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Thursday, 22 September 2011
Page: 6902

Senator FARRELL (South AustraliaParliamentary Secretary for Sustainability and Urban Water) (17:00): The Foreign Acquisitions Amendment (Agricultural Land) Bill was presented by Senator Xenophon and Senator Milne in November last year. I notice that we have some young South Australians in the Senate gallery today who are here for a Young Labor conference. There is Dale Colbeck, who I do not think is any relation to Senator Colbeck, Guy Wilcock, Ben Rillo and Hannah MacLeod. Senator Xenophon, if I recall correctly, was a member of the Young Liberals at one time.

Senator Xenophon: We all make mistakes.

Senator FARRELL: Talking about mistakes, we have one right here—your bill. I guess we all learn things at university when we get involved in these organisations, but we hope not to repeat the mistakes that have been made in the past and in particular not to repeat the mistakes made in this bill. Currently, the threshold figure to trigger an inquiry by the Foreign Investment Review Board is $231 million. According to Senator Xenophon, that figure is too high and he would like to reduce it to $5 million.

Senator Xenophon: The threshold for foreign ownership in China is $1.

Senator FARRELL: Are you saying we should adopt the Chinese system? I notice you appear on this occasion to simply have adopted the New Zealand system, although I think it was pointed out in the course of the Economics Legislation Committee proceedings that that was not an appropriate way to go and you have modified your claim to a dollar amount.

Senator Milne: You are being ridiculous.

Senator FARRELL: It is not being ridiculous, Senator Milne.

Senator Milne: We have not modified it to a dollar.

Senator FARRELL: No, Senator Xenophon was suggesting that we modify it to a dollar—

Senator Xenophon: I rise on a point of order, Mr Acting Deputy President. Senator Farrell has suggested that we modify the figure in the bill to $1 as a threshold. I simply pointed out to Senator Farrell that the figure in China appears to be in the order of $1.

The ACTING DEPUTY PRESIDENT ( Senator Furner ): There is no point of order.

Senator Xenophon: He has misrepresented my position and I would be grateful if he could correct it.

Senator FARRELL: If I have incorrectly asserted that Senator Xenophon's proposal was to reduce the figure from $231 million to $1, I do withdraw that suggestion. I thought he was indicating that that was what China did, and Senator Milne appeared to suggest that I was proposing that to the Senate. But we have now clarified that point.

A number of important statistics released by the Australian Bureau of Statistics make clear the situation with foreign ownership in Australia. Senator Cormann referred to these figures earlier, in his contribution to this debate. The first of those important figures is that 99 per cent of all agricultural businesses in Australia are entirely Australian owned. So we are dealing with this bill in circumstances where 99 per cent of all agricultural businesses in Australia are currently Australian owned. Only 0.6 per cent have greater than 50 per cent foreign ownership—

Senator Heffernan: That is a complete horseshit report.

Senator FARRELL: That may be your view, Senator Heffernan—

Senator Heffernan: Someone has written the speech for you and you don't know what you're talking about..

Senator FARRELL: I do know what I am talking about. You may disagree, and you are free to disagree, and you may wish to support Senator Xenophon and Senator Milne, which you are entitled to do, but I think I am entitled to put the facts as I understand them on the table—and that is what I am proposing to do. I have indicated that the ABS reports that 99 per cent of agricultural businesses are currently entirely Australian owned, and only 0.6 per cent have greater than 50 per cent foreign ownership. More significantly, 88.6 per cent of agricultural land in Australia, by area, is entirely Australian owned. Also importantly, only 5.8 per cent of agricultural land in Australia was owned by businesses with more than 50 per cent foreign ownership.

So we are dealing with this piece of legislation that seeks to dramatically reduce the trigger point for foreign investment inquiries, but we have a set of statistics that I think make it very clear that the problem is not as great as Senator Xenophon is claiming. That is not to say we should not inquire into this issue. It is an issue that has been raised out there in the community and I am not saying we should not inquire into it. In fact there are inquiries into the issue and I think we should allow them to complete in due course before we take this bill any further.

As I said before, Senator Xenophon's original bill, which he introduced with Senator Milne, simply picked up holus-bolus the system that operated in New Zealand. There are many things that you might want to adopt from New Zealand, but I do not think their system of foreign investment is one of them. There are plenty of reasons to distinguish the Australian circumstances from those of New Zealand. One obvious one is the size. Simply because the New Zealanders chose to use the figure of $5 million as the trigger point, it does not automatically follow that Australia, which is much larger and has quite a different agricultural history to New Zealand, should adopt that same process. I have indicated that there was a Senate inquiry into this where they looked at all of these issues. I think what we can say about Senator Xenophon's bill is that it does jump to some conclusions. Until all of the inquiries that are currently going on are completed, I do not believe it is appropriate to proceed with this legislation.

Australia does rely very heavily on foreign investment. That has been the history and the pattern of economic development in this country. Senator Xenophon believes that we should reduce the threshold for consideration by the Foreign Investment Review Board but it is also possible that, if we were to go down this track and introduce this new cut-off point, it might have an impact on how other countries see the opportunity to invest in this country and might have an adverse impact on the way other countries view foreign investment. We do not want to do anything at this point in time that might discourage contemplation of foreign investment. We have seen what has happened around the world in the course of the global economic crisis. We have seen what has happened in the United States and what has happened in Europe with the levels of unemployment. When people are getting very jittery about the prospects of another recession around the world, this is not the time to be raising issues that potentially discourage foreign investment.

Any decision that we do take to change our foreign investment legislation should be based on evidence. That is the way to do it. I have already referred to what the Australian Bureau of Statistics has said are the circumstances with ownership at the moment. One of the things we are waiting for is a report that Senator Ludwig has requested. It is a report by both the Rural Industries Research and Development Corporation and ABARES, two very distinguished organisations. That report is due to be released by the end of the year. The purpose of that report is to deal with the role and the history of foreign ownership in the development of Australian agricultural land and the factors driving foreign investment in Australia. They are two very crucial and important issues to consider before you would even contemplate proceeding with legislation like this to dramatically change the trigger point for an inquiry into foreign investment. We have set up an inquiry. Senator Ludwig has chosen to do that. I think the most basic thing we ought to be doing is not proceeding with this legislation at this point in time but waiting for that report and seeing what it has to say.

There are a range of issues that I think we need to look at. I am sure that this inquiry that Senator Ludwig has set up will do that. Those issues include: are the current screening arrangements that are in place inappropriate? Are there advantages in retaining the inherent flexibility of the national interest test that is not overly prescriptive? How does this issue fit with the existing screening arrangements for other investments in Australia? The potential is that we end up with two systems of foreign investments, one in respect of the issues that are covered by this legislation—namely, agricultural land—and one in respect of all other investments in this country. If this legislation were to proceed and successfully pass the parliament with the support of Senator Heffernan, we would in fact have two sets of rules. There may be reasons why you would want to do that, but at this stage I think it would be indeed premature to suggest that we should proceed with this legislation without at least looking at what the impact of those two systems of financial regulation might be. Senator Milne was critical of the reference by my colleague Senator Bishop to the free trade agreements. We do have agreements in place. Those agreements have been struck with other countries based on our current foreign investment rules. We need to look at the impact that a change of the nature that Senator Xenophon and Senator Milne are proposing will have on any of the obligations that we have under our free trade agreements.

Senator Heffernan interjecting

Senator FARRELL: Senator Heffernan, the reality is that the economic performance of this country has defied most of the other OECD countries. There are lots of reasons why you might say that has happened. One of them that we have just recently found out is that we have the world's best treasurer.

Senator Cash: You can't compare him with the Greek treasurer.

Senator FARRELL: Senator Cash, you may not like the fact that Mr Swan has been declared the world's best treasurer, but it is an indication of the things that have occurred in this country. We have not gone down the path of the conservatives. We tried to make the important decisions on behalf of this country that kept Australians in work at a time when we risked going into recession. You have only to look at what has happened in the United States and what is happening in Europe at the moment. Particularly in the United States, unemployment is continuing to be stubbornly high. Part of our ability to respond in the way we have and the recognition we now have as a country—and I do not think Mr Swan would say it is all his own work; he would want to give credit to—

Senator Heffernan: Peter Costello and Paul Keating.

Senator FARRELL: I would certainly give credit to Paul Keating. I agree with you there, Senator Heffernan.

The ACTING DEPUTY PRESIDENT ( Senator Furner ): Senator Farrell, can I have you raise your commentary through the chair, please.

Senator FARRELL: Thank you for that helpful reminder, Mr Acting Deputy President. I will make all of my remarks through the chair. It is a little difficult with this constant flow of interjections, and I appreciate some assistance in protecting me from Senator Heffernan. But I do agree with him. Paul Keating was a great Treasurer and he has something in common with Treasurer Swan, of course. They both won that international award. I could be wrong about this, but I cannot recall Mr Costello ever winning such an award.

Senator Heffernan: He paid off the $90 billion of debt that Paul left us.

The ACTING DEPUTY PRESIDENT: Order, Senator Heffernan!

Senator FARRELL: The Hawke-Keating government reformed the Australian economy that made all of the subsequent improvements to the Australian economy possible. If Keating and Hawke had not opened up the Australian economy, we would not be in the position we are in.

Senator Cash interjecting

Senator FARRELL: I cannot stop him from interjecting.


Senator FARRELL: We have set up this report. We have gone off to investigate. I think Senator Xenophon should wait for that report to come down. There is no urgency about this issue. If he had a sensible approach to the issue, then he would wait for that report. That report will give us an indication about some of the factors that are currently driving foreign investment in this country.

We know foreign investment under a Labor government is booming in this country. We know other countries want to come and invest in our country. They want to create jobs and they want to build infrastructure. So we know they really do appreciate that Australia is a worthwhile place to invest, but let us examine exactly why they are coming to this country. One of the other things that this report will investigate is the economic impact of foreign investment in Australian agricultural industries and agribusiness. It will review the extent to which similar countries monitor and/or regulate foreign investment in agricultural land. So all of these things are important to the future of Australia's investment climate and all of them should be looked at before we go any further with this bill.