Foreign Investment and the Coalition With the National Party
Posted by Tom Bridge
Foreign investment has been in the media a lot recently. Increased talk about foreign investment as part of the Australian political discourse has amped up over the last few years in particular with reports of particularly Chinese-based companies buying up farmland, chiefly across New South Wales. It’s prompted raised concerns from some in Australian politics. The interesting thing is that most of the questioning of foreign investment in Australia, again mostly in relation to farmland has come from the conservative side of politics. What is not so surprising is that most of the scepticism around foreigners buying up and investing in our country from the right side of politics has come from the National Party, the party traditionally of the farmers.
But what is very interesting about this and different from previous times is the willingness of the National Party’s major coalition partner, the Liberal Party to indulge the National’s in the debate with a proposal to examine more deeply, at a lower threshold, more of the proposed investments of companies from outside of Australia.
There’s been much mixed messaging from the Coalition, from National Party Senator Barnaby Joyce openly questioning the appropriateness of too much foreign investment at any opportunity, to Tony Abbott in China appearing to talk down to China about their investing in Australia whilst overseas as a guest in their country. Then just in the last week or so we had Joe Hockey and Tony Abbott both talking down the prospects of a change in foreign investment rules and scrutiny by the Foreign Investment Review Board.
Then today, flanked by Joe Hockey and Leader of the Nationals, Warren Truss, Opposition Leader Tony Abbott announced a discussion paper which flags a lowering of the purchase price of agricultural land and businesses at which the Foreign Investment Review Board will examine purchases.
The paper proposes that the FIRB look at purchases of agricultural land valued at over $15 million dollars and purchases by foreign companies of agriculture businesses valued at $53 million. This is way down from the current threshold at which injections of funds of $214 million and over are examined by the review board.
The change in policy has copped criticism from both sides of politics, with the ALP jumping at the chance to have a dig at the party of the free market for wanting to lower the scrutiny threshold.
But there’s also been criticism from their own side of politics, with not just conflicting words in the lead-up to today’s decision from Liberal and National Party politicians, but also from former Coalition MP Peter Reith who launched an attack on Twitter today. Mr Reith in comments today on social media said that the move was “crazy, stupid politics.”
Reith also said that the decision “is just a quick fix to satisfy the Nats, but which will come back to bite the national interest”. Peter Reith, in saying this is not far from the truth, perhaps even spot on with his comments.
The Nationals, in an incoming Coalition Government, which now appears a certainty, would have much higher influence within the joint party-room than they do at present in the current parliament. So this announcement today can easily be seen as a move to placate the National Party ahead of the next election. Tony Abbott and the Opposition leadership undoubtedly realise there will be much more competition of ideas and much more competitive and vigorous debate from two contradictory standpoints within the Coalition caucus.
But what about the decision itself and what Tony Abbott says it will mean for the future of foreign investment in Australia?
Well, for his part Mr Abbott says he wants to “make it absolutely crystal clear that the Coalition unambiguously supports foreign investment in Australia.” Further, he says “we need it, we want it, it is essential for our continued national prosperity.” He also said, “what’s very important though is that the public have confidence that the foreign investment we need and want is in Australia’s national interest.”
Well, it seems pretty ambiguous the level of support there is on one side of the Coalition for further foreign investment in Australia. The Liberal Party are undoubtedly all for it, with the current level of examination likely deemed more than sufficient, perhaps too much for a number in the Liberal and National Party room. But the National Party, particularly given the words of its loudest member, Senator Barnaby Joyce, is certainly far from sure about people from overseas investing in Australia.
The Coalition for its part says that the move is all about increased “scrutiny” of foreign investment decisions as they relate to agricultural land. But this standpoint, is actually to be taken as read and believed, has unintended consequences at best.
If it’s just about a ramped up level of scrutiny in foreign investment and every investment decision that applies to this lower threshold is given the tick of approval, then there’s just unnecessary bureaucracy and red tape for inevitable decisions.
But more likely, with the same “national interest” test applying, albeit at a lower monetary level, then smaller purchase decisions, much smaller ones in fact, will be denied if the national interest test requirements are not met.
Could this and other recent decisions and thought bubbles or proposals of a similar protectionist nature be a sign of things to come?
About Tom BridgeA perennial student of politics, providing commentary for money and for free. Email me at email@example.com or contact me on 0435 035 095 for engagements.
Posted on August 3, 2012, in Federal Politics and tagged $15 million. $53 million, agribusiness, agricultural land, agriculture, Asia, Australian Government, Australian politics, bureaucracy, China, Coalition, farmers, farmland, FIRB, foreign investment, Foreign Investment Review Board, Joe Hockey, Liberal Party, National Party, ownership, Peter Reith, politics, purchases, red tape, social media, threshold, Tony Abbott, Warren Truss. Bookmark the permalink. 1 Comment.