NEW foreign investment rules for agricultural land purchases will choke farm sales in red tape, says DAVID LEYONHJELM.
I'VE met plenty of farmers my age who are thinking about and planning for the end of their farming days.
Some have succession plans with family members. But many don’t, and their plan is to sell. They’re not sentimental but they have a strong connection with their land, and they know its worth.
They also need to sell at a fair price. They’ve got debts to repay before funding their retirement. After a lifetime of investing in the farm, their superannuation nest egg doesn’t compare with those who have been ‘pay-as-you-go’ employees all their life.
The potential outcome of one who has decided it’s time to sell goes as follows.
“April comes along. Then May. All other bidders fade away...”
The property is listed with an agent and there is the usual marketing campaign, but buyers are thin on the ground. The best offer is from an unenthusiastic neighbour - a couple of million, which everyone knows is too low.
Just as hope begins to fade, a potential buyer comes in for an inspection. The buyer knows his way around a farm — he owns a couple of them already. He’s thorough and impressed with what he sees. He speaks with an accent which you recognise as South African. As he leaves he mentions a price twice the size of the neighbour’s offer, close to the owner’s own valuation. He’ll be in touch.
But then the first of March comes along, and our South African bid gets stuck in bureaucracy.
Barnaby Joyce, Tony Abbott and Joe Hockey have announced that, from the first of March, this bid needs to be ‘screened’. The reason is that if the purchase went through, the value of the agricultural land owned by the South African would add up to $15 million.
April comes along. Then May. All other bidders fade away.
June comes, and still no word from the bureaucrats responsible for the ‘screening’.
Then in July, the South African runs out of patience. He needs to get on with business and withdraws his offer.
Barnaby Joyce and his colleagues say ‘job done’. To them, such a result means ‘investment is coming in on our terms and for our nation’s benefit’.
The farmer seeking to sell his farm knows it hasn’t done him any favours. But he also struggles to see how the result is for our nation’s benefit.
He cannot even imagine what the bureaucrats have been doing. What factors could they possibly consider to distinguish foreign farm purchases that are good from foreign farm purchases that are bad? How can these factors be sensibly considered anyway? After all, the relevant bureaucrats are economists in the Treasury Department in Canberra.
If investment must be ‘on our terms’, what exactly are those terms? A lot of ageing Australian farmers will be hoping somebody knows.
And I suspect it won’t help to ask Barnaby.