INDEPENDENT SA Senator Nick Xenophon has succeeded in establishing an urgent Senate inquiry into foreign investment and whether the national interest test has been applied correctly on big controversial deals.
Senator Xenophon said a motion passed the Senate yesterday to open the inquiry that will now examine controversial foreign investment deals, including the 99-year lease of the Port of Darwin to a foreign company.
It will also look into last week’s blocking of the S.Kidman and Co sale by the Federal Treasurer and could include other recent decisions linked to agriculture such as the blocking in late 2013 by the Abbott government of the proposed $3.4 billion sale of GrainCorp to US multinational food giant Archer Daniels Midland.
Senator Xenophon said the Senate Economics References Committee inquiry’s terms of reference provided for a “sweeping look” at the Foreign Investment Review Board (FIRB) and national interest issues and is due to report by February 4 next year.
The motion was co-sponsored by Senator Xenophon with support of other cross-bench Senators and the Greens and Labor.
“There’s a real sense of urgency with this inquiry, given concerns that our current foreign investment framework is full of loop holes - particularly in relation to State and territory assets - and a lack of clarity of the national interest test and how it applies,” he said.
“This inquiry will give a timely opportunity to deal with these issues.
“In particular, the Port of Darwin deal deserves special scrutiny, given concerns expressed by our key strategic think tank, the Australians Strategic Policy Institute over the deal.
“The details emerging around the Darwin deal shows what a shambles the whole process has been. How on earth this deal got waived through without due process is beyond most Australians.”
But Victorian Liberal Senator Scott Ryan said the government opposed the motion which established the Committee inquiry.
Senator Ryan said the government was confident that due processes set by the existing foreign investment framework had been followed with respect to recent significant transactions involving foreign investors.
He said in respect of these transactions “we are confident relevant agency consultation has occurred”.
“The Coalition is acutely aware of the sensitivities regarding foreign investment, strategic national assets and critical infrastructure,” he said.
“The government is assessing options to strengthen the federal government's ability to protect the national interest in these cases and will have more to say on this issue in the future.
“The government has also just passed significant legislation which increases the government's powers on foreign investment, particularly around ensuring that FIRB has the resources, capability and legislative framework to ensure that foreign investment is achieved on terms that are not contrary to our national interest.”
FIRB scrutiny tightened
On Monday, legislation passed the Senate that will establish a register of foreign owned water entitlements, after the government clinched a deal with the Greens to tighten FIRB scrutiny.
Labor had sought amendments to the Foreign Acquisitions and Takeovers Legislation Amendment Bill, to lower the FIRB’s scrutiny threshold on foreign land acquisitions from $252 million to $50m.
But the deal struck between the Coalition and Greens will see a $15m threshold on farmland proposals implemented while setting FIRB scrutiny on foreign agribusiness proposals at $55m.
The Green’s agreement is expected to see the foreign investment scrutiny reforms start on December 1.
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.
The Register of Foreign Ownership of Agricultural Land Bill 2015 establishes a foreign ownership register to be operated by the ATO.
Federal Agriculture and Water Resources Minister Barnaby Joyce and National Party Victorian MP Darren Chester said the legislation formalised the new FIRB arrangements including applying the $15m FIRB scrutiny on agricultural land cumulatively.
“While we have always welcome foreign investment in this country, this critical legislation simply allows the government, and the Australian community, to have the proper oversight of foreign purchases of Australian land,” Mr Joyce said.
“This is not about blocking foreign investment, it is about providing a level of oversight and scrutiny that the Australian people demand when we analyse potential foreign investment proposals to ensure they are in the national interest.”
Mr Chester said this legislation would provide certainty for the Gippsland community that foreign investment in the region was in the national interest.
“I know people in Gippsland have raised their concerns with me about foreign acquisitions going unchecked and what the implications are,” he said.
“Our entire community can be confident that we’ve vastly improved the scrutiny and transparency around foreign investment in our agricultural land as well as in agribusiness.”
