Joyce stands up for FDI changes

Last week, the Coalition announced it would forge ahead with its election policy commitment on tighter screening of foreign farmland and agribusiness purchases through the Foreign Investment Review Board (FIRB).

At the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Outlook conference in Canberra this week, Mr Joyce said the tighter FIRB regime responded to community expectations about increasing foreign land ownership.

He said the government had now reduced the level at which an individual must report to the FIRB when they purchase land - from its current level of $252 million non-cumulative - to $15 million cumulative.

“If you buy a $14 million place today and a $2 million place tomorrow, the second property will require reporting to FIRB,” he said.

“The alternate government, the Labor party, in some mysterious diversion, have said that the level should go from $252 million to a unilateral level of $1000 million.

“Whether you’re in Blacktown or Boulia, Ipswich or Brewarrina, this idea is overwhelmingly rejected by the Australian people.”

During questioning, Mr Joyce said if foreign investment wasn’t such a big issue, he wouldn’t be putting his endeavours towards it.

“It must always be a reflection of what your constituents want and put it through the filter of what’s right and proper for the nation,” he said.

Mr Joyce said transparency issues existed around identifying who owned the land, via trusts or other mechanisms “overseas” and the volume of farm land already sold.

He said a conversation with a real estate agent last week revealed that 'tyre kickers' who had been wandering around looking at farmland “are now rushing in to close deals” before the new FIRB rules are in place and more caution is introduced to the market.

Mr Joyce also questioned the official Australian Bureau of Statistics (ABS) figures on foreign farmland ownership saying they are “way below what the actual truth is”.

“To be honest a lot of people just don’t bother filling out the ABS statistics if they don’t think they don’t want their story told,” he said.

Mr Joyce estimated that a little over 80 per cent of respondents actually return the ABS forms.

However, he said current ABS data still showed that a landmass about 2 to 2.3 times the size of Victoria, “is either now totally foreign owned or partially foreign owned”.

“Now that in itself should ask some questions of us and (if) we will remain the most liberal nation on earth for investment,” he said.

Mr Joyce said he also met last week with Association of Southeast Asian Nations (ASEAN) ambassadors and held “up front” talks on foreign investment.

He said he asked if Australians could invest in ASEAN countries, like they can invest here, but the “overwhelming answer was ‘no you can’t’ and in some instances we’re not allowed to buy land at all”.

Mr Joyce said lawmakers had to an obligation to the Australian people, to ensure there was proper transparency and control over their most vital asset – the land they stand on.

“And if that brings me into conflict with certain sections, then so be it,” he said.

“As I’ve said before, this is more than a purely economic argument because if you just want a purely economic argument then we can go through a whole range of things; why do you need healthcare (and) why do you need child care?

“If you want me to be a purist accountant I will save this nation a lot of money and you will find the consequences lying on the street within a matter of years.

“But we are more than just purely an economic principle; we are a nation and as a nation we must look forward to the future of our nation and of course we must ... protect the interests of this nation.”

However, a report by KPMG Australia, prepared for the Western Australian Agriculture Department and released last week, warned uncertainty over the government’s new agricultural policy was hurting foreign investment.

It said Australian agriculture has one of the lowest levels of government financial support in the world.

But while that was often criticised by segments of the Australian agricultural sector, it also has the advantage of providing a relatively stable and low risk environment for investment.

“While the perception of the media and public is that Australian agriculture is highly subsidised, the industry is less reliant than most other markets on government subsidies and assistance, and consequently has a low risk profile in that changes in policy are unlikely to materially impact investment performance,” the report said.

“This is viewed favourably by investors, particularly foreigners, with heightened concerns in respect of policy risk.

“While Australia has historically ranked highly in the world, this position has fallen and from our investigations the most common grievances relate to uncertainty in respect of foreign investment guidelines and competition concerns.”

Last week, Prime Minister Tony Abbott and Treasurer Joe Hockey announced the government was also introducing a new $55 million screening threshold for foreign investment in Australian agribusiness.

“The government is seeking views on an appropriate definition of agribusiness,” the joint announcement said.

“Together with the lower screening threshold for foreign investment in agricultural land of $15 million (cumulative) from 1 March 2015 and the foreign ownership register already announced, the new $55 million screening threshold for agribusiness will ensure foreign investment in agriculture remains in Australia’s national interest.”

But Shadow Agriculture Minister Joel Fitzgibbon accused the Abbott government of rushing foreign investment changes to deflect from internal leadership dramas.

Mr Fitzgibbon said Treasury officials had confirmed at Senate estimates that the changes to investment screening thresholds for agricultural land would start on Sunday, but legislation or regulations will not be introduced until Parliament’s Budget sitting, in May.

“That means the legislation will be retrospective – all because a besieged Prime Minister rushed this announcement for political purposes,” he said.

“Far from being open for business, the Abbott Government’s foreign investment policy is mired in chaos and confusion.”

Nationals Leader Warren Truss said Queensland was the only State that had a foreign ownership register which had a trigger for FIRB scrutiny that was so high, no farm in the country ever set it off.

“Under Labor, a foreign investor could come in and buy every single farm in Australia without ever having to ask,” he said.

“But, of course, if a foreign investor wanted to buy a little house in the town near the farms that he had bought, he did have to go to the FIRB to get approval.

“This was simply not a policy that was in our national interest.

“We are making a decisive change.

“Once the purchases reach $15 million or the purchase is valued at $15 million, FIRB approval will have to be sought,” he said.

“This means that we will have an understanding of what level of foreign ownership there is in our country.

“We will still welcome investment that is in our national interest, but we will know what is happening, and we will have a say to ensure that our precious agricultural land is used productively also for future generations.”

Tasmanian Liberal Senator Eric Abetz said the government was also in the process of establishing a foreign ownership register of agricultural land within the Australian Taxation Office (ATO), regardless of value, from July 1, 2015.

Senator Abetz said the ATO would also commence a stocktake of existing agricultural land ownership by foreign interests.

He said the recently signed free trade agreements (FTA) with China, Japan and Korea, contained provisions for Australia to apply lower thresholds to private sector proposals to invest.

“The government has long been aware of community concern that no-one had a complete picture of the levels of foreign ownership of our agricultural and agribusiness assets, so the government is reworking the framework to provide clarity to the community and certainty to investors,” he said.

“Australia remains one of the most attractive destinations for foreign investment.

“Genuine, above-board foreign investors will not be concerned by the Coalition government's very reasonable measures to increase transparency around foreign investment in agriculture.

“By contrast, the opposition advocates that no foreign purchase proposals for agricultural land need be screened by FIRB unless they exceed $1000 million.

“We believe we have struck the right balance by introducing a $15 million FIRB review threshold for agricultural land and with our proposal to introduce a $55 million FIRB review threshold for agribusiness.”