FDI plan a 'red tape nightmare': ALP

17 Feb, 2015 01:00 AM
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Prime Minister Tony Abbott with Hume MP Angus Taylor on the Hodgkinson farm, “Vale View”, Murrumbateman, NSW.
This kind of scrutiny is critical to making sure Australia makes informed and strategic decision
Prime Minister Tony Abbott with Hume MP Angus Taylor on the Hodgkinson farm, “Vale View”, Murrumbateman, NSW.

AGRICULTURE Minister Barnaby Joyce says new rules to increase transparency on foreign investment in agriculture could be torpedoed by the Labor Party.

But the Greens say they support the government’s new transparency move and are open to amendments that may increase the scrutiny mechanisms further.

Farm groups widely praised Prime Minister Tony Abbott, Treasurer Joe Hockey and Agriculture Minister Barnaby Joyce for finally declaring their election promise on foreign investment was forging ahead last week.

Spearheaded by Mr Joyce, the Coalition regularly raised concerns from opposition about escalating foreign direct investment (FDI) in agriculture occurring in a vacuum of accurate data and the absence of a long-term industry strategy.

In defending delays in the register’s implementation, Mr Joyce said trade agreements signed with Japan, Korea and China have abided by the government’s basic FDI policy settings.

That being: $15 million for individual land purchases, $53m for agribusiness, and $1 for State-owned enterprises to attract Foreign Investment Review Board (FIRB) scrutiny.

New FDI regime

Last week, Mr Abbott announced the threshold at which foreign purchases of agricultural land would require FIRB screening would drop from $252m to $15m from March 1. The new $15m threshold will apply to the cumulative value of all Australian agricultural land owned by the foreign investor.

The government will also establish a register tracking foreign ownership of agricultural land to provide a clearer picture of FDI in Australia’s farming sector.

Mr Joyce told Fairfax Media the new scheme marked a clear difference between the Coalition government and Labor, which didn’t support lowering the FIRB trigger from $252m to $15m.

“Labor believe a person can go around basically buying $240m worth of property every day of the week, but it is a huge issue,” Mr Joyce said.

Mr Joyce said once the proposed laws passed the House of Representatives they could still get knocked down by the ALP in the Senate.

“The Labor Party has said they’re going to oppose it,” he said.

“In the past we were left with this ridiculous scenario where someone could go to the north of Yass and buy $240m worth of land one day, then go to the south of Yass and buy another $240m of land the next day, then go to the west of Yass and buy another $240m ... and never have to go to the FIRB.

“Now, there’s only one group in Australia who still believes that that’s a logical place to be - and that’s the Australian Labor Party."

Labor supports register: Fitzgibbon

Shadow Agriculture Minister Joel Fitzgibbon said his party supported the register, first announced by Prime Minister Julia Gillard in October 2012.

But in last week’s “re-announcement” of the register, the National Party’s commitment to “increase red tape on investment in agribusiness got no mention at all”, he said.

“Labor supports moves to increase transparency in Australia’s foreign investment regime - that’s why the former Labor government moved to establish a register of foreign-owned agricultural land.”

But Mr Fitzgibbon said lower thresholds on agricultural land would be “a red tape nightmare” for potential investors and risk driving investors elsewhere at a time Australian agriculture is “hungry for capital”.

A long way to go: Greens

Greens leader Christine Milne said the FIRB changes were a step in the right direction, “but there's a long way to go if Australia is serious about protecting our food future”.

She said there needed to be an outright ban on the sale of agricultural land and water licenses to wholly-owned subsidiaries of foreign governments, and a much more stringent national interest test.

“The Greens have long been calling to drastically reduce the threshold for the national interest test to $5m, so the new $15m threshold down from $252m is a welcome move from the government,” she said.

“There has been cross-party support for a national register of foreign owned agricultural land since 2012."

She said water assets should be included in the register's stocktake as well.

“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.”

Government needs to explain: Taylor

Liberal Hume MP Angus Taylor said the government needed to explain the proposal to the crossbench to help secure their support, to avoid the new laws being voted down in the Senate.

“We will, as always, need to talk to the crossbenchers in the Senate about what the changes are and why they should support them,” he said.

“If there’s one thing we’ve learnt in the last 12 months it’s that we need to bring the crossbenchers along with us.

“We all know that transparency will help, not hinder, so whatever your views are on foreign investment in agricultural land, we can all accept this is a good thing to do.”

Mr Abbott said the government would have more to say about new rules for tighter FIRB scrutiny for agribusiness in the weeks ahead.

“The national interest test is a very broad-ranging test,” he said.

“It's not often that we knock applications back, but nevertheless, it is important that we ask ourselves the question: is this in the overall national interest?

“And this could embrace things like does this involve more jobs, does this involve more tax revenue, does this involve better utilisation of our country for Australia's benefit as well as for the benefit of the foreign investors?”

Mr Hockey said the Foreign Investment Act was very clear about foreign investment rules, giving the Treasurer discretion to disallow any investment contrary to the national interest.

“Now, the most celebrated, if you like, knockback under FIRB rules was, obviously, ADM's investment in GrainCorp,” he said.

“As the Prime Minister said, this is about the national interest and we are in a far more dynamic world and at times we're going to be tested and, obviously, foreign investment is one area that we need to be ever vigilant in.”

He said there would be some regulation offsets involved in the changes.

“The FIRB process is actually quite a complicated process and it's quite an expensive process for the government to run,” he said.

“We'll have more to say about that in the next few weeks.”

Profits at the farmgate

The announcement on tighter foreign investment scrutiny was made on the Hodgkinson farm, “Vale View”, Murrumbateman, NSW.

The fifth-generation mixed farming property runs Merino sheep, cattle and cropping operations.

Mr Taylor said the farming family based in his electorate were “typical of Australian agriculture and what’s made it great”.

“A family that first came here in the 1850s, they’re still here farming passionately, farming with great energy, and they understand, as I do, that we are seeing extraordinary opportunities in agriculture opening up at the moment and central to that has been the policies of this government,” he said.

“I have never seen a turnaround in any market like we saw in the cattle industry in the last couple of months, and we know that our policies are absolutely central to that.

“We have re-established markets that were destroyed and we’re opening up new markets - and that’s what the government is all about.”

Mr Joyce said farmers were achieving record prices for sheep and cattle, great prices for cotton and strong prices for grain.

“The reason why we are having such a strong soft commodity market is because of the seasons, is because of a low cow number and is because of the actions of this government,” he said.

“This government, which has made it its goal to have three free trade agreements going, to make sure that we actually get the live export going, that opened six markets last year.

“When people say to me: ‘What difference does Tony and Joe make?’ I say: ‘Go to the saleyards, have a look, there’s your difference’.

“And that’s a difference that you can put in your wallet, fold it up and bring real dignity back through the farmgate and back to the house.”

FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

wtf
17/02/2015 2:16:31 AM

Joel, I think you are confused on what good investment is. A land grab, by a non accountable govt is not good investment, its a monopoly shunting new entrants out of the market. Don't u think the interests of Australians and the ability for succession in an industry come ahead of the Chinese govt?
HNAVvaluer
17/02/2015 11:03:07 AM

Foreign ownership of Australian ag land is a totally separate issue to foreign investment in Australian ag. Australia must be in control of its core asset, the land, the fabric of our wealth and must have a clear picture of who owns what and how much. Foreign investment in ag is and will continue to occur as Australian corporation use overseas capital to fund acquisitions. Can you imagine a foreign purchaser of a farm, employing his country men and sending produce home. Where is the value in that for Australia? No, we need to be in control of our land and how it is used.

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