THE Federal Government last night announced deeper levels of scrutiny of foreign investments in Australia, in the wake of any economic impact brought on by COVID-19.
It stressed, however, that the move was not a ‘foreign investment freeze.’
The temporary changes to the foreign investment review framework were designed to protect Australia’s national interest as it deals with the economic implications arising from the spread of the coronavirus, the government said.
The government has now removed the previous price threshold needed to qualify for FIRB scrutiny. All proposed foreign investments in Australia are now subject to the Foreign Acquisitions and Takeovers Act, requiring approval, regardless of value or the nature of the foreign investor.
“This is not an investment freeze,” treasurer Josh Frydenberg said in a statement. “Australia is open for business and recognises investment at this time can be beneficial if in the national interest,” he said.
The temporary change will be achieved by reducing to $0 the monetary screening thresholds for all foreign investments under the Act.
“By temporarily reducing the foreign investment thresholds, the Australian Government will ensure appropriate oversight over all proposed foreign investment during this time,” yesterday’s statement said.
To ensure sufficient time for screening applications, the Foreign Investment Review Board will work with existing and new applicants to extend timeframes for reviewing applications from 30 days to up to six months. In doing so, the Government said it would prioritise urgent applications for investments that protect and support Australian business and Australian jobs.
“Even in these uncertain times, Australia continues to welcome foreign investment, which remains vital to our long-term economic success and stability. The Government recognises that foreign investment will play an important part in helping many businesses get to the other side – securing jobs and supporting our economic recovery,” Treasurer Frydenberg said.
“However, these measures are necessary to safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses,” he said.
The temporary measures would remain in place for the duration of the current crisis.
The Treasurer said foreign investment proposals would continue to be reviewed against the national interest, on a case-by-case basis. Where appropriate, conditions would be applied proportionately to address identified risks on a non-discriminatory basis.
Foreign Investment Review Board chair, David Irvine, said he fully supported the Government’s changes announced yesterday.
“These temporary measures have been necessitated by extraordinary economic circumstances,” Mr Irvine said.
“Foreign investment is and will continue to be critical to Australia’s prosperity. These temporary measures are necessary to protect the national interest during an historically challenging time for the economy, businesses and the broader community.”