SHADOW Agriculture Minister Joel Fitzgibbon has attacked the federal government’s proposed changes to foreign investment regulations, labelling it an elaborate “political stunt”.
Mr Fitzgibbon, Shadow Treasurer Chris Bowen and Shadow Trade and Investment Minister Penny Wong have released plans to amend the government’s Foreign Acquisitions and Takeovers Legislation Amendment Bill that’s currently before the Senate.
Under the proposed amendments, Labor wants to scrap requirements in the Bill for the Foreign Investment Review Board (FIRB) to screen agribusiness investments worth more than $55 million.
They also want to increase the FIRB screening threshold for investment in agricultural land to $50m - up $35m from the government’s proposed $15m.
“The challenge for Malcolm Turnbull is whether he will stand up for an open economy by supporting Labor’s amendments or just be a rubber stamp for the anti-investment barriers concocted by Tony Abbott and the Nationals,” their joint statement said.
The government’s Bill was introduced by former Treasurer Joe Hockey in August and passed the House of Representatives in mid-September.
It aims to strengthen Australia's foreign investment framework, which Mr Hockey said hadn’t been significantly revised since its introduction in 1975 or kept pace with changes in global investment.
He said since March 1 this year, the screening threshold for foreign purchases of agricultural land has been lowered from $252m to $15m based on the cumulative value of agricultural land owned by that investor.
The government has also proposed to introduce a $55m threshold for direct interests in agribusinesses, from December 1, he said.
Mr Hockey also introduced the Register of Foreign Ownership of Agricultural Land Bill 2015 to complement the lower agricultural screening thresholds.
He said on July 1, the government had also established a register of foreign ownership of agricultural land operated by the Australian Taxation Office.
But Mr Fitzgibbon said the foreign investment register was a Labor initiative which the government “still can’t get right”.
He said if Labor was in government “we’d be doing nothing” on foreign investment rules.
“The idea that we should be running a discriminatory foreign investment program is wrong,” he said.
“But what we’ve done now is to try and meet the government half way to say, ‘OK, you say you’ve picked up some community concern about foreign investment in foreign land although it’s only some countries it seems. We can’t accept the $15m – it’s ridiculous – but we’re prepared to meet you somewhere in between’.”
Mr Fitzgibbon said the $50m figure being proposed by Labor to scrutinise foreign land purchases wasn’t arbitrary and aligned with limits set in Free Trade Agreements with Thailand and other countries.
“It will hopefully avoid some of the unintended consequences of a $15m threshold where people who already have substantial interests could find themselves triggering the FIRB process because they’re activated by a $10,000 block of land,” he said.
Mr Fitzgibbon said Labor also believed every business in Australia should be treated the same and “we don’t see any case for treating agribusiness any differently”.
He said the “folly of the whole thing” was that all foreign investment proposals can potentially be scrutinised by the FIRB, regardless of the dollar amount.
“I’ve been deep inside that process including as a member of the National Security Committee,” he said.
“The Treasurer can, at any time, nominate any project he or she likes to go to the FIRB and it doesn’t have to be triggered by the threshold.
“And we as politicians, and indeed the community, know when there’s a controversial matter at hand.
“It doesn’t matter whether (the threshold) is $15m, $50m or $100m or more - the politicians can send it off to the FIRB if they know they need to satisfy community concerns.
“This for me makes the whole thing a political stunt (and) it’s playing on unnecessary fear in the community that somehow we’re being swamped by Asian investment in Australian farming, but that’s not true.”
But federal Agriculture and Water Resources Minister Barnaby Joyce hit back, accusing Mr Fitzgibbon and the ALP of inconsistency on foreign investment policy.
“I have been very interested in some of the iterations which have been coming from the shadow minister for agriculture, like the last one,” he said.
“Once upon a time, they had a $252m limit on foreign investment in land.
“Just lately he moved it to $1000m.
“Now he has reduced it by 95 per cent, back to $50m.
“There is one thing I am absolutely certain about: if we are looking for consistency, we do not look in (Labor’s) direction.”
Mr Fitzgibbon said everything politicians did had to send a signal to the international investment community that “we are open for business”.
He said competition for foreign capital was “intense” and potential investors had options other than Australia, like South America and “many other countries”.
However, if the government erected barriers to foreign investment like a low threshold on FIRB scrutiny, investors “will simply go elsewhere and Australian agriculture will be worse off,” he said.
“Our approach if we were in government would be to make no changes and that would be the best outcome,” he said.
“But what we’ve done here is at least tried to compromise and accepted what we still think is a low figure but one which is certainly better than $15m which is arbitrary in itself.
“And the government has never explained where the $15m comes from; why not $10m or $20m?
“But it’s a ridiculously low figure anyhow, which will have very, very severe adverse outcomes in my view.”