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Foreign investment in Australia



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TREASURER

N O . 39

EMBARGO

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP ·

FOREIGN INVESTMENT IN AUSTRALIA

The number of foreign investment proposals examined by the Foreign

Investment Review Board and decided by the Government during the

December quarter 1980 remained at a high level.

In the December quarter, 316 proposals were decided; this was 17 per

cent higher than the number decided in the previous quarter and 14 per

cent higher than the quarterly average figure for 1979-80. :

The total expected investment foreshadowed in foreign investment

proposals that were approved in the December quarter was

$1,687 million; this compares with the quarterly average for

expenditure on proposals in 1979-80 of $1,452 million. The expected

expenditure associated with approved proposals.for acquisitions of

businesses operating in Australia increased to $1,201 million, while the

expected expenditure associated with new business proposals rose to

$486 million.

Recent experience has shown that the statistics of foreign investment

proposals may be subject to fluctuation from quarter to quarter and may

be significantly influenced by approvals given to particularly large

projects. The statistics are not, moreover, a record of the expenditure

that is expected to occur in a particular quarter; a better indicator

of actual expenditure is given by the data relating to foreign

investment inflows. Preliminary data for the· December quarter 1980

indicate that inflow of foreign investment in enterprises was at a

record level.

The statistics regarding foreign investment proposals are a record of

the intentions of foreign interests, as indicated in their submissions

to the Government, regarding investment in Australia at the time

approval is granted. As such, a number of qualifications must be - ­

attached tc the statistics. In particular, the proposed actions and

expenditures of foreign investors may not always be realised.

The amount of expenditure ultimately realised:in respect of particular

proposals may be spread over several years and, in respect of mineral

development, may be dependent upon successful exploration and the

completion of feasibility studies. Moreover, some of the expected

investment represents the contributions by Australians to projects in '

which they are in partnership with foreign interests.

3

While caution should, therefore, be exercised in using these statistics

as a measure of the overall level of current'foreign investment activity

in Australia, they provide a reasonable indication of the trend over

time of the underlying degree of interest, by foreign investors.in the

Australian economy. The December quarter results, viewed in conjunction

with those for the previous few quarters, indicate that foreign investor

interest in Australia is continuing at a high level.

Details of the December quarter 1980 statistics are in the attached

tables.. Table 1 shows the number of proposals dealt with in the

December quarter, the numbers approved, rejected and not requiring

approval and the amount of investment foreshadowed in these proposals.

Tables 2 and 3 provide details of proposals considered by the Government

since the Foreign Investment Review Board was established.

CANBERRA ACT

18 March 1981

TABLE 1

FOREIGN INVESTMENT PROPOSALS , 1 OCTOBER 1980 TO 31 DECEMBER 1980 ·

TYPE OF PROPOSAL NUMBER AVERAGE

PROCESSING ' TIME

(days)

PAYMENTS FOR ASSETS

($m)

EXPECTED NEW INVESTMENT

($m)

TOTAL EXPECTED INVESTMENT(a)

($m)

Approved without conditions: Acquisitions (b) 195 20 . 452.6 73.9 526.5

New businesses 4 27 ' - 81 .0 81.0

Conditionally approved: Acquisitions (b) 101 24 314.8 359.4 674.2

New businesses (c) 3 . 151 - ' 405.0 405.0

TOTAL APPROVED(a) · 303 . 23 767-4 919.4 1,686.7

Rejected: . Acquisitions(b) 12 29 21.2 87.4 108.6

New businesses 1 29 — 300.0 300.0 .

TOTAL DECIDED 316 23 788.6 1,306.8 2,095.3 ,

Not requiring approval under Act or policy Withdrawn 133.

18

(a) All amounts are rounded and discrepancies may occur between sums of the component items and totals. (b) Proposals falling within the ambit of the Foreign Takeovers Act and proposals for the acquisition of real estate that were dealt with under the real estate policy. (c) These proposals required lengthy consultation with the parties and other Government agencies

before the Government was in a position to make a decision. ·

TABLE 2 .

FOREIGN INVESTMENT PROPOSALS, 1 APRIL 1970 TO ?/! DECEMBER 1960 NUMBER OF PROPOSALS PER QUARTER

TYPE OF PROPOSAL 1976-77(a)

‘ (QUARTERLY AVERAGE)

1977-78 (QUARTERLY AVERAGE)

1978-79 (QUARTERLY AVERAGE)'

SEPTEMBER 1979 DECEMBER 1979 ‘

MARCH 1980

JUNE 1980

SEPTEMBER 1980 DECEMBER 1980

Approved without conditions: Acquisitions (b) 135 187 145 181 183 ■ 174 207 156 195

New businesses 3 4 3 3 3 3 3 1 4

Conditionally approved: Acquisitions(b) 81» 74 . 63 60 60 89 94 99 101

New businesses ■ 6 5 9 _ 4 . 9 4 9 2 3

TOTAL APPROVED (c) . 228 269 220 248 255 . 270 313 258 303

Rejected: ·

Acquisitions(b) 1 1 1 2 1 ' 3 6 ‘ 11 12

New businesses ■ ' 1 , 1 - · 1 1 5 · 1 1 1

TOTAL DECIDED (c) 230 271 — 221 251 257 278 320 270 316

Not requiring approval under Act or policy 50 57 42 64 100 102 94 93 133

(a) April 1976 to June 1977 . ' .

(b) Proposals falling within the ambit of the Foreign Takeovers Act and proposals for the acquisition of real estate that were dealt with under the real estate policy. '

(c) All amounts are rounded and discrepancies may occur between sums of the component items and totals.

.TABLE 3

OREIGN INVESTMENT PROPOSALS, 1 APRIL 1976 TO 31 DECEMBER 1980 XPECTED INVESTMENT ASSOCIATED WITH PROPOSALS DECIDED PER QUARTER ($ MILLION)

ΎΡΕ OF PROPOSAL . 1976-77(a)

(QUARTERLY AVERAGE)

1977-78 (QUARTERLY AVERAGE)

1978-79 . (QUARTERLY AVERAGE)

SEPTEMBER 1979 DECEMBER 1979

MARCH 1980

JUNE 1980

SEPTEMBER 1980 DECEMBER 1980 .

pproved without conditions: Acquisitions (b) 106 175 • 270 458 ‘ — 551““ 210 . 181 " 165 527 .

New businesses 362 ' 21 7 16 15 2 6 10 81

onditionally approved: Acquisitions(b) . · I6i4 119 241) 170 205 216 389 449 67*4

New businesses · 88 ■ 433 ' 360 422 2,104 30 , 834 5 ' 405

QTAL APPROVED (c) ■ 721 - 748 ■ 880 1 ,067 2,874 458 1,410 628 1,687

ejected: Acquisitions(b) 1 ' 1 13 • 1 . 1 3 ■ 60 67 109

New businesses 10 2 . 75 23 400 300

OTAL DECIDED (c). 732 ' 750 968 . 1 ,068 2,875 . 484 1,869 695 ‘ 2,095

a) April 1976 to June 1977 . ............ .. . . . .

b) Proposals falling within the ambit of the Foreign Takeovers Act and proposals for the acquisition of real estate that were dealt •with under the real estate policy. c) All amounts are rounded and discrepancies may occur between sums of the component items and 'totals.