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Thursday, 22 September 2011
Page: 6913

Senator GALLACHER (South Australia) (17:51): I rise to speak against the private member's bill on foreign acquisitions of agricultural land sponsored by Senator Xenophon. From public discussion it is quite evident there are concerns from the community and, indeed, a level of apprehension about the level of foreign ownership and the level of foreign acquisitions of agricultural land. However, the government must remain responsible in their actions in dealing with this matter. As the Assistant Treasurer, the Hon. Bill Shorten, stated in the Weekend Australian on 10 September:

It is vital we protect the national interest and continue to strike the right balance between attracting foreign investment and ensuring agricultural and food security.

I think this is an eminently sensible view from the Assistant Treasurer and this is something that all Australians would like to see as the right outcome in regards to foreign acquisitions of agricultural land. That is why the government should not jump the gun in making significant changes without an adequate picture of the current impact of foreign investment in Australian agricultural land.

The push for regulation seems to be merely based on concerns and not on substantive data, obviously because of the limited data that has been available. The debate requires clear thinking for the government to get a full, historic and current picture of foreign investments in Australian agricultural land. It is greatly recognised that Australia has been able to benefit from foreign investments in all sectors of the economy, and making changes that potentially could discourage foreign investment would not be a smart move by any government. I know all Australians understand that foreign and domestic investment in Australia is vitally important to the economy. These investments support local jobs, economic growth and future prosperity. Any move that jumps the gun in this situation could lead to the discouragement of foreign investment and greatly impact on our already established free trade agreements.

That is why this government is taking this issue very seriously. We will continue to look into the issue meticulously so that we can better understand the situation at hand and have the adequate data needed to make any decisions necessary. The Labor government is committed to striking the balance that all Australians are seeking, which led the Assistant Treasurer and Minister for Financial Services and Superannuation the Hon. Bill Shorten and the Minister for Agriculture, Fisheries and Forestry the Hon. Joe Ludwig to commission the Australian Bureau of Statistics, along with the Rural Industries Research and Development Corporation and ABARES, to get a better picture of foreign investment in Australia's agriculture sector.

The Australian Bureau of Statistics research project was published on 9 September and showed that a very modest amount of Australia's agricultural industry is owned by foreign investors. The data was collected in March this year after the request was made in December last year. The results were quite surprising considering the level of perceived foreign or business ownership of agricultural land. The result of the publication showed that 99 per cent of agricultural businesses in Australia are entirely Australian owned. The other headline figure was that 89 per cent of agricultural land was entirely Australian owned and, finally, 91 per cent of water entitlements were also entirely Australian owned. The ABS issued a media release which said:

The businesses reporting they were not fully Australian owned may have been either partially or entirely foreign owned and, as such the survey provides information about business, land and water entitlements by the extent of their foreign ownership.

We can dive further into the statistics which showed that only 5.8 per cent of land was owned by foreign investors, while the other 5.5 per cent of land that was foreign owned came from a minority stake of investors having less than 50 per cent ownership. From a South Australian perspective 87.9 per cent of agricultural land is entirely Australian owned with only 0.7 per cent in foreign hands with more than a 50 per cent stake in ownership. The slightly higher levels of foreign investment in South Australia can be assumed to be investments in our sheep, beef and grain farms. The ABS later stated:

The survey results are broadly comparable with levels of foreign ownership of agricultural businesses and land collected in the Agricultural Census of 1983-84. The ABS has not previously collected data on foreign ownership of agricultural water entitlements.

Considering this is the first time a study like this has been conducted in over 20 years this information is going to be vital in the ongoing debate on this topic. Along with the other commissioned reports, it will provide the government with an adequate picture of foreign acquisitions which this bill fails to consider.

The Senate Economics Committee report also made mention of the lack of data suitable for policy making decisions. When discussing the change to the threshold the committee commented:

… the current data gathering and research project should be completed before any adjustment to the threshold is made. Following the reporting of better data, the Foreign Investment Review Board figure should then be reviewed to allow for an appropriate threshold.

There must also be strong consideration given to the fact that Australia's foreign investment screening regime has continued along the path of a strong pro-investment stance. It is my understanding that most proposals are dealt with and approved within the first 30 days.

The government's policies are reflected to balance our interests and must remain balanced under commitments to free trade agreements and obligations to our trading partners. This government will continue to remain committed to ensuring our national interests are protected. That is why the government is waiting for the report to be completed by ABARES and RIRDC before the end of the year. These reports will look into the history and drivers of foreign investment in agriculture, and will also look into the impacts, drivers, structures and regulation of ownership in agriculture. The government feels this is the right course of action to take, especially when looking at the current situation of foreign ownership of agricultural businesses and land. Only after receiving these reports can the government be sure that any changes made will be consistent with a balanced approach. We on this side of the chamber feel and reiterate that the bill is jumping the gun, so to speak, by not taking into consideration many issues.

The Senate Economics Committee report into this bill also had additional issues that need to be addressed, which I am sure will continue to be brought up by this side of the chamber. These include: whether the current screening arrangements are actually inappropriate; that there is a significant advantage in retaining the inherent flexibility associated with a national interest test that is not overly prescriptive; how does this fit within the existing screening arrangements for the other investments into Australia. Creating a separate framework that applies exclusively to foreign acquisitions of agricultural land will create complexity and confusion both for Australian farmers and foreign investors; how will this impact on Australia's international obligations under Australia's free trade agreements; and all significant private as well as—

Debate interrupted.