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31    Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015

Order of the day read for the adjourned debate on the motion of the Minister for Communications (Senator Fifield)—That this bill be now read a second time.

Question put and passed.

Bill read a second time.

The Senate resolved itself into committee for the consideration of the bill.

 

 

 

In the committee

Bill, taken as a whole by leave, debated.

Senator Lazarus, also on behalf of Senators Lambie and Madigan, moved the following amendments together by leave:

No. 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.

No. 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 writt en 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 sitting days of receiving it.

Debate ensued.

The question was divided at the request of the Leader of the Opposition in the Senate (Senator Wong)—

Question—That amendment no. 1 be agreed to—put.

The committee divided—

AYES, 3

Senators—

Lambie

Lazarus (Teller)

Madigan

NOES, 44

Senators—

Back

Hanson-Young

McLucas

Ryan

Brown

Johnston

Moore

Siewert

Bullock

Ketter

Muir

Simms

Cameron

Lindgren

O’Neill

Smith

Canavan

Lines

Peris

Sterle

Colbeck

Ludlam

Polley

Urquhart (Teller)

Cormann

Ludwig

Reynolds

Wang

Dastyari

McAllister

Rhiannon

Waters

Day

McGrath

Rice

Whish-Wilson

Di Natale

McKenzie

Ronaldson

Wong

Gallacher

McKim

Ruston

Xenophon

 

 

Question negatived.

Question—That amendment no. 2 be agreed to—put.

The committee divided—

AYES, 25

Senators—

Bilyk

Day

Ludwig

O’Neill

Brown

Gallacher

Madigan

Polley

Bullock

Ketter

McAllister

Sterle

Cameron

Lambie

McLucas

Urquhart (Teller)

Carr

Lazarus

Moore

Wong

Conroy

Lines

Muir

Xenophon

Dastyari

 

 

 

NOES, 39

Senators—

Back

Fifield

Nash

Seselja

Bernardi

Hanson-Young

Parry

Siewert

Birmingham

Johnston

Payne

Simms

Bushby

Leyonhjelm

Reynolds

Sinodinos

Canavan (Teller)

Lindgren

Rhiannon

Smith

Colbeck

Ludlam

Rice

Wang

Cormann

Macdonald

Ronaldson

Waters

Di Natale

McGrath

Ruston

Whish-Wilson

Edwards

McKenzie

Ryan

Williams

Fawcett

McKim

Scullion

 

 

 

Question negatived.

Senator Xenophon moved the following amendment:

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”.

Debate ensued.

Question—That the amendment be agreed to—put.

The committee divided—

AYES, 16

Senators—

Day

Lazarus

Muir

Simms

Di Natale

Ludlam

Rhiannon

Waters

Hanson-Young

Madigan

Rice

Whish-Wilson

Lambie

McKim

Siewert (Teller)

Xenophon

 

 

NOES, 33

Senators—

Back

Dastyari

McGrath

Ruston

Bilyk (Teller)

Gallacher

McKenzie

Scullion

Brown

Ketter

McLucas

Seselja

Bullock

Lindgren

Moore

Singh

Bushby

Lines

O’Neill

Smith

Cameron

Ludwig

Peris

Sterle

Canavan

McAllister

Polley

Wang

Colbeck

McEwen

Reynolds

Wong

Cormann

 

 

 

Question negatived.

Senator Xenophon moved the following amendments together by leave:

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.

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.

Debate ensued.

Question—That the amendments be agreed to—put.

The committee divided—

AYES, 5

Senators—

Lambie

Madigan

Muir

Xenophon (Teller)

Lazarus

 

 

 

NOES, 39

Senators—

Bilyk (Teller)

Gallagher

McKenzie

Scullion

Bullock

Hanson-Young

McKim

Simms

Bushby

Ketter

McLucas

Singh

Cameron

Lindgren

Moore

Smith

Canavan

Lines

O’Neill

Sterle

Colbeck

Ludlam

Peris

Wang

Cormann

Ludwig

Reynolds

Waters

Dastyari

McAllister

Rhiannon

Whish-Wilson

Day

McEwen

Rice

Wong

Gallacher

McGrath

Ruston

 

 

 

Question negatived.

Bill further debated.

Senator Wong moved the following amendments together by leave:

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.

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 .

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 action —general) whether a foreign person acquires a substantial interest in an Australian entity.

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.

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.

Australian entities and Australian businesses that are agribusinesses

Item

Column 1

This kind of Australian entity or Australian business …

Column 2

is an agribusiness if …

1

an Australian entity

(a) any one or more of the following entities (the agribusiness entities ) derive earnings from carrying on a business of the kind mentioned in subsection (3):

(i) the entity;

(ii) a subsidiary of the entity; and

(b) the amount of those earnings before interest and tax, derived by the agribusiness entities in the most recent financial year for which the financial accounts of the entity have been audited, exceeds 25% of the amount of the total earnings for the entity.

2

an Australian entity

(a) any one or more of the following entities (the agribusiness entities ) use assets in carrying on a business of the kind mentioned in subsection (3):

(i) the entity;

(ii) a subsidiary of the entity; and

(b) the value of those assets exceeds 25% of the total asset value for the entity.

3

an Australian business

(a) the business uses assets in carrying on a business of the kind mentioned in subsection (3); and

(b) the value of those assets exceeds 25% of the value of the total assets of the business.

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.

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.”

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

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

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

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

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

A notifiable action is a proposed action by a foreign person:

         (a)      to acquire a direct interest in an Australian entity or Australian business that is an agribusiness; or

         (b)      to acquire a substantial interest in an Australian entity; or

          (c)      to acquire an interest in Australian land.

Generally, the action is only notifiable if the entity, business or land meets the threshold test. A different threshold test applies for certain notifiable actions taken in relation to agribusinesses.

Substitute:

A notifiable action is a proposed action by a foreign person:

         (a)      to acquire a substantial interest in an Australian entity; or

         (b)      to acquire an interest in Australian land.

Generally, the action is only notifiable if the entity, business or land meets the threshold test.

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

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

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

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

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

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

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

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

Debate ensued.

Question—That the amendments be agreed to—put.

The committee divided—

AYES, 21

Senators—

Bilyk (Teller)

Gallacher

McAllister

Peris

Bullock

Gallagher

McEwen

Singh

Cameron

Ketter

McLucas

Sterle

Carr

Leyonhjelm

Moore

Wang

Collins

Lines

O’Neill

Wong

Dastyari

 

 

 

NOES, 42

Senators—

Back

Fifield

McKim

Scullion

Bernardi

Hanson-Young

Muir

Seselja

Birmingham

Johnston

Nash

Siewert

Bushby

Lambie

Parry

Simms

Canavan

Lazarus

Payne

Sinodinos

Colbeck

Lindgren

Reynolds

Smith (Teller)

Cormann

Ludlam

Rhiannon

Waters

Day

Macdonald

Rice

Whish-Wilson

Di Natale

Madigan

Ruston

Williams

Edwards

McGrath

Ryan

Xenophon

Fawcett

McKenzie

 

 

 

Question negatived.

Question—That the bill stand as printed—divided, at the request of Senator Wong, in respect of Schedule 1, item 4, section 42.

Question—That Schedule 1, item 4, section 42 stand as printed—put.

The committee divided—

AYES, 38

Senators—

Back

Fawcett

Muir

Scullion

Bernardi

Fifield

Nash

Seselja

Birmingham

Hanson-Young

Parry

Siewert

Bushby

Johnston

Payne

Simms

Canavan

Lindgren

Reynolds

Sinodinos

Colbeck

Ludlam

Rhiannon

Smith (Teller)

Cormann

Macdonald

Rice

Waters

Day

McGrath

Ruston

Whish-Wilson

Di Natale

McKenzie

Ryan

Williams

Edwards

McKim

 

 

 

NOES, 22

Senators—

Bilyk (Teller)

Gallacher

McAllister

Peris

Bullock

Gallagher

McEwen

Singh

Cameron

Ketter

McLucas

Sterle

Carr

Lazarus

Moore

Wang

Collins

Leyonhjelm

O’Neill

Wong

Dastyari

Lines

 

 

 

Section agreed to.

Senator Wong moved the following amendment:

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.

Question—That the amendment be agreed to—put.

The committee divided—

AYES, 21

Senators—

Bilyk (Teller)

Gallacher

McAllister

Peris

Bullock

Gallagher

McEwen

Singh

Cameron

Ketter

McLucas

Sterle

Carr

Leyonhjelm

Moore

Wang

Collins

Lines

O’Neill

Wong

Dastyari

 

 

 

NOES, 42

Senators—

Back

Fifield

McKim

Scullion

Bernardi

Hanson-Young

Muir

Seselja

Birmingham

Johnston

Nash

Siewert

Bushby

Lambie

Parry

Simms

Canavan

Lazarus

Payne

Sinodinos

Colbeck

Lindgren

Reynolds

Smith (Teller)

Cormann

Ludlam

Rhiannon

Waters

Day

Macdonald

Rice

Whish-Wilson

Di Natale

Madigan

Ruston

Williams

Edwards

McGrath

Ryan

Xenophon

Fawcett

McKenzie

 

 

 

Question negatived.

Senator Whish-Wilson moved the following amendments together by leave:

No. 1—Page 126 (after line 33) , at the end of the bill, add:

Schedule 5 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.

No. 2—Clause  2 , page 2 (at the end of the table), add:

5.  Schedule 5

The later of:

(a) the start of the day after this Act receives the Royal Assent ; and

(b) immediately after the commencement of the Register of Foreign Ownership of Agricultural Land Act 2015 .

 

Senator Day moved the following amendments to Senator Whish-Wilson’s proposed amendment no. 1 together by leave:

Item 2, subsection 34A(1) omit “register of foreign ownership of water entitlements”, substitute “register of water entitlements”.

Item 2, subsection 34A(2) omit “register of foreign ownership of water entitlements”, substitute “register of water entitlements”.

Debate ensued.

Question—That Senator Day’s amendments to Senator Whish-Wilson’s proposed amendment be agreed to—put and negatived.

Question—That the amendments be agreed to—put and passed.

Bill, as amended, agreed to.

Bill to be reported with amendments.

 

 

 

The President resumed the chair and the Temporary Chair of Committees (Senator Edwards) reported accordingly.

On the motion of the Minister for Finance (Senator Cormann) the report from the committee was adopted and the bill read a third time.