Tony Abbott’s current position on foreign investment in agriculture — to the extent that it can be accurately established — again reflects the malign influence on public policy of Barnaby Joyce.
Abbott is reported to have said that foreign acquisition of agricultural land will receive “tougher scrutiny” under the Coalition, particularly with regard to cumulative purchases.
How this departs from current policy isn’t clear: under FIRB regulations now, all purchases of agricultural land over $244 million must be approved (the threshold is higher for US investors). Any purchase at all by a foreign government — supposedly the particular problem that alarms Senator Joyce and the Nationals in regard to China — must be approved. It doesn’t matter whether the purchase is “cumulative” or not.
The current hurdles might be why there’s such a low level of foreign investment in Australian agricultural businesses and land. According to the ABARES study released in January, ABS data shows 1% of agricultural business are partly or wholly foreign-owned and 11.3% of agricultural land. The biggest investors, perhaps reflecting the much higher $1.062 billion thresholds for approval, were US companies, followed by the UK. China wasn’t even in the picture.
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But a closer look at the numbers shows why Joyce is driving this issue. If foreign acquisition of agricultural land is in any way an issue, it’s an issue in Queensland, which has a lower level of overall foreign ownership of land than the NT or South Australia, but is much bigger. In 2010, more than 16 million hectares of agricultural land in Queensland were foreign-owned or partly foreign-owned, easily the highest level of any state.
Separately, data kept by the Queensland Land Register on wholly foreign-owned land suggests UK companies are the biggest owner, followed by US and then European companies. It also suggests foreign ownership can fluctuate, and fell significantly in 2004 and 2005.
Tony Abbott was the one who warned in 2010 that the mining tax had so profoundly damaged Australia’s attractiveness as an investment destination by creating a sovereign risk problem that we ranked below the likes of Zambia for foreign investors. Now, seemingly, foreign investors have to be deterred with unspecified get-tough measures, despite the absence of any data suggesting there’s an actual problem arising from foreign investment.
Under a Coalition government, presumably, Joe Hockey would be Treasurer, and thus responsible for major foreign investment decisions. That will make for some interesting tensions. Hockey is maturing into one of the harder economic heads in the Coalition. Last week he correctly observed that the government’s handouts to the car industry had done little to slow the loss of jobs from the automotive sector given Australians were “voting with their feet” on Australian-made cars. For the first time in generations, there appears to be a real prospect of a government taking an appropriately critical look at industry handouts.
Whether Hockey is keen to participate in Barnaby’s jihad against foreign investment remains to be seen. Hockey himself has some form in trying to exploit the issue of foreign ownership of Australian real estate, which flared briefly a couple of years ago before the strengthening dollar choked it off. Perhaps Hockey might point out to Joyce and his colleagues that the ultimate losers from deterring foreign investment in agriculture our farmers themselves, of whom the Nats are supposedly the representatives.