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Monday, 23 November 2015
Page: 8687

Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (20:25): For the reasons previously outlined during the debate, the government opposes this amendment. We think that the $15 million proposed screening threshold for FIRB purposes is the appropriate threshold for agricultural land.

In relation to the other amendments, which Senator Xenophon has not moved yet but appeared to be speaking to, in relation to enshrining national interest in legislation, the government also opposes inserting the national interest criteria within the legislation. National interest is already set within policy and does not need to be embedded within the legislation. Legislating the national interest test may weaken the foreign investment regime. Currently the Treasurer may take into account any factor he deems relevant to whether an application is in the national interest.

The foreign investment framework strikes an appropriate balance between maintaining community confidence in foreign investment by protecting the national interest and ensuring that Australia remains an attractive destination for foreign investment by providing certainty for investors. Consistent with this objective, the government reviews foreign investment proposals on a case-by-case basis, to ensure they are not contrary to the national interest. The case-by-case approach is a fundamental part of the foreign investment framework here in Australia, because the national interest can change over time.

A codified national interest test with a rigid set of criteria would be inflexible, prescriptive and require ongoing revisions or additions. Further, it might expose the government to the possibility of judicial review of foreign investment decisions as well as provide an additional avenue for opponents of an investment to challenge it and hence undermine investor certainty.

In practice, the government typically considers a range of factors when assessing foreign investment proposals, including national security, competition, taxation, impact on the economy and the community and the character of the investor. These are outlined in the policy to provide sufficient guidance to applicants but sufficient flexibility to protect the national interest. A relevant updated policy document will be released prior to 9 December, to reflect the reform package.