THE federal government has agreed to establish a register of foreign owned water entitlements in a deal with the Greens that will see new regulations on foreign investment scrutiny pass the Senate.
Labor had sought amendments to the Foreign Acquisitions and Takeovers Legislation Amendment Bill, to lower the Foreign Investment Review Board’s (FIRB) threshold for foreign land acquisitions from $252 million to $50m.
But the deal struck today allows the Coalition to retain its policy commitment to implement a $15m threshold on farmland proposals, to be applied accumulatively, while setting FIRB scrutiny on foreign agribusiness proposals at $55m.
Greens Leader Richard Di Natale said his party had long been calling to drop the trigger for the FIRB’s national interest test down to $5m but was pleased the government had agreed to cut the trigger from $252m to $15m.
He said it was “a significant step in the right direction”.
“We’re extremely proud to have a commitment, written into the legislation, that the government will establish a register of foreign owned water entitlements, in addition to the register of foreign own land that we passed earlier this month,” he said.
“As global warming and extreme weather events disrupt food production worldwide it's critical that we view Australia's agricultural land and water as key national assets, not to be sold off recklessly.”
Greens finance spokesperson Senator Peter Whish-Wilson said his party had not only secured a water register but had also secured a government commitment to review the inclusion of water asset sales in the foreign investment review framework.
“In a climate constrained world, agricultural output is about water just as much as it is about land - the two go hand-in-glove,” he said.
“What the Greens have achieved today is a significant win for transparency and oversight in how Australia manages our land and water.
“This kind of scrutiny is critical to making sure Australia makes informed and strategic decisions about our land and water resources, especially as global warming impacts on food availability and prices.”
A letter from Treasurer Scott Morrison and Agriculture and Water Resources Minister Barnaby Joyce was also distributed to media which confirmed the deal with the Greens and was co-signed by Senator Di Natale.
The letter said the Bill before the Senate provided an opportunity to strengthen the nation’s foreign investment framework to balance the changing business landscape and community expectations whilst ensuring Australia remains an “attractive destination for much-needed foreign investment”
In exchange for ensuring the Bill’s passage through the Senate, the two cabinet ministers agreed to the Green’s amendment, which introduces a sunset clause to the Register of Foreign Ownership of Agricultural Land Act 2015 to be triggered if the government hasn’t passed legislation to introduce the water register, within 12 months.
The government also committed to commencing a process for developing an implementation approach, involving full public consultation to address technical issues.
The government said it was also committed to undertaking a review of the treatment of water under the foreign investment review framework, once the register was implemented and data was made available on the level of foreign ownership of water entitlements.
The Green’s agreement is expected to see the foreign investment scrutiny reforms start on December 1.
The Bill is expected to pass the Senate later today with support from the Greens and Coalition.
Earlier this month, the Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 and Register of Foreign Ownership of Agricultural Land Bill 2015 both passed the Senate after being introduced, after passing the House of Representatives in September.
The Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 introduces fees on all foreign investment applications from December 1 this year.
During debate, Coalition Senator Nigel Scullion said fees on foreign investment applications would ensure Australian taxpayers were no longer funding the system’s administration, while providing additional resourcing to Treasury and the Australian Taxation Office to improve service delivery for investors.
Senator Scullion said the Register of Foreign Ownership of Agricultural Land Bill 2015 established a foreign ownership register to be operated by the ATO.
“Foreign investors are required to register essential information about their existing holdings and subsequent acquisitions of Australian agricultural land, providing greater transparency around foreign investment in agriculture,” he said.
“These changes are about welcoming essential foreign investment that is not contrary to our national interest - investment that strengthens Australia's economy, creates new jobs and unlocks innovation.”