26 February 2015

Strengthening foreign investment framework

I welcome moves by the Federal Government to strengthen Australia’s foreign investment framework for both residential real estate and agriculture.

The issue of foreign investment is one which many people in Corangamite have raised with me.

Australia’s foreign investment policy for residential real estate is designed to increase housing stock. This policy remains appropriate, but a lack of compliance and enforcement of the rules over recent years is threatening the integrity of the framework.

Foreign investment is of course vital for Australia’s economy, but it is important to ensure that it is in the national interest.

This is about ensuring there is a proper Foreign Investment Review Board process for sale of real estate.

Under six years of Labor, the law was not enforced; there were no prosecutions or divestment orders. We need to know all foreign investors are following the rules, and that any foreign investors who break the rules are not able to profit from breaking the law.

Under the strengthened framework, the government will make sure all foreign investors are following the rules, and that those foreign investors who break the rules are not able to profit from breaking the law.

The government intends to establish a small compliance and enforcement area within the Australian Taxation Office to identify and investigate breaches. Notably, new penalties for breaches of the foreign investment rules were a bipartisan recommendation of the House of Representatives Standing Committee on Economics report.

We are also consulting on the introduction of an application fee on all foreign investment proposals. The fees will fund increased enforcement activity and ensure the cost of administering the foreign investment framework does not fall on the taxpayer.

The government will deliver on its election commitment by introducing a new $55 million screening threshold for foreign investment in Australian agribusiness, to further increase transparency around foreign investment in agriculture.

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.

25 February 2015