- Australia is among some of the most restrictive countries in the world in regards to foreign direct investment, ranking 11th after the Philippines, Kyrgyzstan, Korea, France, India.
- 52,602,000 hectares of Australian farmland is foreign-owned.
- 13.4 per cent of Australian farmland is foreign-held.
- 16.4pc of WA farmland is foreign-owned.
- 92.1pc of WA foreign-held farmland is leasehold.
- The United Kingdom is the foreign nation which owns the most Australian farmland (10,239,000ha), followed by China (9,169,000ha), and the United States (2,655,000ha).
- Data: Organisation for Economic Co-operation and Development, 2018; Australian Taxation Office FY2017-18.
CHANGES to the Australian foreign investment review framework could result in property sales involving an overseas or overseas-backed buyer being delayed by up to six months.
Last month, the Federal government announced it would temporarily reduce the monetary threshold of foreigner's cumulative investments, which were intending to invest in Australian agriculture, from $15 million for farmland and $60m for agribusinesses to $0 for both.
Although some exemptions apply, generally speaking until the current crisis brought on by the COVID-19 pandemic is over, most purchases of agricultural land and businesses will be scrutinised by the Foreign Investment Review Board (FIRB).
The increased volume of applications to now be screened by FIRB will mean the approval process could take up to six months, as opposed to 30 days in the previous framework.
Ray White Rural WA principal Steve Vaughan, who handled WA's most valuable broadacre farm sale of Erregulla Plains which was purchased by Canadian-backed Daybreak Cropping for $97.62m in February, said these amendments were likely to have an impact on the rural property market, despite the fact that the market was expected to remain relatively resilient throughout the pandemic.
"Anything that slows the whole process down will most likely impact on the market," Mr Vaughan said.
"It will impact on sellers as they won't be keen to take on board something that might take up to six months; had it been 30 days like it used to be, it was similar to being subject to finance so it was all on the same playing field as (selling on) the local market would have been, but going out to as long as six months will surely have an impact."
Mr Vaughan said the prolonged process could make investing in Australian agriculture less appealing to overseas parties.
The government's aim is that the increased restrictions will provide greater security and protection from vulnerable and distressed farmers or businesses who have been forced to sell due to the pandemic and that farmland or agribusinesses will not be snapped up by opportunistic overseas buyers.
But seeing as most WA farmers and agricultural businesses are in relatively stable financial positions after a series of good seasons and strong commodity prices, coupled with a positive start to the 2020 season, it's unlikely that there would be much opportunity for foreign investors to benefit from struggling farmers wanting out, especially compared to other States.
Mr Vaughan said local buyers were dominant in the WA market and that overseas buyers were a larger part of the market about five years ago.
"We definitely need foreign investment and they are there to pick up the larger end of the market," he said.
"In the current climate, (Ray White Rural WA) are selling properties very quickly to local buyers; the overseas buyers are not even getting a look in, irrespective of the changes to the foreign investment rules."
Federal MP O'Connor Rick Wilson said while he supported the government's changes to the framework, he hoped the smaller scale sales involving family and individual farmers would be processed more quickly than larger or higher value properties.
"One would hope that FIRB will deal with the smaller family-type sales under $15m in a timely fashion and I hope
