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Statement on decision to prohibit the 99-year lease of 50.4 per cent of Ausgrid under current proposed structure



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The Hon. Scott Morrison MP Treasurer

MEDIA STATEMENT

Friday 19 August 2016

STATEMENT ON DECISION TO PROHIBIT THE 99-YEAR LEASE OF 50.4 PER CENT OF AUSGRID UNDER CURRENT PROPOSED STRUCTURE

I have today made an order under the Foreign Acquisitions and Takeovers Act 1975 (the Act) prohibiting the proposed acquisition by foreign investors for the lease of 50.4 per cent of Ausgrid, the New South Wales electricity distribution network.

After due consideration of responses from bidders to my preliminary view of 11 August 2016, I have decided that the acquisition by foreign investors under the current proposed structure of the lease of 50.4 per cent of Ausgrid, the New South Wales electricity distribution network, would be contrary to the national interest. This is consistent with the recommendation from the Foreign Investment Review Board.

In making this decision, national interest concerns have been paramount. They relate to the transaction structure as currently proposed and the nature of the assets.

The Australian Government has worked very closely with New South Wales to ensure that they are aware of the concerns. We will continue to work closely with New South Wales to ensure that national security requirements are met under any future transaction process.

The proposed 99-year lease of 50.4 per cent of Ausgrid forms a part of the New South Wales Government’s plan to unlock capital to fund investment in new infrastructure across the State. The Australian Government continues to support the New South Wales Government’s plan in this regard.

Australia welcomes foreign investment where it is not contrary to our national interests.

Foreign investment has underpinned the development of our nation and we must continue to attract the strong inflows of foreign capital that our economy requires. Without it, Australia's output, employment and standard of living would all be lower.

Foreign investment rules facilitate such investment while giving assurance to the community that the investment is being made in a way which ensures that Australia's national interest is protected.

Further information: Julian Leembruggen 0400 813 253, Kate Williams 0429 584 675