The Business Council of Australia supports the proposal by Shadow Trade Minister, Senator Penny Wong, at the 2014 Economic and Social Outlook Conference to unilaterally extend the $1.1 billion Foreign Investment Review Board threshold, currently offered to a number of our existing free trade agreement (FTA) partners, to all countries.
Senator Wong’s proposal, which involves providing China with this higher threshold for investments in non-sensitive sectors through the ongoing FTA negotiations with China, would be a good first step in this direction, BCA Chief Executive Jennifer Westacott said.
“This proposal is consistent with a recommendation in the BCA’s Action Plan for Enduring Prosperity, released in July 2013, to provide the $1.1 billion threshold (that currently only applies to investors from the United States and New Zealand) to private sector investors from all countries,” Ms Westacott said.
“As Senator Wong notes, Australia has historically relied on foreign capital to supplement domestic savings and support economic growth.
“In short, the more open our economy is, the more successful we will be.
“Australia needs significant investment in key sectors to support growth, with some $760 billion needed for physical infrastructure over the next 10 years, and around one trillion dollars needed in our agriculture sector through to 2050 to enable production growth and support farm turnover.
“Major amounts of capital will also be required in other sectors where Australia enjoys a comparative advantage, such as mining, education and tourism sectors, and in sectors where Australia has latent potential, such as food manufacturing and selected specialised value chains.
“As Senator Wong notes, foreign investment proposals would still need approval from competition and corporate regulators, just like domestic investments.
“All companies operating in Australia – whether they are domestically owned, foreign owned or with mixed ownership – need to comply with our domestic laws, including our competition and tax laws.
“As the BCA 2013 action plan recommended, Australia should also revisit the foreign investment policy for investment by state-owned enterprises (SOEs), recognising their increasing importance as sources of foreign capital,” she said.
For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2603 | Mobile 0403 241 128