Publications / Foreign Investment
Recent acquisitions of Australian rural land by foreign investors have sparked public debate as to whether Australia’s regulation of foreign investment is sufficient.
For example, the Australian government does not have the power to prevent acquisitions of farm land by foreign investors under a $231 million threshold (unless the investor is foreign government owned). Even for acquisitions above the $231 million threshold, those acquisitions are prohibited only if they are contrary to the Australian ‘national interest’.
In response to these concerns, the Senate Standing Committee on Rural Affairs and Transport (Committee) has been given the task of examining the national interest test applied to purchases of Australian agricultural land and purchases of Australian agribusinesses by foreign entities. The Committee will largely focus on issues surrounding food security.
Some of the specific issues that the Committee will consider include:
- how the national interest test was applied to purchases of Australian agricultural land by foreign entities in the past 12 months
- how the national interest test was applied to purchases of Australian agribusinesses by foreign entities in the past 12 months
- the role of the Australian government, regulators and receivers in upholding the national interest test
- Australia’s food security in the context of sovereignty
- the role of foreign sovereign funds in acquiring Australian agricultural assets, and
- how similar national interest tests are applied to the purchase of agricultural land and agribusinesses in countries comparable to Australia.
The aim of the Committee is to improve the transparency of decisions made by the Foreign Investment Review Board (FIRB) under Australia’s national interest test. This may impact on the application of the national interest test itself, as well as the acquisition thresholds under which FIRB currently does not have any power to review. The Committee is due to report back to the Senate on 30 November 2011. We will continue to monitor and report on developments arising out of that report.
It should also be noted that the Committee is seeking written submissions from interested individuals and organisations by 2 September 2011. McCullough Robertson is able to assist with any submissions to the Committee.
Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.