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Wednesday, 27 June 2012
Page: 4677

Foreign Investment

Senator MADIGAN (Victoria) (14:56): My question is to the Minister representing the Treasurer, Senator Wong. Minister, can you explain why the asset value threshold for foreign ownership of Australian primary production business and rural land, before investigation conditions need to be met to gain approval, stands at $244 million, a figure that is almost 2½ times higher than that of our close ally and neighbour New Zealand?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:57): I will start by making a couple of general points. The first is that the ABS data which the government commissioned in November 2010 indicates that levels of foreign investment in the agricultural sector have remained relatively stable for the last 30 years. The second point I would like to make to Senator Madigan, and I do understand his concerns—he has been consistent about them and he is representing the views of a number of his constituents—is that it is important to remember why we have foreign investment in Australia. It is because we do not have sufficient capital in this country to make the investments that are needed. Investment is good for Australian jobs and Australian workers and it is good for the economy more broadly. If we had a position where we said, 'We don't want foreign investment,' we would actually be saying that we want to generate less economic output and less economic wealth.

Senator Nash interjecting

Senator WONG: I am not quite sure whether the National Party is for or against foreign investment, from their interjections, but what we do know is that they will roll over again, just as they are doing on pre-selections—good luck in the seat of Hume—but I think the Leader of the Opposition got some—

The PRESIDENT: Order! Come to the question, Senator Wong; ignore the interjections.

Senator WONG: I apologise to Senator Madigan. In terms of the government's position: we apply a rigorous national interest test to all foreign investment applications. We screen every dollar of direct investment from foreign governments. The reality is that Australia has long been reliant on foreign capital to build and develop its business in all parts of the economy, including agriculture. I referred earlier to the commissioning of the ABS to give the government and the Australian people a better picture of the foreign investment landscape. The intention there was to take sensible steps to acquire a comprehensive snapshot of foreign investment levels in Australia's agricultural land, water entitlements and agribusiness. As I said, I am advised that the data indicates a relatively stable level of investment for around the last three decades. (Time expired)

Senator MADIGAN (Victoria) (14:59): Mr President, I have a supplementary question. Given that our foreign investment thresholds are so high and that the Australian Bureau of Agricultural and Resource Economics and Sciences reports that 99 per cent of foreign owned land relates to area and not enterprise ownership, can the minister explain why there is no cap on the area of land foreign investors can purchase until they reach the $244 million price tag?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (15:00): Firstly, in terms of foreign ownership levels, the ABARES data to which I referred in the first question shows that foreign ownership in the agricultural sector remains modest and that around 89 per cent of agricultural land is entirely Australian owned. The government is continuing to look at ways we can improve transparency in the foreign ownership of agricultural land and I am advised that the government recently announced it would establish a working group to develop a register of foreign ownership of agricultural land. This would provide the community with a more comprehensive picture of the specific size and location of foreign agricultural land holdings than is currently available.

Senator MADIGAN (Victoria) (15:00): I have a further supplementary question, Mr President. Will the minister consider the proposal from farming groups to reduce the threshold for applying investigations and special conditions to $15 million and also consider leasehold of land as the only form of foreign ownership when large acreages are concerned?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (15:01): The ABARES report released by the government earlier this year notes that the current strong regulatory framework surrounding foreign investment in agriculture is providing:

… a considerable level of scrutiny of foreign investment proposals and operations of foreign-owned agribusiness in Australia.

Senator Williams: A free for all!

Senator WONG: Senator Williams, if you have an issue with what I am saying I suggest you have a talk with Mr Robb because your position is 180 degrees—

The PRESIDENT: Order! Senator Wong, this is not a debating time. Ignore the interjections.

Senator WONG: The government will continue to ensure that our foreign investment policies protect the national interest. Whilst I do understand Senator Madigan's concerns, as I said he has been consistent in raising those, the government is of the view, consistent with the historical reality that Australia has long been reliant on foreign capital to build and develop businesses in all parts of the Australian economy, including agriculture, that it is important we recognise the benefits that this foreign investment brings to Australians, not just in businesses concerned but across the economy.

Senator Chris Evans: Mr President, I ask that further questions be placed on the Notice Paper.