(Source: The Australian, 31 July 2010)
Dow Jones Newswires | Mon 2 August 2010
By Rachel Pannett
Of DOW JONES NEWSWIRES CANBERRA -(Dow Jones)- Australia's opposition leader Tony Abbott said Friday his Liberal-National coalition of center-right parties could revise the country's foreign investment laws if it wins power in the Aug. 21 general election. Australian policymakers have grappled with foreign investment in recent times, juggling the country's need for investment at a time of tight global liquidity and volatile commodities prices with the thorny question of allowing inroads by state-controlled Chinese companies. The ruling center-left Labor government has responded by relaxing screening of some private foreign investment deals, while freeing up resources to focus on controversial state-backed deals, of which there have been a number in Labor's first term in office, including an abandoned US$19.5 billion tie-up between Aluminum Corp. of China, or Chinalco, and Rio Tinto Ltd. Currently, Australia scrutinizes all proposed investments by foreign governments and their agencies. That stance has led some Chinese firms to complain they are being singled out for undue scrutiny as Australia faces a rapid acceleration in developing countries' demand for its natural resources, notably iron ore and coal. Abbott said Friday his conservative coalition could look at refining the review process. "At the moment the Foreign Investment Review Board does review all purchases by sovereign wealth funds, all purchases by foreign government-owned entities, and it reviews all other purchases if the value of the purchase is over US$100 (million) or thereabouts," Abbott said. "We've already got a policy in place. I'm happy to look at extending and improving, refining that process," he said. The opposition leader noted that his conservative coalition opposed the abandoned Rio-Chinalco tie-up, which would have given the Chinese state-owned company an 18% stake in Rio Tinto, the world's third largest miner, and two board seats. Abbott ruled out setting up a register of foreign ownership of farmland, noting that this information already is collected by state agencies. But he said his coalition would monitor any "excessive" foreign purchases of land in the national interest, adding: "I think we do want to sell the food, rather than sell the farm." The Labor government responded Friday by saying Abbott had muddied the case for foreign investment in Australia. "Coalition confusion on foreign investment could damage business confidence and adversely affect our long-term trade links," Treasurer Wayne Swan and Agriculture Minister Tony Burke said in a joint statement. "International investment has... allowed Australian farmers' products to be marketed internationally and ensured access to markets that may otherwise have been closed to Australia's superior agricultural products," the pair said. "Australian farmers and agricultural companies are entitled to sell their assets in their best interests." Abbott said he is "not against foreign investment". "I just want to make sure that foreign investment is always in Australia's national interest," he told reporters in Adelaide.
