current threshold of $252 million is too high; we think it needs to be lower, so our proposal and our recommendation to the Senate is that $15 million is the appropriate threshold. As I indicated in answer to a previous question, it is a cumulative threshold. So any foreign purchaser who seeks to purchase agricultural land in Australia, once they reach the value of $15 million would trigger the Foreign Investment Review Board process.

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

So you have done no modelling on a zero threshold; that is what I am asking you. You are just going on what you plucked out of the air at $15 million and said, 'That's it; that's what we're running with' and you have done nothing else. That is the figure you plucked out; you have looked at no other figure than the $15 million. This is where we are at today—we just pluck things out of the air in here now. What about the national interest? What about our prime agricultural land? Where is the modelling on the zero? That is what I am asking you.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Well, I thought I put it as eloquently as I could. This $15 million figure is a figure that we identified in the course of our policy development process in opposition. It is the result of extensive consultation with relevant communities across rural and regional Australia. We do not believe that a zero-dollar figure is appropriate. It is not something that we have modelled because it is not something that we would entertain. In the end, it is a judgement call. Every individual senator, of course, is entitled to form their own judgement and vote accordingly. Our recommendation to the Senate is that the appropriate threshold is $15 million. There are alternative proposals in front of the Senate. Of course, if Senator Lambie is of the view that it should be zero dollars, there is an amendment circulated by Senator Lazarus that would give effect to her preferred proposition. The government do not think that it is in the national interest for us to go down that path.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

I rise to move an amendment, I think.

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

You can move an amendment.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

I can do that. I rise to move the amendment on sheet 7792 revised.

The TEMPORARY CHAIRMAN: Is that amendment (1) on 7792?

Amendment (2) on 7792 revised.

The TEMPORARY CHAIRMAN: Down the bottom, okay. Amendment (2)?

Yes, revised amendment.

The TEMPORARY CHAIRMAN: Is it (1) or (2)?

Amendment (2).

The TEMPORARY CHAIRMAN: About the review?

Yes, the review. It has been added in.

Senator Cormann interjecting—

The TEMPORARY CHAIRMAN: Sorry, Senator Lazarus. Senator Wong, if you can assist.

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

If I could assist. Senator Lazarus, the amendments are separate. I understand this is the way the clerks have suggested that they be moved. On the running sheet, there is your amendment (1) to schedule 1, item 4; then there is your amendment (2), which is the review. The first is the agricultural land threshold and the second is the review. I am open to it, but it might be easier for you to move them both with leave, subject to the chair. We do not have a concern, but we would like to know which one is before the chamber.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

by leave—I, and also on behalf of Senators Lambie and Madigan, move:

(1) Schedule 1, item 4, page 44 (lines 10 to 21), omit subsection 52(2), substitute:

Agricultural land

(2) The threshold test is met in relation to land if the land is agricultural land.

(2) Schedule 1, page 111 (after line 16), at the end of the Schedule, add:

5 Review of when the threshold test is met for agricultural land

(1) The Minister must cause an independent review of the operation of subsection 52(2) of the Foreign Acquisitions and Takeovers Act 1975, as amended by this Schedule, to be undertaken and completed within 2 years after the commencement of this item.

(2) The person who undertakes the review must give the Minister a written report of the review.

(3) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sittings days of receiving it.

The people of Australia want the sell-off of Australia to stop. So I stand here today to speak on behalf of all Australians who so desperately want real and strong leadership from their elected representatives to make the changes necessary to stop the sell-off of Australia.

I believe my amendment belongs to the people of Australia and it delivers what the people of Australia want. Australians have had enough. They have had a gut full of governments lining their own pockets and selling off our country to the Chinese and other overseas investors for short-term gain, just to make a quick buck at the expense of our country's long-term future. I am not singling out any one government; all governments on all sides at all levels are guilty of doing this. The people of Australia have had enough of having to deal with the increasing cost of living, price hikes in the cost of electricity, tax increases, increases in the cost of health care, cuts to pensions, cuts to family tax benefits and so the list goes on, while governments pander to the big end of town and sell-off to the Chinese the rights to our ports, allow the sale of our land, businesses and assets to foreign companies and allow foreign owned CSG mining companies to simply walk onto people's properties and farms and destroy their lives. The people of Australia have simply had enough.

At what point will governments actually stop, look around at what is happening to this country and how the people of Australia are really feeling and take a stand for the people of Australia and our country as a nation? At what point in time will governments realise that if we do not stop selling off our own country to the Chinese and the rest of the world, we are not going to have a country to govern and call our own in the future? I believe this time is now and everyone in this chamber can join me in supporting the people of Australia by stopping the sell-off of Australia.

While I applaud the government for seeking to put in place improved mechanisms to assess the sale of Australian land to overseas investors, the people of Australia simply want more. The people want the sell-off of Australia to stop. This is why I have drafted this amendment, so we as a country can start to take control of who buys our land and how much we allow them to buy, and what we allow them to do with it. Currently, we have no idea how much of our land is owned by the Chinese or any other country or foreign owned corporation. The fact that current and past governments on all sides of politics have allowed this to happen is an absolute disgrace.

While the current government is now seeking to install a register of foreign ownership of Australian agricultural land, which I fully support, until our country gets the register up and running and fully understands how much of our land is actually foreign owned, I believe we should not be allowing any further prime agricultural land to be sold off to international investors without reviewing every single transaction to determine whether or not it is in our national interest to sell-off the land. This is what my amendment does. It puts in place protections to ensure every piece of agricultural land in this country sold off to overseas investors is subject to review before the sale is allowed to be completed.

We as a nation have to start putting Australia first. We have to start looking at where we are heading. As an Australian, I am angry that so much of our land is being sold off to the Chinese and to other countries. Our poor farmers are suffering as a result of drought, difficult business conditions and global challenges. In my home state of Queensland, 80 per cent of the state is in drought. Our farmers are being picked off one by one by foreign buyers who are circling our farms and eyeing off the agricultural opportunities that our great land offers. Currently, in my home state of Queensland, there are busloads of Chinese investors being carted around from farm to farm in rural and regional areas to look at and buy our farms.

So much of the world is overcrowded. In fact, overcrowding has become such a problem that many countries do not have enough land to grow produce to feed their own people. Australia has an abundance of land—land which we should be cultivating to generate produce to become the food bowl of the world. We should be selling our produce to the world, not selling off our land.

What happens when another country—let's say a Chinese business backed by the People's Republic of China—buys our agricultural land? I will tell you what happens. Firstly, that part of Australia is no longer owned by Australia; it is owned by the Chinese. Secondly, any produce grown on the land is no longer available to the people of Australia. Thirdly, the country that buys the land—in this instance, the Chinese—brings in its own people to farm and manage the land and any produce grown on it. Fourthly, the produce is then shipped directly out of the country and over to China. Australia not only loses the opportunity to sell produce to the Chinese but loses jobs, revenue, taxes and access to our own land. We lose out altogether. If this does not register alarm bells then I do not know what will.

I am in touch with what is happening in rural and regional Queensland because I am out and about visiting towns and talking with people on the land. Last week I visited a few areas in North Queensland, and everyone is concerned about jobs and the high unemployment which Queensland is experiencing. Meat-processing plants located in rural and regional Queensland which employ hundreds of people and are important sources of local employment are having to close down early because they cannot get enough beef to process. Because our farms and our beef are being bought up by foreigners and being shipped overseas, we are losing the opportunity to process these products here in Australia, and so we are losing jobs and overseas export opportunities as a direct result. In Queensland, our meat-processing plants are slowly closing down one by one.

What does this do to rural and regional Queensland? It decimates our communities and our people. What does this do to Australia more broadly? It means we cannot even process and produce our own meat products. Instead we will have to import processed meat products from overseas at a premium and we will be reliant on the rest of the world to eat. What is worse is that the meat actually originated in Australia, and in the future we will have to import it back into our own country in the form of processed meat products at a high cost because the products are being processed overseas.

I am an old footballer and I have had my fair share of knocks around the head. In fact, my wife made me go to the gym during the dinner break. I am all over the place, but even I know that the path we are on is a very dangerous, damaging and stupid one. As I said, the people of Australia have had enough. They want the sell-off to stop. Everywhere I go in the state of Queensland, this is the first issue that comes up every time. This is concerning the people of Queensland no end. As I said, the people of Australia have had enough and they want the sell-off to stop.

Today we have a real opportunity to start changing things here in this country and to start standing up for our nation and for our people. My amendment puts in place a requirement for all purchases of Australian agricultural land by overseas investors to be assessed against our country's national interest. As part of this amendment, I also call on the government to increase funding and resources to the Foreign Investment Review Board to enable the expeditious processing of all sales of Australian agricultural land. My amendment also includes a review obligation which will require the government to review foreign investment sale arrangements in two years to determine their success.

I have received some objection to my amendment. It has been suggested that the requirement for all sales of agricultural land to foreign buyers will discourage foreign investment or place too much workload on the Foreign Investment Review Board. This is a load of rubbish. My response to this is simple. My amendment does not stop the sale of agricultural land to foreign investors. Rather, what it does do is ensure that Australia will now have control over what agricultural land we sell, how much, to whom and for what purpose. In this age, the age of computers and high-tech systems where we process every person who enters the country and process every property sale, we can easily assess every sale of agricultural land to a foreign buyer against our national interest.

Yes, we do have the resources to assess every purchase, and so we should. We are talking about the national interest of our country and the security of our country, the country that our diggers have fought and died for and continue to fight for. The term 'national interest' can mean many things. but at the end of the day it means something very simple to me and the people of Australia: it means that the Australian government will act in a way that ensures the safety, security, health, prosperity and wellbeing of our people in the long term.

I should add that, while this amendment will require the review of all sales of agricultural land to foreign buyers against our national interest, free trade agreements such as ChAFTA will overrule this and give the Chinese the scope to buy up our land to the value of $15 million without any review or assessment against our national interest. My only hope is that future governments will fix this mistake.

As I have said, this amendment belongs to the people of Australia, and we as the representatives of the people should ensure that we put our country first. Minister Cormann said the $15 million figure was a judgement call. I think your judgement was way off. No-one else in the world is going to look after Australia as we will. I thank Senator Lambie and Senator Madigan for cosponsoring this with me, and I commend this amendment to the Senate.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, on behalf of all governments of Australia, current and past, let me reject this assertion that governments have been lining their pockets, as Senator Lazarus was suggesting, in the process of selling off agricultural land to various foreign interests. That is not a very serious proposition, and it is one that I have to reject on the record. I would also say that all governments of both political persuasions in Australia, whether they are coalition governments or were Labor governments in the past, are motivated by putting Australia first. We might have a different perspective on how you put Australia first, but let me just say that, if you look at our history as a nation, given that we are a large continent with a small population, attracting foreign investment and attracting foreign labour have been an integral and central part of our economic success in the past and will be a central part of our economic success in the future.

Yes, the government agrees with the proposition that, when it comes to agricultural land, the current screening threshold of $252 million is too high, but to go down to zero is not serious. To suggest that the Foreign Investment Review Board should review every single transaction in relation to every single parcel of agricultural land is just not practical and it is not sensible, because, in the end, it would make us a very unattractive destination for foreign investment, and that is not something that this government would want to be part of. We have made a judgement call based on extensive consultations across rural and regional Australia, and we are recommending to the Senate that we adopt a new screening threshold of $15 million. You, Senator Lazarus, along with Senators Madigan and Lambie, suggest it should be zero. Senator Xenophon suggests it should be $5 million. The Labor Party suggests it should be $50 million. We are not the highest; we are not the lowest; we are sort of middle of the road. We think that the government have the balance right. We agree it ought to be lowered from where it is. We think that $15 million is a sensible threshold, and that is why we oppose amendment (1).

For the record, let me also say that we will not be supporting amendment (2), in relation to the review. Obviously the government as a matter of course will continue to monitor the adequacy of thresholds and asset classes, but it should be considered by the Foreign Investment Review Board. In the end, these will always be judgement calls, and in the circumstances we think it is more efficient for this to be monitored as a matter of course rather than to legislate a separate and special review.

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

On the amendments that are before the chair only, can I indicate—unsurprisingly, as I have indicated to Senator Lazarus and Senator Lambie; I do not think I have had an opportunity to speak to Senator Madigan—that, given our policy position, we are not in a position to support amendment (1). We would ask that the question be divided, though, because we are inclined to support amendment (2) on sheet 7792. Obviously we might have a different view about what that review should do, but in principle an independent review, particularly given how many anomalies there are in the current framework, we think has some merit.

I would make the point that the minister's assertions about why he does not want this review are inconsistent with the assertions he made about why the Greens review in relation to the water entitlements was a good idea. I am a little confused as to why the government thinks this review is such a bad thing but the review that Senator Whish-Wilson and Senator Di Natale have got a deal on is such a good thing. But, leaving that aside, that is the opposition's position.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

In view of Senator Wong's proposal to split the amendments, I propose that we will and will vote on them separately.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would just like to say that, whereas I agree with much of the sentiment expressed tonight by Senator Lazarus, the Greens' longstanding policy has been a threshold of $5 million. That was arrived at by extensive consultation with stakeholders. Basically, to put it in a nutshell, we felt that agricultural acquisitions underneath that size would more likely be hobby farms and not necessarily substantial production, and that is the number that we arrived at. As I mentioned earlier, we will be supporting Senator Xenophon's amendment. We will not be supporting Senator Lazarus's amendment.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

I just have to say that $15 million buys a lot of land. If you triple that—so, every time you buy something, $15 million, $15 million and $15 million—you can end up with a lot of land. Senator Cormann spoke about practicality. I think it would be fairly practical that we know exactly who is buying our land and who owns it. The tax office does not even know the names of some of the people who own land in this country. Surely that is not in the best interests of this country.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Just to clarify something for Senator Lazarus: the government will know who owns land because all foreign investments in agriculture will be recorded, but they will not trigger a Foreign Investment Review Board process unless the cumulative purchases for one purchaser exceed $15 million. So the proposition that somehow you can have $15 million multiple times is not right. It is cumulative. It does add up. And the proposition that we will not know who owns the land is not right either, because the Agricultural Land Register will record all foreign investments in agriculture from zero dollars.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

I agree with most of that, but what I am suggesting is that, if a foreign investor comes over here and wants to buy property worth $14,900,000, the country does not have to review that against the Australian interest. I just hope we know what we are doing here.

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

I just want to know: is the register retrospective? Is everything going to go on that from the past as well so it is all going to be transparent?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Everything will go onto the register, yes. All foreign investments in agricultural land will be on the Agricultural Land Register.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I would like some clarification in relation to Senator Lambie's very good question. Is it prospective or retrospective? I understand that it applies to any further transactions, but if it applies to all foreign ownership, presumably it will be quite an exercise to determine who will be on that register. How will that be determined?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That is exactly what I have just said, and that is exactly the case. There will be a stocktake initially. I will just say it again. The Agricultural Land Register will record all foreign investments in agricultural land from zero dollars onwards, and there will be a $15 million cumulative threshold, if this legislation is passed by the Senate, which would apply for the purposes of Foreign Investment Review Board screening. We do not think it is sensible to apply the screening threshold from zero dollars onwards. It would capture a whole range of very small transactions and would swamp the Foreign Investment Review Board with a whole range of transactions that would never trigger the question of whether or not something is or is not contrary to the national interest. So the government is of the view that we have the balance right in determining $15 million as the appropriate threshold, and that is what we are commending to the Senate.

Glenn Lazarus (Queensland, Independent) Share this | Link to this | Hansard source

I realise that when we talk about multiple purchases we may not see that all that often with individuals. But what about multicorporations, where they can put things in different business names? We see a pattern where a corporation is buying multiple properties worth just under $15 million. Is there a process in place where we can review that against Australia's interests?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

What Senator Lazarus is referring to are associated corporations, and I can confirm that there is a process in this legislation that would capture any sort of associated corporations for the purposes of determining the $15 million cumulative screening threshold.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

This is relevant to the amendment, and I would like to put on the record that I do not support the first part of the amendment. I think the $5 million threshold is a reasonable threshold. The reason I say that is—and I am not sure if any of the advisers' hair is grey enough to have a corporate memory going back to the 1960s and 1970s. I doubt it, I think—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

There are some grey people there, though.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

No, the grey hair in the advisers box.

Senator Wong interjecting—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Penny and I are going grey.

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

But I am older than him.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Only just!

The TEMPORARY CHAIRMAN: I cannot stop the love in the air. It is just a nice change!

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Is my understanding that up until about 1970s—about 1973, 1974—the threshold was $1 million. And the rationale behind a $5 million threshold now is that it is in the order of about $5 million if you allow for inflation. It works out to be about a factor of four or five. The rationale has served us well to have that $1 million threshold for many years, but I do think it is very worthwhile to have a review of the section, and I commend my crossbench colleagues for putting up that amendment. I will be supporting the second part of that amendment and I think it will get up, which is going to be very useful.

The minister says there will be a stocktake. I appreciate that. That is very welcome. I think Senator Lazarus, Senator Lambie and many of us welcome that stocktake. Firstly, approximately how long do you think that stocktake will take? Secondly, will the result of that stocktake be in a form that is easily accessible to members of the public, such as published online? Thirdly, how do you determine what is in a stocktake if a foreign company has a minority shareholding in a multimillion dollar, large agribusiness enterprise? Does that have to be registered, or is it only for majority shareholdings of a foreign company that it ends up in the register?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, the Australian Tax Office actually commenced the stocktake of foreign ownership in agricultural land on 1 July 2015, and our expectation is that we would start to have aggregate data available early in the new year, 2016. Obviously, progressively, we will be able to work our way through that in some more detail.

Just because you have a shareholding—a minority shareholding as you put it—in another company, that does not make you an associated company. There is a range of elements. Majority shareholding would be an indication, and control through relevant directorships is a relevant indication. But there is the usual definition of 'associated companies' that captures this for the purposes of the cumulative $15 million screening test.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendment (1) on sheet 7792, moved by senators Lazarus, Lambie and Madigan be agreed to.

The TEMPORARY CHAIRMAN ( 20:13 ): The question before the chair is that amendment (2) on sheet 7792, moved by Senators Lazarus, Lambie and Madigan be agreed to.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the bill stand as printed. Senator Xenophon.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Tricky, Chair. Let Hansard record that you clicked your fingers in disappointment! I move amendment (1) on sheet 7782 revised:

(1) Schedule 1, item 4, page 44 (lines 15 and 16), omit "the total value of the following is more than the value prescribed for the purposes of this paragraph", substitute "the total value of the following is more than $5 million".

Essentially this amendment relates to the threshold test for agricultural land. It was traversed earlier. Essentially this says that the threshold ought to be $5 million, not $50 million. As I indicated earlier, in relation to Senator Lazarus, Senator Madigan and Senator Lambie's amendment, back in the 1960s and 1970s the threshold was, as I understand it, in the order of $1 million. It then jumped up exponentially, and going to a $5 million threshold is like the threshold that was in place in the 1960s and 1970s, where there was still foreign investment but it was a much more stringent threshold, particularly for agricultural land.

So this amendment seeks to reduce the threshold to $5 million. It is a policy position I have had for a number of years. It is one that I know the Australian Greens have had. In fact, then-Senator Milne and I introduced legislation a number of years ago, a private senators' bill, that put up this very proposal of a $5 million threshold, which strikes that balance in having investment without the need for regulatory approval. That threshold of $5 million seems to be much more realistic, although I do have some real sympathy for the amendment that my colleagues just put up. So this amendment takes the threshold from $15 million down to $5 million. It is consistent with previous legislation I have introduced.

By way of contrast, in New Zealand any purchase of agricultural land where the size of the land is five hectares or greater is subject to review by their Overseas Investment Office. I think that the New Zealanders can teach us a thing or two about having a sensible foreign investment framework. As much as it hurts me to say it, I think the Kiwis have got it right, not just in their thresholds overall but in having a much more comprehensive test that spells out what the national interest is. Indeed, it is a zero threshold if the land is by the sea or on a river. That is in another category altogether.

That is what this amendment is about. I will be seeking to divide on it, for the simple reason that I think it is an important principle, and as I respected the right of my colleagues to divide on the previous amendment. Five million dollars is in keeping with what New Zealand is doing, and we ought to adopt it as a threshold here. Fifteen million dollars is still on the high side.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

For the reasons previously outlined during the debate, the government opposes this amendment. We think that the $15 million proposed screening threshold for FIRB purposes is the appropriate threshold for agricultural land.

In relation to the other amendments, which Senator Xenophon has not moved yet but appeared to be speaking to, in relation to enshrining national interest in legislation, the government also opposes inserting the national interest criteria within the legislation. National interest is already set within policy and does not need to be embedded within the legislation. Legislating the national interest test may weaken the foreign investment regime. Currently the Treasurer may take into account any factor he deems relevant to whether an application is in the national interest.

The foreign investment framework strikes an appropriate balance between maintaining community confidence in foreign investment by protecting the national interest and ensuring that Australia remains an attractive destination for foreign investment by providing certainty for investors. Consistent with this objective, the government reviews foreign investment proposals on a case-by-case basis, to ensure they are not contrary to the national interest. The case-by-case approach is a fundamental part of the foreign investment framework here in Australia, because the national interest can change over time.

A codified national interest test with a rigid set of criteria would be inflexible, prescriptive and require ongoing revisions or additions. Further, it might expose the government to the possibility of judicial review of foreign investment decisions as well as provide an additional avenue for opponents of an investment to challenge it and hence undermine investor certainty.

In practice, the government typically considers a range of factors when assessing foreign investment proposals, including national security, competition, taxation, impact on the economy and the community and the character of the investor. These are outlined in the policy to provide sufficient guidance to applicants but sufficient flexibility to protect the national interest. A relevant updated policy document will be released prior to 9 December, to reflect the reform package.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Very quickly I want to once again put on record that the Greens will be supporting this amendment. We have had a longstanding policy of a $5 million threshold for referral to FIRB, and we will be voting for Senator Xenophon's amendment on that basis.

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

I understand we are currently dealing only with amendment (1) on Senator Xenophon's sheet—

The TEMPORARY CHAIRMAN: We are.

so I will restrict my remarks to that amendment. For the reasons I have previously outlined and our articulated policy position, we are not in a position to support Senator Xenophon's amendment.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendment (1) on sheet 7782 moved by Senator Xenophon be agreed to.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

by leave, I move amendments (2) and (4) on sheet 7782 revised.

(2) Schedule 1, item 4, page 54 (after line 16), after subsection 67(1), insert:

  (1A) If:

  (a) the significant action is to acquire an interest in Australian land; and

  (b) the land is agricultural land;

then, in determining whether taking the significant action would be contrary to the national interest for the purposes of subsection (1), the Treasurer must have regard to each of the following matters in so far as the matter is relevant:

  (c) national security issues, including Australia's ability to protect its strategic and security interests;

  (d) the impact the significant action will have, if any, on the following:

     (i) competition, global industry or market outcomes;

     (ii) Australian tax revenues;

     (iii) Australia's food security;

(e) the impact the significant action will have, if any, on the Australian economy, including whether the significant action will, or is likely to, result in;

     (i) the creation of new job opportunities in Australia, or the retention of existing jobs in Australia that may otherwise be lost; or

     (ii) the introduction into Australia of new technology or business skills; or

     (iii) increased export receipts for Australian exporters; or

     (iv) additional market competition, greater efficiency or productivity, or enhanced domestic services, in Australia; or

     (v) the introduction into Australia of additional investment for development purposes; or

     (vi) increased processing in Australia of Australian primary products;

  (f) whether Australia's economic interests are adequately safeguarded and promoted;

  (g) whether the significant action will, or is likely to benefit Australia generally, or any part of Australia or group of Australians;

(h) whether the foreign person has demonstrated financial commitment to the interest;

  (i) whether the foreign person has business experience and acumen relevant to the interest;

  (j) whether the foreign person is of good character;

  (k) any other matter the Minister considers relevant.

(4) Schedule 1, item 4, page 59 (after line 36), after subsection 71(1), insert:

  (1A) If:

  (a) the variation or revocation is of an order under section 67; and

  (b) the significant action to which the order relates is to acquire an interest in Australian land; and

  (c) the land is agricultural land;

then, in determining whether the variation or revocation is contrary to the national interest for the purposes of paragraph (1)(a), the Treasurer must have regard to each of the following matters in so far as the matter is relevant:

  (d) national security issues, including Australia's ability to protect its strategic and security interests;

  (e) the impact the variation or revocation will have, if any, on the following:

     (i) competition, global industry or market outcomes;

     (ii) Australian tax revenues;

     (iii) Australia's food security;

  (f) the impact the variation or revocation will have, if any, on the Australian economy, including whether the result will, or is likely to, result in;

     (i) the creation of new job opportunities in Australia, or the retention of existing jobs in Australia that may otherwise be lost; or

     (ii) the introduction into Australia of new technology or business skills; or

     (iii) increased export receipts for Australian exporters; or

     (iv) additional market competition, greater efficiency or productivity, or enhanced domestic services, in Australia; or

     (v) the introduction into Australia of additional investment for development purposes; or

     (vi) increased processing in Australia of Australian primary products;

(g) whether Australia's economic interests are adequately safeguarded and promoted;

  (h) whether the variation or revocation will, or is likely to benefit Australia generally, or any part of Australia or group of Australians;

  (i) whether the foreign person has demonstrated financial commitment to the interest;

  (j) whether the foreign person has business experience and acumen relevant to the interest;

  (k) whether the foreign person is of good character;

  (l) any other matter the Minister considers relevant.

Amendment (2) relates to the Treasurer's power to make orders in respect of a significant action. If a significant action is in relation to agricultural land, then the Treasurer is required to have regard to Australia's national interest when deciding whether or not to make the order. The current bill does require the Treasurer to have regard to the national interest but there is no detail as to the kinds of factors that should be considered in the context of the national interest.

Item 2 of my amendment removes this ambiguity by clearly setting out what factors the Treasurer can have regard to. This is based on New Zealand's Overseas Investment Act of 2005, which has worked very well for our neighbour. New Zealand is open to foreign investment but also considers very clearly a national interest test, which they exercise on a regular basis because—and it is much more prescriptive, which I think is desirable to the current rules, which are as clear as mud.

The Treasurer will need to have regard to each of the listed matters in so far as a matter is relevant to the order being made in respect of the agricultural land The types of matters include national security issues, the impact the significant action will have on Australian tax revenues and food security and whether the significant action will result in the creation of Australian jobs or if it will result in increased export receipts for Australian exporters. These are very clear, key issues that ought to be considered, by setting out in the act what matters are relevant to the national interest—again, modelled on New Zealand, which has a tried and proven method and one that has worked. I know that Prime Minister Turnbull is a close friend and an admirer of John Key and the New Zealand government. This amendment proposes that we do what they have been doing for a number of years under both New Zealand Labour and New Zealand Nationals administrations. We are safeguarding Australian agricultural land by ensuring that any purchases will not be against our national interest. It will mean that purchases will not be affected by any political whims of the time but have the same criteria that will be applied to a prospective purchase of agricultural land in relation to the threshold.

I will also speak to amendment (4), which relates to orders made in respect of agricultural land, except in this instance the Treasurer must have regard to the national interest criteria if the Treasurer is considering whether to vary or revoke the order. Once again, this amendment sets out what matters should be included in any consideration of Australia's national interest. Amendment (4) is necessary because it ensures that the national interest is taken into account when varying or revoking an order in respect of agricultural land. So it is a technical amendment in nature.

These are sensible amendments, with a threshold value of $15 million—notwithstanding my preference of $5 million—to activate the Treasurer's obligation to analyse purchases of agricultural land. These amendments also provide clear advice as to what matters need to be considered in the context of the national interest. I have given a number of examples of that. As much as it hurts me to say so, the Kiwis have got it right. The Kiwis have had it right for a number of years. They have a better system—one that is efficient, one that is clear and one that genuinely considers the national interest in a much clearer fashion.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government opposes these two amendments, and I explained the reasons for that in my previous contribution.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I mentioned earlier in my contribution that we hope that the next step will be looking at Foreign Investment Review Board thresholds and triggers for water holdings, and part of that of course will be a discussion about what should be in the national interest. I mentioned earlier that the Greens went into the last election with a clear policy on what we believe should be in the national interest. Climate change considerations were, of course, first and foremost in our thinking there. We agree in principle to the amendments that Senator Xenophon has moved, but it is going to take a lot more work. We would like to see this develop, but we will not be voting for the amendments tonight.

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

First, in relation to the amendments moved, I understand Senator Xenophon's motivation and I think he has picked up in part, as he said in his contribution, the New Zealand national interest test—which I think he also referenced in the Senate inquiry report. So he is consistent on this.

We have a view that, in any area of regulation, you always have to judge whether or not being more prescriptive will yield more benefits or more problems. I think the issue here, which Senator Cormann alluded to, in that there may be unintended consequences from being too prescriptive in relation to the national interest test, is that it may have the perverse effect of making the foreign investment regime more open to legal challenge. I understand that is an arguable proposition, but on this issue we are not in a position to support Senator Xenophon's amendments.

In relation to Senator Whish-Wilson's comments, I have to say that, to suggest that somehow the broad consideration on water entitlements that you have got in the deal you have done with the government means that you can consider the national interest test in that context and therefore not vote for Senator Xenophon's amendments, is a very interesting argument.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Can I just put on the record that, if you look at the Overseas Investment Act and what New Zealand have had for a number of years, which was modelled on the Overseas Investment Act, it is sensible to look at the potential for new job opportunities with foreign investment. It looks at the introduction of new technology or business skills, increased export receipts, added market competition, greater efficiency or productivity, additional investment for development purposes and increased processing of primary products. It also looks at a whole lot of issues, including a character test and what their link is to New Zealand in terms of New Zealand legislation. So I think we ought to look at that.

This is not a criticism of Senator Whish-Wilson. The Greens are on the record as not supporting these amendments, but these amendments on the national interest test are actually picked up from the bill that Senator Milne and I co-sponsored. So I hope this issue can be revisited sooner rather than later, because I think it was sound policy. Our neighbour across the Tasman has worked with this. It has not impeded foreign investment, but it has acted as a check on foreign investment that would not be in that country's interest. I think we can learn from the Kiwis.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendments (2) and (4) on sheet 7782 moved by Senator Xenophon be agreed to.

The Committee divided. [20:47]

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

I have two questions to ask the minister. The first is: in response, I think, to Senator Lazarus he was making reference to the fact that the $15 million is cumulative—that is, if a particular investor continues to purchase land the value of all of their holdings is assessed to assess whether or not the $15 million threshold has been met. Can he tell the chamber if there is any other threshold in the foreign investment regime which is cumulative?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

No.

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

Can the minister explain why the government is intent on having a cumulative approach to agricultural land but not a cumulative approach to agribusiness, telecommunications, defence and military related industries, uranium and plutonium extraction or the operation of nuclear facilities?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Because in the government's judgment it is an appropriate arrangement in the context of foreign investment into agricultural land. Obviously that is our judgment. You are entitled to disagree with it but that is the position we have come to.

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

Can the minister explain the reasons behind the judgment? What is the public policy rationale for saying you have to have cumulative in relation to one specific sector of the economy but not in relation to any of the sector?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This in essence is the debate we have been having all night. The threshold used to be $252 million. We thought that was too high. That was at a time when Senator Wong thought the threshold for agricultural land should be the same as for all the relevant assets—that is $1 billion. Of course, you would struggle to find any foreign acquisition that would reach a $1 billion threshold. Labor has moved down from that $1 billion proposition to $50 million. Some people in this chamber, Senator Lazarus in particular, supported by Senator Lambie and Senator Madigan, suggested a zero dollar threshold, which we do not agree with. Senator Xenophon suggested a $5 million threshold. We suggested a $15 million threshold which should be cumulative. That is openly and transparently what we have put on the table because that is what we believe is appropriate in the context of agricultural land. That is our recommendation to the Senate.

We can go around and around in circles. Some people would say the threshold should be higher; some people say it should be lower. We think our recommendation to the Senate is well founded and it is based on obviously extensive public consultations in opposition before the last election.

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

Two points: one is, this is not the debate we have been having all night. I am asking a specific question about why it is cumulative in respect to land but not in relation to any other sectors of the economy. I assume when the minister says he has had a lot of consultation that he has consulted with the very many business groups who have come out opposing the government's policy on this.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The truth is that the coalition has a better understanding of business realities across rural and regional Australia than the Labor Party. That is the reality of it. The Labor Party is essentially a cities party and we have made a judgment that, when it comes to foreign investment in relation to agricultural land, a $15 million cumulative arrangement is the appropriate arrangement.

During this debate, as I have indicated before, some senators suggested it should be zero; some senators suggested it should be five. We do not support those propositions but we do appreciate the proposition which says, when it comes to investment in agriculture, as opposed to investment say in resources or in other sectors of the economy, that transactions are comparatively smaller, that there is more a tendency when it comes to investment in agricultural land to have successive transactions involving small individual parcels of land but the accumulation of interest obviously creates a more significant interest. In the circumstances, the judgment we have made—and it is there for all to see—is that the threshold should not be $252 million, it should not be $1 billion, it should not be $50 billion; it should be $15 million and it should be applied on a cumulative basis based on all holdings.

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

The minister has not addressed why this is cumulative. He avoids the questions when he does not want to answer them but the reality is there is a special deal here in relation to agricultural land that does not apply to any other sector of the economy. There is no public policy rationale that the minister has articulated other than that it is their judgment. I think we have traversed many of the issues in this debate but before I move our amendments I will make the point that the minister sought to say that the Liberal Party knows a lot more about business than the Labor Party. Certainly it appears in this debate that that is not the case because we have seen the Business Council, the Food and Grocery council, the AiG and other business groups be highly critical of the government's approach and it does not appear that the government has listened.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Let us test it at the next election.

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

It was tested at the last one.

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

Who is speaking for the government—Senator Canavan or Senator Cormann?

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

We are together.

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

Senator Canavan, I know you have to vote with the Greens. I know the Greens are who you have gone with and I know that must be an interesting experience for you.

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

We have had a good run with the carbon tax andthe mining tax. They were top of the poll.

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

It is interesting, isn't it, Senator Canavan? We are trying to have a debate in here and until you came in we were having a sensible. Trust Senator Canavan to make sure that debate goes off the rails. Trust him to do that. That is probably why he is where he is and we have Senator Scullion at the front of the party, and good on him. I make this point, too. If he wants to know what business thinks, I invite the minister to read the BCA's press releases and the public comments from the Food and Grocery Council and from other business groups. I would also point this out. As I said at the start, our starting point is jobs and ensuring that we have investments that create jobs for Australians. The minister has said—I cannot recall precisely the words but essentially that there would not be any impact on foreign investment activity in this country. Just today, since the Greens deal has come to light, we see Colliers head of agribusiness that the new laws would slow business down: 'This will slow activity.' So the government is voluntarily engaging in a proposition which will ensure this slows activity. We know slower economic activity means fewer jobs for the people who send us here. We do not see why that is in the national interest. With that, I seek leave to move items (1) to (10), (12) to (14) and (16) to (21) on sheet 7778.

Leave granted.

I move:

(1) Schedule 1, item 3, page 5 (lines 14 and 15), omit the definition of agribusiness in section 4, substitute:

  agribusiness has the meaning given by section 26A.

(2) Schedule 1, item 3, page 5 (after line 27), after the definition of Australia in section 4, insert:

  Australian and New Zealand Standard Industrial Classification Codes means the Australian and New Zealand Standard Industrial Classification Codes, as in force from time to time, published by the Australian Bureau of Statistics.

(3) Schedule 1, item 3, page 26 (lines 21 to 33), omit subsection 19(3), substitute:

(3) This section does not apply for the purpose of determining under paragraph 47(2)(b) (meaning of notifiable actiongeneral) whether a foreign person acquires a substantial interest in an Australian entity.

(4) Schedule 1, item 3, page 30 (lines 30 and 31), omit subsection 26(1), substitute:

(1) A business is a sensitive business if the business:

  (a) meets the conditions specified in the regulations; and

  (b) is not an agribusiness.

(5) Schedule 1, item 3, page 31 (after line 5), after section 26, insert:

26A Meaning of agribusiness

(1) An Australian entity or Australian business is an agribusiness in the circumstances set out in the following table.

Meaning of total earnings

(2) The total earnings for the entity is the total of all earnings before interest and tax derived in Australia in that year by any one or more of the following:

  (a) the entity;

  (b) any subsidiary of the entity that carries on a business of a kind mentioned in subsection (3).

Classes of business

(3) The business must be carried on wholly or partly in any of the following classes of the Australian and New Zealand Standard Industrial Classification Codes:

  (a) any of the classes in Division A (agriculture, forestry and fishing);

  (b) any of the classes in Subdivision 11 of Division C (food product manufacturing), other than any of the following:

     (i) class 1113 (cured meat and smallgoods manufacturing);

     (ii) class 1132 (ice cream manufacturing);

     (iii) class 1162 (cereal, pasta and baking mix manufacturing);

     (iv) a class in group 117 (bakery product manufacturing);

     (v) class 1182 (confectionery manufacturing);

     (vi) a class in group 119 (other food product manufacturing).

Mixed earnings and mixed -use assets

(4) Earnings that are derived from carrying on a business that is not wholly in a class mentioned in subsection (3) may be apportioned, on the basis of publicly available information, between the part of the business that is in the class and the other parts of the business.

(5) The value of assets that are used in carrying on a business that is not wholly in a class mentioned in subsection (3) may be apportioned, on the basis of publicly available information, between the part of the business that is in the class and the other parts of the business.

(6) Schedule 1, item 4, page 35 (lines 23 to 25), omit "A different threshold test applies for certain significant actions taken in relation to agribusinesses."

(7) Schedule 1, item 4, page 36 (lines 11 and 12), omit paragraph 40(2)(a).

(8) Schedule 1, item 4, page 36 (lines 28 to 30), omit the note.

(9) Schedule 1, item 4, page 37 (lines 30 and 31), omit paragraph 41(2)(a).

(10) Schedule 1, item 4, page 38 (lines 3 to 5), omit the note.

(12) Schedule 1, item 4, page 40 (lines 7 and 8), omit:

  Substitute:

(13) Schedule 1, item 4, page 41 (lines 3 and 4), omit paragraph 47(2)(a).

(14) Schedule 1, item 4, page 43 (table item 1), omit the table item.

(15) Schedule 1, item 4, page 44 (lines 15 to 20), omit paragraph 52(2)(b), substitute:

  (b) the value of the interest in the land is more than:

     (i) $50 million; or

     (ii) if a higher value is prescribed for the purposes of this paragraph—that higher value.

(16) Schedule 1, item 4, page 54 (table item 1), omit "a direct interest in an Australian entity that is an agribusiness, or".

(17) Schedule 1, item 4, page 55 (table item 5), omit "a direct interest in an Australian business that is an agribusiness, or".

(18) Schedule 1, item 4, page 55 (table item 1), omit "a direct interest in an Australian entity that is an agribusiness, or".

(19) Schedule 1, item 4, pages 55 and 56 (table item 2), omit "a direct interest in an Australian business that is an agribusiness, or".

(20) Schedule 1, item 4, page 57 (table item 1), omit "a direct interest in an Australian entity that is an agribusiness, or".

(21) Schedule 1, item 4, page 57 (table item 4), omit "a direct interest in an Australian business that is an agribusiness, or".

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government has extensively explained the reason we oppose these amendments. The government will not be supporting these amendments.

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

I know the crossbenchers' views on this are probably clear. I would like to remind the government of what the Australian Food and Grocery Council said, as these are amendments that go to the agribusiness threshold. The council warned that the government's amendments would have 'a chilling effect on foreign investment'. They said the government's barriers to investment 'would discourage investment', are 'not based on a clear public policy objective', are 'inconsistent with the government's efforts to attract foreign investment and undermine efforts to build stronger economic relationships through trade agreements'. The council also said that the chilling effect on foreign investment 'is particularly relevant to high-growth, often mid-tier food manufacturers seeking access to foreign investment to fund rapid expansion, including to meet export growth potential'.

These are salient propositions that the government would do well to listen to. I would again make this point: the government has taken the approach whereby we have the extraordinary and bizarre position where the threshold for foreign investment in sectors like uranium extraction and defence industries is five times higher than the threshold for investments in food manufacturing. Labor's proposition is a sensible proposition: to treat agribusiness the same as other non-sensitive sectors of the economy rather than to single it out for more restrictive investment barriers.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, we disagree with the grocery council's position on this. We took our position to the last election, and the people of Australia will have an opportunity to pass judgement on the way that we have dealt with this at the next election as well. Clearly Senator Wong has not really listened to my extensive answers to her various earlier questions. The difference between agriculture and some of the other sectors she mentioned is that the transactions are inevitably much smaller. If the threshold for agriculture were the same as, for example, for defence industries and the resources sector, as she is suggesting, then essentially no foreign investment transactions in Australia would be likely to be captured by that.

It seems that Senator Wong was talking against her own amendment by suggesting that the threshold between agriculture and defence industries and the resources sector should be the same because, according to her own amendments, that would not be the situation if Labor's amendments were to pass.

The government is pursuing this because there is a very clear policy rationale for it—that is, that we recognise the importance of foreign investment for our future economic success. We think it is very important that the Australian community can have confidence in the integrity of our foreign investment review screening arrangements. That is why, consistent with our pre-election policy, we are putting this legislation forward.

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

I do not quite understand what the minister is saying. This amendment plus No. 11 are seeking to put agribusiness on the same footing as other areas. As yet I am still waiting to hear from the government as to what their logic is in having so much more a restrictive a position in respect of agribusiness than for a whole range of other more sensitive sectors, which I have previously outlined. I am interested in that. I see Senator Smith here—he and others are very happy to write columns for The Australian Financial Review calling for a more open economy, more rational economic debate, less protectionism, less populism. Well, you are going to come in here and vote with the Australian Greens! I hope that you and Senator Seselja and Senator Ryan and a range of others who, I think, call yourselves 'the modest members', who pride yourselves on being the carriers of the Liberal tradition of economic rationalism, are enjoying the fact that you have done a deal with the Greens on economic policy, because that is what you are voting for.

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

The question is that opposition amendments (1) to (10), (12) to (14) and (16) to (21) on sheet 7778 be agreed to.

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

I move opposition amendment (11) on sheet 7778:

(11) Schedule 1, item 4, page 38 (lines 16 to 19), section 42 to be opposed.

The TEMPORARY CHAIRMAN: The question is that section 42 in item 4 of schedule 1 stand as printed.

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

I move amendment (15) on sheet 7778:

(15) Schedule 1, item 4, page 44 (lines 15 to 20), omit paragraph 52(2)(b), substitute:

  (b) the value of the interest in the land is more than:

     (i) $50 million; or

     (ii) if a higher value is prescribed for the purposes of this paragraph—that higher value.

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

The question is that amendment (15) on sheet 7778 be agreed to.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Greens amendments (2) and (1) on sheet 7809 together:

(1)

[sunset provision]

(2) Schedule5—Sunset provision for the Register of Foreign Ownership of Agricultural Land Act 2015

Register of Foreign Ownership of Agricultural Land Act 2015

1 Section 31

After:

The Commissioner must give the Minister periodic reports, at least annually, for presentation to Parliament.

insert:

This Act ceases to have effect at the end of 1 December 2016 unless, before then, an Act has provided for a register of foreign ownership of water entitlements.

2 After section 34

Insert:

34A Sunset provision

(1) This Act ceases to have effect at the end of 1 December 2016 if an Act, or the provisions of an Act, providing for a register of foreign ownership of water entitlements do not commence before that time.

(2) The Minister must announce, by notifiable instrument, the day an Act, or the provisions of an Act, providing for a register of foreign ownership of water entitlements commence.

[sunset provision]

Bob Day (SA, Family First Party) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2) on sheet 7810, amending Senator Whish-Wilson's amendment (2) on sheet 7809, together:

(1) Amendment (2), item 2, subsection 34A(1) omit "register of foreign ownership of water entitlements", substitute "register of water entitlements".

(2) Amendment (2), item 2, subsection 34A(2) omit "register of foreign ownership of water entitlements", substitute "register of water entitlements".

I suspect that I am in the same boat as many in this place in that I only learned this morning about the agreement between the Greens and the coalition to implement a register of foreign ownership of water in Australia within two years. Already colleagues in this debate have indicated that there are questions about how that is to be implemented.

I do not profess to be an expert on these matters, but I have heard exhaustive evidence on this in the Senate select committee inquiry into the Murray-Darling Basin. Many witnesses have spoken about the detachment of water from land entitlements in the basin, and the most active and significant trade in water is in the Murray-Darling Basin. Let me be clear about this point, and I have told the Greens this: Family First supports their register of foreign ownership; however, I flag that I have now moved to remove the word 'foreign'. Family First is not a xenophobic party. We welcome foreign investment. The very strong point being made in the Murray-Darling Basin inquiry is that there is more concern about domestic firms speculating on water than about foreign ownership of water.

I support the public finding out these facts. As I said in my second reading contribution, the same applies to water. A little light dispels a great darkness, it has been said. We have speculation and front bar talk at the moment but very little by way of fact to put on the record on land or water. A step in that direction would of course be a register of all ownership, and it may turn out that it is not so much foreign raiders who are speculating but domestic water barons.

There is still time for the government and the Greens to support this amendment. We are not legislating the minute detail of what this register books like. We are legislating a commitment to establish a register within two years. The question is: will it be a register of all ownership or just foreign ownership? I urge the Senate and parties to support this amendment.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government understands and acknowledges the amendments being put forward by Senator Day. They do go beyond the scope, though, of the overall bill. Whilst the government cannot agree to the amendments as stated, Senator Day's intentions are noted, and the government will more than happily engage with Senator Day down the track, bearing in mind that there will be full public consultation on the establishment of this register. That is not within two years, as Senator Day indicated. The intention would be for that register of foreign ownership of water entitlements to be established within 12 months.

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

The question is then that Senator Day's amendments (1) and (2) on sheet 7810 to amendment (2) on sheet 7809 be agreed to.

Question negatived.

The TEMPORARY CHAIRMAN: The question now is that amendments (2) and (1) on sheet 7809 be agreed to.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.