Stock & Land | 30 April 2012
By COLIN BETTLES
VICTORIAN Liberal MP Dan Tehan is backing calls from farming groups nationwide to tighten government regulations that scrutinise potential sales of Australian farmland and water assets to foreign investors and increase transparency.
Last year, the Member for Wannon supported establishing the Federal Senate’s inquiry into the vexed foreign investment issue that’s been Chaired by NSW Liberal Senator Bill Heffernan.
He believes the Foreign Investment Review Board’s current $244 million threshold to trigger reviews of potential foreign acquisitions, is grossly inadequate and needs updating.
He said it was doubtful if any farm land would be sold at that price according to current property values, making the $244 million number meaningless and inconsistent with standards for residential properties.
Mr Tehan says currently no transparent public records are kept of foreign investments and believes a figure of $10 to $20 million should be debated as a potential new threshold.
But he said any adjusted figure needed an accumulative aspect attached to prevent foreign entities from making multiple purchases which fall under the threshold without adequate scrutiny; like eight individual purchases of $8 million.
“My view is agricultural land is being treated differently to residential land but they should be treated equally,” he said.
“Critics would say you can’t pick up a farm and take it over seas but that’s the same for a two bedroom apartment in Moonee Ponds.”
Mr Tehan said the make-up of the FIRB board needed strengthening to ensure its members understood they had a critical role in assessing what is and isn’t in the national interest, when considering foreign investment approvals.
He declined to enter detailed debate about criteria for the national interest test, to consider future food security issues and concerns, like those put forward by Senator Heffernan.
Senator Heffernan wants the current legislation bolstered to cover future threats to national sovereignty from purchases of local farmland and food producing assets, by foreign owned sovereign entities with connections to State owned banking enterprises.
Mr Tehan said the FIRB board needed members who clearly understood the issues central to Senator Heffernan’s concerns and had those priorities at the forefront of their thinking, when considering the national interest test and subsequent approvals.
Mr Tehan said the FIRB must be representative of the Australian community, with rural and regional interests embedded.
In urging maintaining a register that provided publicly available and transparent records of all purchases by foreign entities, he described the current reporting and record-keeping situation as, “ad-hoc at best”.
In the US, he said the USDA must be notified of any intended purchases which helped the US government maintain tighter control, awareness and strategic direction on the issue, which is currently lacking in Australia.
He said moves to implement that kind of system in Australia had merit because it would allow the Australian government to assume greater control of its destiny.
Mr Tehan said community concerns about foreign investment had escalated in recent years and the community needed assurances that its government had a grasp on the issue and was taking credible action.
Last week, outgoing Victorian Farmers Federation president Andrew Broad called for a thorough examination of the FIRB’s public interest test, nominating a new threshold of $5 million for farm land and water purchases.
Mr Broad said the VFF also wanted a register of all foreign-owned land and water kept to provide an ongoing picture of what’s occurring in Australia.
He questioned the merit of doing a one-off ABS survey which the government commissioned last year after QLD Nationals Senator Barnaby Joyce raised alarm bells over the dramatic spike in foreign investments occurring under the current Federal Labor government.
The Senator’s figures showed foreign investment in Australia under the Coalition had averaged only $274 million per year but since Labor took over in 2007 it had averaged $2.7 billion per year.
In response, Federal Agriculture Minister Joe Ludwig and the then Assistant Treasurer Bill Shorten developed an information gathering process to address emerging community concerns, through the ABS survey.
Mr Shorten said the key question at hand was whether foreign ownership issues really existed and a gap was actually developing between anxiety and reality.
On Monday, the National Farmers’ Federation also entered the debate by also calling for greater transparency around foreign investments in Australian agricultural land and water and increased monitoring, which WAFarmers applauded.
NFF called for a national land register to make it compulsory to report all foreign investment sales within a prescribed period and to be applied retrospectively, so all purchases made to date are also captured.
NFF President Jock Laurie said his lobby group also wanted an annual report of the register’s findings to be published, summarising any changes to the holdings of agricultural land held by foreign interests.
“At the core, the NFF supports foreign investment in Australian agriculture – provided that it does not negatively distort our resource allocations or outputs, does not undermine our farm gate prices and is not undertaken with the intent of damaging competition in the marketplace,” he said.
“This has become a highly contentious issue.
“While there have been some calls for the FIRB threshold to be lowered, we believe to do so at this point would be premature.
“This debate has long been described as a debate without data and in order to suggest a suitable FIRB threshold, we must first know what land is owned by whom, based on real data, not just a survey sample.
“Thus we do not suggest a change to the threshold at this point but will certainly lobby for this if this issue continues to be of concern to Australia’s farmers.”
Last July, the Coalition established a senior working group to investigate options for sharpening rules governing the sale of Australian agricultural land and agribusinesses, to foreign entities.
At the time, the Opposition said government policy must ensure foreign farmland acquisitions were undertaken in Australia’s national interest while maintaining food security into the future - but added continuing foreign investment was also integral to Australia’s economic future.
Mr Tehan has participated on the working group Chaired by Nationals Leader Warren Truss - but the process has been hit with continued delays.
Originally, the Coalition said it would table a report, “in the next few months” but is now saying a discussion paper may be released in five or six weeks.
Mr Broad said both Federal Labor and the Coalition needed to make firm commitments to address farmers’ concerns about foreign investment, in the lead up to the next election, scheduled for late 2013.
The Coalition’s development of a new policy position on foreign investment is being hindered by alleged infighting amongst Liberals with ideologically opposed positions on the degree of regulation required.
Senator Heffernan and Mr Tehan believe stronger legislative protection is needed along with better information and understanding around foreign investment policy setting.
In contrast, South Australian Liberal Jamie Briggs, who has also been vocal on the issue, has strong Liberal views about the value of free and open markets and supports minimal regulation.
“I have never said that we shouldn’t reduce the threshold for sale of agricultural land,” he said.
“What I have said is that we should not make changes to the assessment of foreign investment based on perceived fears in the community because ultimately that will do more damage than good.”
Mr Briggs said he had been critical of National party members who may be “talking out of school” while an internal Coalition process was underway to develop the party’s policy position.
“We have to be careful we don’t cut off our noses to spite our face,” he said.
Mr Tehan said there were many issues where he agreed with Mr Briggs and shared a similar viewpoint but foreign investment wasn’t one of them.
He said there was “gross hypocrisy” about the FIRB’s rules in terms of its treatment of foreign sales for farm land and water and metropolitan assets.
Mr Tehan said Liberal views on sovereign protection should override other views about the importance of free markets and individual freedoms.
He said any suggestion that changing the FIRB rules would impact on Australia’s ability to undertake foreign investment and trade with other countries, was “nonsense”.
Mr Tehan has two Masters Degrees - one in foreign affairs and trade and another in international relations – and says changes to FIRB rules could be used to help open up future market opportunities.
He said potentially lowering or removing the FIRB threshold for countries looking to invest in Australia, during negotiations, could help produce new trade agreements for exporting wheat, beef, wool or dairy products from Australia into those countries’ markets.
In an interview with Fairfax Agricultural Publishing recently, Mr Truss said he believes the current $244 million trigger is too high and while all applications are scrutinised, is concerned the FIRB has never said no to a rural land or agribusiness purchase in Australia.
He believes the trigger number is not as important as the FIRB’s culture and its modus operandi.
Mr Tehan said his history with the foreign investment issue started when VFF representatives alerted him to anomalies surrounding the sale of 252,000 hectares of land by receivers acting on the failed the Great Southern Plantations estate, to a Canadian based funds manager.
He said farm groups wrote to the Federal government asking if the 252,000ha could be sold up in smaller parcels of land to local farmers in Victoria and NSW during the transaction but the government failed to respond to the farmers’ requests.
He said he was concerned the receivers took the “easy option” and sold the single parcel at a substantially discounted rate to the foreign investor.
“I have no idea if the FIRB even looked at the issue,” he said.
“There’s no evidence to show there was proper scrutiny of that sale – there might have been but there’s no transparent public information to tell us otherwise.
“There should be due diligence on sales like this but there’s no sign of it.”
As part of the Senate inquiry, Mr Tehan wants to find out why the Gillard Government failed to respond to the NFF’s requests about the asset’s sale.
He said there was strong awareness within the Coalition that the foreign investment issue needs investigating, which was why the committee process was instigated.
In a recent media interview, Federal Trade Minister Dr Craig Emerson said 350 applications for investment in Australia by Chinese businesses had been made and all approved, since the current ALP government was formed.
He said, “They are all welcome; they are all approved, eight with conditions - 350 out of 350 is a pretty high mark”.
But Dr Emerson said the government and the opposition were obligated to not seek advantage of anxieties and must explain the realities and dispose of some of the myths, around foreign investment.
He said all applications for investment by State-owned enterprises or associated entities are screened by the FIRB but private land acquisitions are not.
He said the government had done some calculations that suggested since 1984 the grand total increase in the amount of land that’s majority or minority foreign-owned has been 0.2 percentage points.
“That’s not the sort of statistic you’ll hear from Barnaby Joyce because he wants to harvest votes in the bush,” he said.
“Different attitude from some of the Liberals like Jamie Briggs and Kelly O’Dwyer - good on them because they do have an eye to the national interest.
“If you listen to the Nationals, you’d think half of Australia’s farming land had been sold off.
“We have always had foreign investment in Australian agriculture, starting from the British Colonial days, the Colonial Sugar Refinery.
“Then there was a wave of American investment; then there was a wave of Japanese investment; and now there’s investment from a range of countries.
“And this country would be much the poorer, because we don’t have the savings pool to make these investments, to open the mines, to produce the food that we do in Australia and export 60 per cent of it.
“We would not be going through the biggest mining boom in 140 years if we had to rely exclusively on Australian savings in order to fund those massive investments.”
By COLIN BETTLES
Bill Heffernan and Dan Tehan.
VICTORIAN Liberal MP Dan Tehan is backing calls from farming groups nationwide to tighten government regulations that scrutinise potential sales of Australian farmland and water assets to foreign investors and increase transparency.
Last year, the Member for Wannon supported establishing the Federal Senate’s inquiry into the vexed foreign investment issue that’s been Chaired by NSW Liberal Senator Bill Heffernan.
He believes the Foreign Investment Review Board’s current $244 million threshold to trigger reviews of potential foreign acquisitions, is grossly inadequate and needs updating.
He said it was doubtful if any farm land would be sold at that price according to current property values, making the $244 million number meaningless and inconsistent with standards for residential properties.
Mr Tehan says currently no transparent public records are kept of foreign investments and believes a figure of $10 to $20 million should be debated as a potential new threshold.
But he said any adjusted figure needed an accumulative aspect attached to prevent foreign entities from making multiple purchases which fall under the threshold without adequate scrutiny; like eight individual purchases of $8 million.
“My view is agricultural land is being treated differently to residential land but they should be treated equally,” he said.
“Critics would say you can’t pick up a farm and take it over seas but that’s the same for a two bedroom apartment in Moonee Ponds.”
Mr Tehan said the make-up of the FIRB board needed strengthening to ensure its members understood they had a critical role in assessing what is and isn’t in the national interest, when considering foreign investment approvals.
He declined to enter detailed debate about criteria for the national interest test, to consider future food security issues and concerns, like those put forward by Senator Heffernan.
Senator Heffernan wants the current legislation bolstered to cover future threats to national sovereignty from purchases of local farmland and food producing assets, by foreign owned sovereign entities with connections to State owned banking enterprises.
Mr Tehan said the FIRB board needed members who clearly understood the issues central to Senator Heffernan’s concerns and had those priorities at the forefront of their thinking, when considering the national interest test and subsequent approvals.
Mr Tehan said the FIRB must be representative of the Australian community, with rural and regional interests embedded.
In urging maintaining a register that provided publicly available and transparent records of all purchases by foreign entities, he described the current reporting and record-keeping situation as, “ad-hoc at best”.
In the US, he said the USDA must be notified of any intended purchases which helped the US government maintain tighter control, awareness and strategic direction on the issue, which is currently lacking in Australia.
He said moves to implement that kind of system in Australia had merit because it would allow the Australian government to assume greater control of its destiny.
Mr Tehan said community concerns about foreign investment had escalated in recent years and the community needed assurances that its government had a grasp on the issue and was taking credible action.
Last week, outgoing Victorian Farmers Federation president Andrew Broad called for a thorough examination of the FIRB’s public interest test, nominating a new threshold of $5 million for farm land and water purchases.
Mr Broad said the VFF also wanted a register of all foreign-owned land and water kept to provide an ongoing picture of what’s occurring in Australia.
He questioned the merit of doing a one-off ABS survey which the government commissioned last year after QLD Nationals Senator Barnaby Joyce raised alarm bells over the dramatic spike in foreign investments occurring under the current Federal Labor government.
The Senator’s figures showed foreign investment in Australia under the Coalition had averaged only $274 million per year but since Labor took over in 2007 it had averaged $2.7 billion per year.
In response, Federal Agriculture Minister Joe Ludwig and the then Assistant Treasurer Bill Shorten developed an information gathering process to address emerging community concerns, through the ABS survey.
Mr Shorten said the key question at hand was whether foreign ownership issues really existed and a gap was actually developing between anxiety and reality.
On Monday, the National Farmers’ Federation also entered the debate by also calling for greater transparency around foreign investments in Australian agricultural land and water and increased monitoring, which WAFarmers applauded.
NFF called for a national land register to make it compulsory to report all foreign investment sales within a prescribed period and to be applied retrospectively, so all purchases made to date are also captured.
NFF President Jock Laurie said his lobby group also wanted an annual report of the register’s findings to be published, summarising any changes to the holdings of agricultural land held by foreign interests.
“At the core, the NFF supports foreign investment in Australian agriculture – provided that it does not negatively distort our resource allocations or outputs, does not undermine our farm gate prices and is not undertaken with the intent of damaging competition in the marketplace,” he said.
“This has become a highly contentious issue.
“While there have been some calls for the FIRB threshold to be lowered, we believe to do so at this point would be premature.
“This debate has long been described as a debate without data and in order to suggest a suitable FIRB threshold, we must first know what land is owned by whom, based on real data, not just a survey sample.
“Thus we do not suggest a change to the threshold at this point but will certainly lobby for this if this issue continues to be of concern to Australia’s farmers.”
Last July, the Coalition established a senior working group to investigate options for sharpening rules governing the sale of Australian agricultural land and agribusinesses, to foreign entities.
At the time, the Opposition said government policy must ensure foreign farmland acquisitions were undertaken in Australia’s national interest while maintaining food security into the future - but added continuing foreign investment was also integral to Australia’s economic future.
Mr Tehan has participated on the working group Chaired by Nationals Leader Warren Truss - but the process has been hit with continued delays.
Originally, the Coalition said it would table a report, “in the next few months” but is now saying a discussion paper may be released in five or six weeks.
Mr Broad said both Federal Labor and the Coalition needed to make firm commitments to address farmers’ concerns about foreign investment, in the lead up to the next election, scheduled for late 2013.
The Coalition’s development of a new policy position on foreign investment is being hindered by alleged infighting amongst Liberals with ideologically opposed positions on the degree of regulation required.
Senator Heffernan and Mr Tehan believe stronger legislative protection is needed along with better information and understanding around foreign investment policy setting.
In contrast, South Australian Liberal Jamie Briggs, who has also been vocal on the issue, has strong Liberal views about the value of free and open markets and supports minimal regulation.
“I have never said that we shouldn’t reduce the threshold for sale of agricultural land,” he said.
“What I have said is that we should not make changes to the assessment of foreign investment based on perceived fears in the community because ultimately that will do more damage than good.”
Mr Briggs said he had been critical of National party members who may be “talking out of school” while an internal Coalition process was underway to develop the party’s policy position.
“We have to be careful we don’t cut off our noses to spite our face,” he said.
Mr Tehan said there were many issues where he agreed with Mr Briggs and shared a similar viewpoint but foreign investment wasn’t one of them.
He said there was “gross hypocrisy” about the FIRB’s rules in terms of its treatment of foreign sales for farm land and water and metropolitan assets.
Mr Tehan said Liberal views on sovereign protection should override other views about the importance of free markets and individual freedoms.
He said any suggestion that changing the FIRB rules would impact on Australia’s ability to undertake foreign investment and trade with other countries, was “nonsense”.
Mr Tehan has two Masters Degrees - one in foreign affairs and trade and another in international relations – and says changes to FIRB rules could be used to help open up future market opportunities.
He said potentially lowering or removing the FIRB threshold for countries looking to invest in Australia, during negotiations, could help produce new trade agreements for exporting wheat, beef, wool or dairy products from Australia into those countries’ markets.
In an interview with Fairfax Agricultural Publishing recently, Mr Truss said he believes the current $244 million trigger is too high and while all applications are scrutinised, is concerned the FIRB has never said no to a rural land or agribusiness purchase in Australia.
He believes the trigger number is not as important as the FIRB’s culture and its modus operandi.
Mr Tehan said his history with the foreign investment issue started when VFF representatives alerted him to anomalies surrounding the sale of 252,000 hectares of land by receivers acting on the failed the Great Southern Plantations estate, to a Canadian based funds manager.
He said farm groups wrote to the Federal government asking if the 252,000ha could be sold up in smaller parcels of land to local farmers in Victoria and NSW during the transaction but the government failed to respond to the farmers’ requests.
He said he was concerned the receivers took the “easy option” and sold the single parcel at a substantially discounted rate to the foreign investor.
“I have no idea if the FIRB even looked at the issue,” he said.
“There’s no evidence to show there was proper scrutiny of that sale – there might have been but there’s no transparent public information to tell us otherwise.
“There should be due diligence on sales like this but there’s no sign of it.”
As part of the Senate inquiry, Mr Tehan wants to find out why the Gillard Government failed to respond to the NFF’s requests about the asset’s sale.
He said there was strong awareness within the Coalition that the foreign investment issue needs investigating, which was why the committee process was instigated.
In a recent media interview, Federal Trade Minister Dr Craig Emerson said 350 applications for investment in Australia by Chinese businesses had been made and all approved, since the current ALP government was formed.
He said, “They are all welcome; they are all approved, eight with conditions - 350 out of 350 is a pretty high mark”.
But Dr Emerson said the government and the opposition were obligated to not seek advantage of anxieties and must explain the realities and dispose of some of the myths, around foreign investment.
He said all applications for investment by State-owned enterprises or associated entities are screened by the FIRB but private land acquisitions are not.
He said the government had done some calculations that suggested since 1984 the grand total increase in the amount of land that’s majority or minority foreign-owned has been 0.2 percentage points.
“That’s not the sort of statistic you’ll hear from Barnaby Joyce because he wants to harvest votes in the bush,” he said.
“Different attitude from some of the Liberals like Jamie Briggs and Kelly O’Dwyer - good on them because they do have an eye to the national interest.
“If you listen to the Nationals, you’d think half of Australia’s farming land had been sold off.
“We have always had foreign investment in Australian agriculture, starting from the British Colonial days, the Colonial Sugar Refinery.
“Then there was a wave of American investment; then there was a wave of Japanese investment; and now there’s investment from a range of countries.
“And this country would be much the poorer, because we don’t have the savings pool to make these investments, to open the mines, to produce the food that we do in Australia and export 60 per cent of it.
“We would not be going through the biggest mining boom in 140 years if we had to rely exclusively on Australian savings in order to fund those massive investments.”
