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ECONOMICS LEGISLATION COMMITTEE
12/04/2011
Foreign Acquisitions Amendment (Agricultural Land) Bill 2010

CHAIR —I welcome the National Farmers Federation. Would you like to make an opening statement?

Mr Laurie —We will just run through a couple of things. Obviously the legislation that is sitting there at the moment is something that we are very interested in, but at this stage we would prefer to sit down and see where the government are going with their review into foreign investment. Foreign investment in Australia has been a pretty important part of the agricultural industry for a long period of time and it has certainly maintained land values and equity levels within agriculture. But at the same time I think it is very important that we have an understanding of exactly what amount of foreign investment comes back into agriculture as far as land ownership goes and an understanding of the agricultural production and how that agricultural production is managed with foreign investment. I think it is very important that we understand some of those things before we take the next step forward.

The view of the NFF has always been that the investment coming from overseas actually adds capital back into the industry that quite a few participants in the industry do not have and that it provides a lot of job opportunities. As I have said before, it has certainly maintained market values, and we see that drift right down through property values in Australia from the top end to the bottom end. So there have been some benefits there. But, having said that, I think it is very important that we understand what the issues are, what the percentage of land owned is, the production and where that is then going through into secondary industries and just exactly what impact that will have on food production and food security in Australia and on the Australian economy.

CHAIR —Thank you, Mr Laurie. You have outlined in your submission very clearly the procedure that is already being undertaken. You describe this as a two-track approach involving the Australian Bureau of Statistics and the Rural Industries Research and Development Corporation, who will work with ABARES to undertake a project to try and develop more data and a better feel for what is happening in the sector. You said—and I am paraphrasing you here—that we need to get that established before any change occurs. One of the reasons that you outline here is that generally investment has been positive for Australian farmers and that farmers have benefited not only from the additional capital but from the additional competition that these companies have brought into the supply chain. Is that a reasonable summary of your position?

Mr Laurie —I do not think it is. It all depends how you look at it, but the investments coming from overseas have certainly added a lot of capital, put a lot of value back into land and maintained equity levels at a level that would not have been there if it had not been for that foreign money coming in. You may argue that they are only buying at the top end, but when they buy the top end properties then the people who miss out on those go down to the next tier and the next tier and it filters all the way down. So it does add value to the property market all the way through; we do not think there is any doubt about that. Providing we have a good understanding about exactly what that investment is, what the intentions of that investment are, about the management processes and where the produce is going to go from those foreign-owned companies, then obviously we need to have some comfort that that is not affecting Australia in any adverse way.

While we are saying the investment in the industry has been good—it has provided some very good opportunities—we also need to make sure that the level of investment is about where the Australian community see it as being fair and reasonable. I know there is a lot of debate in the community at the moment about what they see as being fair and reasonable and losing control of food production or losing control of secondary industries, so I think we need to get the facts on the table and then sit down as a country and work out what we think the balance should be. At the moment I do not think we have a clear indication of exactly what that is. As I said initially, it is not just about property ownership. If you look at some of the information it will be that 99 per cent of agricultural properties are owned by families. If you actually work out what agricultural production is produced by family farms as against foreign-owned farms then you will see a different result. It is a matter of getting an understanding of what that is and then the Australian community needing to set some parameters around what they see as being fair and reasonable.

CHAIR —I think you are right. I think, generally speaking, that there would be a lot of sensitivity about any idea that Australia might lose control of its agricultural production, of its agricultural land. Do you have any feel for the idea that in any particular sector or any particular part of Australia there might be starting to be a worrying level of foreign investment?

Mr Laurie —Not so much in agricultural land ownership, because a lot of that is still being managed and a lot of our products are still going back onto the domestic market. This is certainly providing opportunities back to compete in the domestic market and the international market. There are issues being raised about some of the secondary instances, for instance. They are not necessarily about agricultural production, but about the processing sectors and where we go with them, whether that be in the dairy sector or the rice sector—and there is a look being taken at what is going on there—or how we are managing our grain marketing issues. So there is certainly discussion within the industry about that. The important thing is that we need to make sure we maintain competition in the market. If we do not have competition in the market then obviously farmers cannot extract the best value for their product. So I think it is not necessarily at the farm level at the moment but certainly, in making sure that the people actually buy our produce, that we can have as much competition in the market as we possibly can and make sure that that level does not have any impediments put in in any way, shape or form when it comes to allowing that to happen.

CHAIR —There has been a bit of discussion today around the five-hectare limit in this bill that we are considering and also the general limit of $231 million of foreign investment. Could you give your view of whether you might want the agricultural industry separated from other industries in Australia under the FIRB review and how you feel about an amount of land being prescribed rather than the value?

Mr Laurie —I think five hectares on the east cost is a lot different to five hectares west of Broken Hill, so you need to understand that areas probably do not matter too much here. It is about the investment going into that enterprise. A five-hectare one on the eastern seaboard, for instance, could have a substantial investment going into it and it could be completely different. Once again, it is a matter of understanding what it all actually means. Once we have that I think it will make it a fair bit clearer about where you want to set your parameters, whether it is a financial investment that you want to have a look at or whether it is a land based thing. I think the sheer diversity of agriculture would make it that the five-hectare or any area limit would probably be questionable. It probably needs to be on the investment that is actually going in. But it all depends on what you want. If the Australian community want to know what foreign investment is going on within this country then they might well set the parameters at five hectares and have comfort that there is notification on that. In the end, I suppose it is a matter of seeing what people want, what comes out of the review and where we think we need to be to make sure we maintain good, sensible controls over it.

Senator HEFFERNAN —The Australian Bureau of Statistics gave us evidence this morning that they are looking at who is acquiring what by sending a form out to people that they have identified as agricultural. In other words, they could not tell us if Shenhua, who have now become farmers as it were, would get that form. What I am trying to say is I think the process is flawed.

Mr Laurie —Do you want me to answer that, or what?

Senator HEFFERNAN —No.

Mr Laurie —You do not want me to agree with you?

Senator HEFFERNAN —You do not want to be seen to be agreeing with me!

Mr Laurie —I am well aware of that, Bill; that is why my answer would have been far more cautious!

Senator HEFFERNAN —You say in your submission:

Rather than being underpinned by genuine commercial forces where profits are the driver—

And obviously return on money; that was raised by Senator O’Brien this morning and by one of these professor blokes who are in dreamland—

food security has emerged as a new factor for investment. With state owned enterprises—

And I want to go to the question of foreign investment versus foreign sovereign investment—

entering the market, it is becoming blurred as to whether all of this investment is still interested in the profitability of the venture, or rather in ensuring that a consistent stream of food can be delivered to its people.

What if the NFF could encourage the government and the electorate generally to look beyond the next election to where we are going to be in 50 years time given the global food task doubling and all the things that I keep going on about? What if we allowed, without fetter or restriction, sovereign wealth funds to acquire our sovereign assets to secure their own wellbeing and their own sovereignty in the future—which, by the way, is a decline in our sovereignty? Does the NFF have a view as to the danger signs in that area?

Mr Laurie —Australian industry is in a unique position. We export 60 per cent of our produce and we are in a position where we can probably grow that figure a hell of a lot more over time with good, sensible R&D and new technology coming on board. As you fellas all know, there are a lot of countries around the world that do not have that capacity; but Australia is one area that does, and it provides opportunities. If you are sitting overseas in a country that needs to secure food supply in the next couple of years then you will be having a look around the world as to where you see opportunities, and I imagine Australia would be one of those opportunities. Coming out of this review, I would like to think that we will get a very good understanding of where we are at the moment. Obviously we then need to sit down as a country and decide what we see as being acceptable when it comes to foreign ownership and what we do not.

There is a lot of corporate money in Australian agriculture at the moment. There are quite a few big corporate businesses who have money from overseas but are being well and truly managed and maintained by Australian management and interests. If that changes and we have sovereign countries coming in and wanting to purchase areas of our landmass to secure food production, first of all they are going to have to start buying big areas of agricultural land to do it. If they then take that production out of the trading regime and it gets directed straight back to their country to secure food, that is something we have to have a look at.

Our view is that we need to maintain values and get that balance right. We need to be in a position where we have strong competitive markets domestically and internationally. If we do not do that, we are not doing the right thing. When it comes down to determining exactly what we think is right or wrong, I think the same as everybody else: let us have a look and see what comes out of this and then have a serious discussion about where we should be taking it forward and what parameters we should be setting. Shenhua is buying up country in the Liverpool Plains to put in a coalmine. That company is Chinese government owned, as far as I know.

Senator HEFFERNAN —It is 68 per cent government owned.

Mr Laurie —We have to look at what do they do with the produce. Where does it end up? Is it directed straight back overseas, or what?

Senator HEFFERNAN —In this particular case, it is obviously not designed for the food task. But what the state government wanted $20 million for, they bid $300 million for. And next door BHP bid $100 million. This is a non-market currency. America finds itself between a rock and a hard place with a non-market currency being part of their capital. The US is technically insolvent. So we are dealing with a non-market currency.

Does the NFF see a potential for distortion, not only of the market-value of farming land but of agricultural opportunity, which would occur through the likes of a non-market currency acquiring assets to look after a 50-year strategic plan back home regardless of the distortion that occurs here? I declare an interest; I am a farmer. We have to get a return on our money to get an extension from the bank. We recently saw, I think, Tony Windsor get three or four times the value of his farm from a coal mine. It makes it a bit bloody hard if you are the farmer next door. There is a double-edged sword to the professor’s earlier argument. You distort the market to where it become so distorted you cannot operate in it anymore. Wouldn’t one of the main drivers to that occur if you had unfettered access by various countries around the world—I could name them—to our agriculture, because they will have to acquire their agricultural production from another source in the next 50 years? Is this a serious danger sign for Australia?

Mr Laurie —You are worried about the distortion of the land values? Is that what you are talking about?

Senator HEFFERNAN —Yes.

Mr Laurie —Once again, that boils down to whether you are a buyer or a seller. International money that has been invested in agriculture over the years—you can go back a long way; there is a lot of history there—has caused distortions for many years.

Senator HEFFERNAN —I think it is fair enough if it is corporate foreign money, where you can go along to a board somewhere and sack the board but if you are dealing with a country—a sovereign fund—especially a country that has a non-market currency, isn’t that a serious problem?

Mr Laurie —I would like to think that once this review is done we will have an understanding and we can then sit down and start putting some parameters around it. When you are in the position of trying to sell an article competition in the market place from anyone—

Senator HEFFERNAN —I understand—

CHAIR —Senator Heffernan—

Mr Laurie —I know the answer Bill wants and I am trying to be very cautious about the way I give this answer. Understand that when you are in a sellers’ market competition in the market place is very good. For that reason our industry obviously wants to make sure that they encourage people to be in the market place.

Senator HEFFERNAN —Hear, hear.

Mr Laurie —I think the industry and the Australian community in general would like to see some sensible parameters put around who can invest and who cannot invest in the industry. But I am not, at this stage, prepared to say exactly what the parameters will be because I need to spend a bit of time looking at it.

Senator HEFFERNAN —That is fair enough. If we were to go over to some of these countries and try to acquire a bit of freehold land to do something they would give us the middle finger. They would tell you to clear out.

Mr Laurie —You just might be able to do that to them in a few years time, but you have a bit of work to do between now and then.

Senator WILLIAMS —In your submission you said that your concern, if I am reading it correctly, is that in future when foreign countries buy up our land here they may just take the produce of that land straight to their country for food supply. They would take it out of the market here reducing supply and forcing food prices up in Australia. Would that be true?

Mr Laurie —With market forces you can get a combination of anything. I think we have seen over the years, especially during the drought years, bounces. If you get a graph of any of our commodities you will see that they bounce. If I said to you 12 months ago, ‘If the dollar gets to 105c all our export commodities will be devastated,’ you would all have agreed, but export commodities are now probably as good as they have ever been. We cannot read how the market is going to be but we do know that supply and demand are the drivers of price, in general, and if you are removing some of that supply out of the market place then you may create more of a demand. So, on those principles you could say that the market would go up.

Senator WILLIAMS —I go back to the legislation proposed. You are the man who represents the biggest farm body in Australia. For any property now sold for $230 million or less there is no scrutiny whatsoever. We do not have records of who is buying them. Being a man from the land yourself, do you think that we should have a registrar to keep a record of who is buying what land in Australia over time, to monitor it and to reduce that $230 million threshold? Western Australia is saying that the average price of a farm is between $1 million and $10 million. Do you think that threshold should be brought down and do you think we should have a registrar to monitor how much land in Australia is going to be sold off overseas or is owned by overseas investors?

Mr Laurie —I think the answer to that question is that I do not think it ever hurts to know what is going on.

Senator WILLIAMS —Exactly.

Mr Laurie —I cannot put the parameters around it at the moment. We need to sit down and have a look at what is workable and what is not workable. It is interesting that we are now having a debate about this whole thing and nobody really understands what the situation out there is at the moment.

Senator WILLIAMS —Guessing four per cent foreign owned Australian agricultural land, according to one graph I have seen today.

Mr Laurie —It bounces around. I have heard 99 per cent are owned by family farmers; I have heard 95 per cent are owned by family farmers. If the 80-20 rule applies, then with an 80 per cent reduction out of 20 per cent producers, the figures on a production basis could be different. So, let’s understand it. I do not think it hurts to know, but I am not exactly sure where we should be intervening and at what level. Once we get a bit of an understanding and set some parameters around where the Australian community feel comfortable, then it will be easier to move ahead, but at the moment it is a bit difficult.

Senator WILLIAMS —Looking at the $231 million threshold, I do not know that there has ever been a farm in Australia sold for more than $230 million. I think there would be very few farms worth $230 million at today’s market. What we have now is a situation where it is a free for all, not monitored and not scrutineered by the Foreign Investment Review Board. Surely that must be altered so that, going back to your words, it does not hurt to know—we know who is buying our land, we are scrutinising that, collecting the data and seeing what future risks there are of these people buying our land and taking the produce off that property instead of taking it to the market auction. Would you agree?

Mr Laurie —I do not think I need to add to anything. You have covered it pretty clearly.

Senator XENOPHON —Regarding the $231 million threshold for countries other than the US, where it is $1,005 million, is it the NFF’s position that the figure needs to be reviewed in the context of the matters that we are looking at, whether it is food security or the way we are going in terms of agricultural production?

Mr Laurie —At the moment, as we have said, I do not think we really understand the situation. I do not think it would hurt to understand the situation. Senator Williams is exactly right: I do not think you would be able to go back through the records and find one property that has ticked over $230 million—actually, there have been a couple of agricultural businesses. One a few years ago ticked over well over the $230 million, but that was bought locally, so it did not matter. Obviously the $230 million does not really come into play when it comes to agricultural properties. It all depends on the level you are talking about. The top end, the big corporate places, if they go to foreign investment you may see that, but once you come back under that you are not going to see a lot of it. Should that level be changed? As I said, I do not think it hurts to know what is going on. At that level, we are not going to know what is going on, and obviously do not.

Senator XENOPHON —Isn’t there a consequence, though, that if the $231 million threshold does not really come into play—it would virtually never come into play in the Australian agricultural environment—what is the point of having that threshold at all? How is it effective? Mr McElhone, do you want to say something?

Mr McElhone —These are the questions that we have to answer. What is the point of changing the threshold? What results are you going to get from that? That is what we really want to discover through this whole process. As well, as Jock has acknowledged, there is a lot of complexity behind this issue. There is the differentiation between foreign investment and state owned foreign investment; there is the ownership versus control issue; there is the issue of not just agricultural land but the second tier, the processing side and the bottlenecks in the supply chain. At the same time, we realise that, regarding changing existing thresholds or policies, you do not want to get a perverse outcome of setting up a new level of bureaucracy that overhangs, adds costs and deters investment. So we have to look at all these things, and that is why we are taking a very cautious approach to this.

Senator XENOPHON —I have three more questions. I am conscious of time. Firstly, we heard at evidence earlier today from the New Zealand Overseas Investment Office about their threshold. They have 75 to 100 applications a year. A lot of them are turned over within 15 working days and some take as long as six months. There is a two per cent rejection rate, subject to judicial review. They have had four or five judicial reviews in the last few years. The investment office’s decisions have all been upheld. What have you heard from your New Zealand colleagues, your brother or sister organisation in New Zealand, in terms of the effectiveness of their foreign investment regime, which is completely different from ours in the way they approach things? How has that impacted on farming, confidence and the like?

Mr McElhone —We have not had any feedback at this point from our New Zealand counterparts.

Mr Laurie —We could find out for you.

Senator XENOPHON —It would be interesting. Obviously, we probably should hear from them directly, but it seems to have been quite a transparent system. Secondly there was a question that Senator O’Brien asked earlier and he has had to rush off to get a flight. He made the point: do you treat farming land differently compared to, say, a mining interest because mining is a finite resource which, if there were a greater concentration of foreign investment, you could always use compulsory acquisition powers to take that land back. Do you have a view on that at all? Again I am just trying to fairly paraphrase Senator O’Brien’s question.

Mr Linnegar —I can understand what you are saying.

Senator XENOPHON —What Senator O’Brien was saying actually.

Mr Linnegar —I think that comes back to what we mention in the submission with regard to some of the policy settings more generally. Let’s not treat the results of the review we are looking at in relation to this issue in isolation to other government policies. Food policy is clearly one that needs to be considered. Senator O’Brien is probably referring more to the issue of various land uses there. In order to answer the question about whether agricultural land ought to be treated differently, we need to understand from an Australian perspective where we are wanting to go in terms of food policy for a start. You heard Jock mention before that around 60 per cent of what we produce is exported. Does that mean we only look after the food needs of this nation? I think the answer to that is ‘no’.

Senator XENOPHON —I do not think anyone is suggesting that.

Mr Linnegar —In order to understand the question about treatment of one type of land versus the other we need to understand where the nation is going in terms of food.

Senator XENOPHON —My final question relates to the review that is being undertaken by the Australian Bureau of Statistics and ABARES, working separately but with some overlap. What input has the NFF had into it because the concern I and, I think, others may have is that the quality of the information being gathered may be questioned in some cases as to how deep they are going in looking at who owns what land, and look behind trusts. Do you look at the issues, as Senator Heffernan has raised, as to whether or not a state owned enterprise has been guaranteed by sovereign wealth funds, so you could argue de facto control? What input have you had? What concerns have you got that this audit, this survey, will be robust and give us useful information?

Mr Laurie —The information has to be right. It is a total waste of time if we do all this work and it really does not relate to anything. If we get to a position where Australians actually want to start setting some policy, we need to get it right. As far as going through and having a look at the depth that you are talking about to make sure that we get that right then obviously we have not had any discussions with them at this stage.

Mr McElhone —In terms of the parameters up front we have discussed some of the things that we have talked to you about today, the ownership versus control, the state owned versus the foreign ownership and the importance of transparency in the price-setting arrangements. It has been more about the broad parameters that we are keen to see through this whole process.

Senator XENOPHON —On notice, can you let us know how you go with that. I am concerned that you have not seen the methodology.

Mr Laurie —I do not think anybody has really seen enough. We certainly have not seen enough apart from general discussions but that is about as far as we have got.

Senator XENOPHON —If you have not seen enough of this survey then I am concerned.

Mr Laurie —We will go through it and find out. We will get the stuff from New Zealand for you too.

Senator XENOPHON —Thank you.

Senator EGGLESTON —My thoughts go to international comparisons again. We spoke earlier about Canada, the United States, Brazil and maybe Argentina as countries we could look at. There are other countries, such as Indonesia and, I think, Switzerland, where foreigners cannot own land. That is an interesting dimension to this as well. We quite freely permit foreigners to buy land in Australia. I do not think we have ever considered that it was a bad thing. Senator Heffernan and others have raised some issues about sovereign wealth funds and countries to our north which may need food in the future but, as I said, some of those countries do not permit foreign ownership. That is another dimension to this, which I would be interested in comment upon from these witnesses. Do you think that exclusion of foreign ownership, or limiting foreign ownership, as is proposed in this legislation, could achieve useful purposes? The limitation in this particular bit of legislation is very low, though, I must say.

Mr Laurie —We stated earlier that foreign investment has been an important part of the development of agriculture in Australia over a long period of time. I think you can go right back. There is a good example with the investment of the Japanese in the feedlot sector and the processing sector in the sixties and seventies. There have been some very good opportunities there. When we are having a look at agricultural land, there has always been foreign investment in agricultural land in one form or another. Some of it might have been Australian managed companies with foreign money put in. Getting a good understanding of where that ownership is is the real issue, and then how we manage the produce that is coming off those properties. If this review is done and we can actually get some clarity in those areas, it will make it far easier to start to draw up some parameters that people would see as being acceptable. At the moment and over the many years of investment in Australia there have not been any great issues, but it is certainly being questioned by the Australian community now, so I do not think it hurts to take that next step to get a clear understanding and then have a discussion about what level of investment you see as being reasonable or whether, as you are suggesting, you do not have investment at all.

Senator EGGLESTON —I am not suggesting that. There are alternatives. Leasing is an alternative. In other countries, like the UK, land is leased quite often. Would that be a solution in this situation, where foreign investors may not be permitted to have a freehold title but they could have a lease for 99 years or 50 years or 30 years? Do you feel that would be a way of controlling the kind of problem which seems to be alluded to in this inquiry?

Mr Laurie —There is a lot of leasing that goes on in Australia as we stand now. How much of that is being done by overseas countries I do not know. It is a mechanism that is in the agricultural industry. It could well continue. But, once again, we have not had a look at what the parameters should be. As far as we are concerned, we need to get that information.

Mr McElhone —Just picking up on that, you are alluding to there being a problem already. All we are saying is: let’s have a look at this more closely before we actually pre-empt whether there is a problem that we need to address. Therefore we are very cautious about going down the path of making broad recommendations upon whether you can only lease land or you cannot own agricultural land up to certain amounts. We want to go to that process and do it pretty thoroughly before jumping to any conclusions.

Mr Linnegar —In terms of the concerns we have raised before, they have not been necessarily about the foreign ownership itself but rather what is happening with the land that is owned. Is it a commercial, profitable enterprise that these foreign owners are entering into or is it about underpinning food security in other countries? That is more of our concern. Is that concern alleviated by whether they own the land or lease the land? I am not sure, but I doubt whether it would have a huge bearing. We are more concerned about those issues of food security versus being a commercial, profitable venture.

Mr McElhone —In terms of some of the concerns that have come through our membership, we have got to remember that probably one of the greater ones was within the sugar supply chain. That raised the issue of transparency in the price-setting arrangements. It was not about agricultural land at all. It was more about that through-chain supply network. They wanted to make sure that whatever the purchase, whether it be from foreign or domestic entities, it still maintained that transparency in the price setting and facilitated competition in the marketplace. Some of those issues are quite consistent, regardless of foreign or domestic ownership.

Senator COLBECK —I want to clarify a question that Senator Xenophon asked. You said that you have had some conversations with the government on the current information-gathering process that they are undertaking. Were you actually consulted on the terms of reference?

Mr McElhone —On the terms of reference, yes, we were consulted.

Senator COLBECK —Is the NFF position on foreign investment what your submission to that process was?

Mr McElhone —Largely, yes. We developed this position well before this process actually began.

Senator COLBECK —In the body of what you have given us you mention state owned enterprises entering the market. What evidence do you have of that occurring in the Australia context?

Mr McElhone —Not so much on the land side at all. We do not have evidence of that. Really, where this comes from is the food price spike in 2007-08. The FAO did a lot of work around that time and looked at the whole state owned enterprise foreign investment trend around the world. They particularly looked at the African nations; obviously we are facing a whole different set of factors here. We just said, ‘Listen, with this happening around the world it is prudent for us to start looking at some of the issues around this.’ Do we have evidence of large state owned enterprises taking over a broad stretches of land? No.

Senator COLBECK —We heard this morning from our New Zealand friends about their process and we are all pretty much aware of what that is. They have an approval process but they have no register, because information changes so quickly. It may be that we would not experience anything much different to that, because information dates so rapidly. The process that we are going through now is probably going to be a snapshot in time that will give us a picture of where we are now. The question is what we do to maintain a level of understanding of that, whether we alter the levels of FIRB from $231 million or set some other parameters around it. Your position at the moment would be, in my words, that you are content that there may be a need to put some parameters around investment in land, or controls on the market for agricultural land, but you are not yet content with where those are or what they might look like, because we do not have sufficient data to make that decision.

Mr Laurie —Pretty well, that is about it—spot-on, I think. As I said earlier on, it does not hurt to know what is going on, and if this is just a snapshot in time and you need to continue to update that then you need to find a process to allow that to happen. But I think it is very difficult at the moment for us to sit down and say where that dollar figure should be. Whether it should be on a land based thing or whether it should be on a dollar based thing I think is very difficult to know. There is debate and, as Charlie said, some of the food spikes generate real interest because all of a sudden that is what we have got the capacity to do. They do generate real interest around the world. For that reason, it is very important that we have an understanding. But where that figure is, where that land size is or whether you look at where the investment is in the secondary industries—that is the thing.

There is a real concern in the secondary industries about losing competition. Our industry at the moment would see more concern in that industry then we would see in the other, because it is a losing competition. The competition is the thing in the free market that allows our industry to grow, develop and be competitive. If we get mechanisms in there and we start to lose our competition, it is a worry for us. As Charlie stated just a minute ago, we do not see any major problems in agricultural land at the moment; but people are certainly talking about it. But certainly the next step up is where we see the need to have a really good understanding about what that is and what the impact of those investments is going to be.

Mr McElhone —Can I just add, Senator, because you raised some very good points there, that we have got to make sure that whatever we do in this space does not lead to more confusing outcomes than where we started. It is all well and good to say, ‘Listen, let’s start an agricultural land register now,’ but, unless we are making that differentiation about the type of land ownership, under what basis it is and the other factors we have talked about today, we can get a bit of a skewed result. We just have to be careful about those things.

Senator COLBECK —There was an interesting revelation this morning from New Zealand that, despite the fact that they have an approvals process, they do not maintain a register because of the movement in the data. So it might be that we come through this process and make a decision to include this information-gathering process at a five-yearly cycle, for example—

Mr Laurie —Where are they talking about the movement in the data?

Senator COLBECK —The example they gave us was of an American coming in and buying a farm, going through the approval process and then taking out New Zealand citizenship—there is no change in ownership. That was one example they gave us this morning of the sorts of things that can occur.

Mr Laurie —Every time there is a sale of a property that would be registered, but, when you get a change of citizenship, that is another matter.

Senator XENOPHON —I would like to hear from you with those questions on notice in terms of the interaction of these surveys, because if the surveys have a weak foundation they are not going to be much good to us.

Mr Laurie —Yes. I think it is important that we get a good, comprehensive view and understanding of all the information and then figure out the best way forward. We will have a look at it.

Senator XENOPHON —So you can split the difference between five and 231 million hectares—however you would do that!

Mr Laurie —There would be a strong debate about that!

CHAIR —Thank you to the Farmers Federation for coming in this afternoon and for assisting us.

Committee adjourned at 3.47 pm