Property

Property: Parliament passes new foreign investment rules

Beef Central, 25/11/2015

LEGISLATION strengthening scrutiny of foreign investment in Australian agriculture has passed through Federal Parliament this week.

The legislation formalises the new agricultural land foreign ownership register, and the lowering of the general screening threshold for FIRB scrutiny of proposed foreign purchases of agricultural land by private investors from $252 million to $15 million.

It also lowers the FIRB scrutiny threshold for agribusiness from $252 million to $55 million.

It defines agribusiness as first stage processing immediately outside the farmgate, including meat, poultry, seafood, dairy, fruit & vegetable processing, and sugar, grains and oils & fat manufacturing.

The lower thresholds of $15 million and $55 million will also apply to the free trade agreements negotiated and concluded under the Coalition Government.

The threshold for scrutiny of proposed purchases by government-related entities remains at zero.

Stricter penalties for foreign investors who breach the rules and application fees to ensure that Australian taxpayers are no longer required to fund the cost of administering the system will apply from 1 December 2015.

“This is not about blocking foreign investment—far from it. It is simply about providing a level of oversight and scrutiny that the Australian people demand when we analyse potential foreign investment proposals,” agriculture minister Barnaby Joyce said.

“We know how important foreign investment is to Australia’s economy—it contributes to growth, infrastructure and productivity as well as creating jobs, and this legislation allows the community to have confidence that this investment is for our nation’s benefit.

“The establishment of a register will give us clear and accurate information on who owns what agricultural land, and lowering the screening thresholds to $15 million and $55 million will allow the FIRB more oversight and responsibility in scrutinising foreign purchases.

“There have been some suggestions that the current level of foreign investment in agriculture is very low, based on looking at the annual figures from the FIRB. But with the previous high threshold level, most recently $252 million at 1 January 2015, most agricultural land purchases and many agribusiness SMEs fell way below the FIRB radar, and so were never included in the FIRB data. This has been a major reason for lowering the thresholds.

“We have also resolved to introduce a register of foreign ownership of water entitlements—which will give greater clarity on the level of foreign ownership of another of our precious natural resources.

“Just as land is a precious asset so are the water licenses which are vital assets without which there is limited agricultural production. You can make money out of mud but you’ll never make it out of dust.

“Therefore a clear understanding of who owns what water assets in our nation is vital as it’s closely associated to our dry nation’s agricultural productive capacity.

“It is pleasing to see the fulfilment of this important commitment to strengthen the foreign investment framework to better reflect the expectations of the Australian people—whom we’re here to serve.”

Mr Joyce said the legislation delivers on a Coalition commitment to ensuring Australia has proper oversight and understanding of the level and nature of foreign ownership of its agricultural land and assets.

“The passage of this legislation is a clear indication of the Coalition Government’s commitment to give all Australians a proper understanding about exactly who owns what, and also to provide proper oversight over who gets to own what,” Mr Joyce said.

 

Source: Minister for Agriculture. Further information on the reforms to strengthen the foreign investment framework is available on the FIRB website.

 

 

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