‘THE ADDRESS’ reveals how come Australia has changed so very much before our eyes … as we go about the day-to-day … it has escalated during the term of the Liberal Coalition (2013 – 2020) … we discover that not only have Our Ports, Mines, Power, CBD Commercial Towers, Transport, Cattle Stations, DAIRY, and other large land holdings are now Chinese-owned …
BUT across Sydney suburbs the local businesses, the tax agent, pharmacy, dental practice, medical centre, fruit market, cafes, supermarket, post office, shoe shop, haberdashery, liquor shop, computer shop, real estate agency are now owned and operated by new Chinese owners!
‘The Address’ is all about the priority, AND emphasis on China’s investment ...
Was there a like address before a Canadian, United States or United Kingdom Business Council?
CONTRARY to the views expressed by Irvine, where are the benefits for Australians with this Totalitarian Regime buying up our Real Estate?
AUSTRALIANS have been locked out of home ownership, and what were our businesses by ‘Hot Money’ with some 50,000 Chinese flying into Australia every week.
We have witnessed Australian businesses folding, Australian-made goods disappear from shop shelves, and with that the jobs too!
AS wages stagnate! How will Our Families fare in Chinese-owned business? Will they even get ‘a look in’?
WHAT is more shocking this FIRB Apparatchik believes it doesn’t matter who owns it – just about anything here in Australia – so long as it meets some simple rules and rather limited circumstances!
It is simply amazing to read he even is prepared to admit to such a World view!
-Irvine has been a member of the FIRB since 2015 and Chair since 2017
To read more about the Foreign Investment Review Board view:
VIEW the About FIRB:
RELATED ARTICLE … following this address another event … the Sino-Australasian Entrepreneurs Summit on 11 November 2019! Among the participants were John Howard and Andrew Robb!
ADDRESS BY MR DAVID IRVINE AO, FIRB CHAIR to the Sino-Australian Investment and Financing Forum 2019, Sydney NSW
6 November 2019
Australia continues to welcome foreign investment, including Chinese investment. We have a long standing and close relationship. It is a relationship we value and we want to preserve
Address by Mr David Irvine AO, FIRB Chair to the Australia-China Business Council
Minter Ellison, Level 40, Governor Macquarie Tower, 1 Farrer Place, Sydney
|Key Messages Australia continues to welcome foreign investment, including Chinese investment. We have a long standing and close relationship. It is a relationship we value and we want to preserve. Australia benefits from the openness of our foreign investment review framework. We will review foreign investment proposals to ensure they are not contrary to the national interest. By mitigating risks to the national interest, we protect the integrity of that open system. We understand commercial imperatives. We encourage early engagement by investors, particularly in sensitive sectors, so we can ensure a smooth process by commencing our assessment of national interest concerns as early as possible. The Critical Infrastructure Centre complements the existing FIRB process, providing early and comprehensive advice on national security concerns.|
I’ve been invited today to speak about foreign investment – why Australia welcomes it, how we think about it, and how our foreign investment review process works.
Australia’s openness to trade and investment is a key feature of government policy as articulated in the 2017 Foreign Policy White Paper. Government scrutiny of foreign investment, to ensure it is in the national interest, is essential to maintaining community support for high levels of inward foreign direct investment – FDI.
Australia welcomes foreign investment
Our system is premised on the view foreign investment makes Australia and Australians more prosperous than otherwise.
Foreign capital allows for a wider range of investment in the Australian economy than would otherwise be possible. It enables greater access to foreign markets for Australian businesses, increases domestic opportunities, supports capital formation and creates jobs.
Total foreign investment flows contributed 9.0% of Australia’s $455 billion investment in 2018. The level (stock) of total foreign investment in Australia increased by $187 billion (or 5.6%) to $3.5 trillion in that year.
The total stock of FDI in Australia increased by 9.5% to $967.5 billion in 2018.
Firms with FDI support 1 in 10 jobs in Australia and 40% of our exports.
We have an abundance of investment opportunities and are an attractive investment destination. Australia offers foreign investors, including Chinese investors, strong fundamentals and distinct comparative advantages. As an advanced, services-based economy, we have recorded an unprecedented 28 years of consecutive annual growth, and have a highly-educated and multilingual workforce.
Foreign investment, however, is not just about the economic benefits. It creates partnerships and friendships, builds trust and understanding between Australia and our international partners.
Welcoming foreign investment is in line with our values – those of openness, of pluralism, and of multiculturalism – all of which shape our approach to foreign investment.
At the same time, in the context of an open trading environment that promotes mutual prosperity, we also welcome Australian investors going overseas. The current stock of outward investment from Australia is not inconsiderable – about two-thirds of the volume on inbound investment.
Australia welcomes Chinese investment in Australia
Investors make a major contribution to the Australian economy and to bilateral relationships. Investment is a key driver of mutual economic growth and prosperity.
In recent years, foreign investment, including from China, has enabled Australia to take advantage of a once-in-a-generation resources boom which in turn has helped drive exports from Australia, and new business opportunities in China and in the region.
As this room knows only too well, China stands today as Australia’s largest two-way trading partner, by quite some margin. Investment is an important part of our bilateral relationship.
When the Trade, Tourism and Investment Minister, Senator Birmingham, was in China earlier this month, as well as when he addressed the ACBC’s annual networking day in June, he emphasised the value placed on the partnership between Australia and China.
I have been lucky to have been involved in key stages of Chinese investment in Australia. Back in the early eighties, as a young diplomat in China, I played a small bit part in China’s first major overseas investments, the first steps in its nearly minted “gaige kaifang” or “Open Door” polices. Those first steps included Chinese investment in the Portland Alumina Smelter and in the Channar iron mine in the Pilbarra.
Later, as Ambassador to China, I supported negotiations to conclude the agreement for China to invest in the Northwest Shelf Liquid Natural Gas project, another first for China at the time and bringing benefit to both countries.
Today, China is the 5th largest holder of FDI stock in Australia.
In recent years, China has been our largest source of proposed foreign investment year-on-year, except for last year, when the US was once again the largest source country for that year, possibly reflecting the impact of Chinese capital controls and that there were no major proposed Chinese acquisitions during the year.
Chinese investment in Australia has broadened from mainly mining to include other sectors such as infrastructure, services, agriculture and real estate. *
This reflects structural changes in China’s economy as demand pivots from manufacturing into services, and the drivers of Chinese growth move from investment towards consumption.
In 2017-18, the top three sectors for proposed Chinese investment were real estate (commercial and residential), services, and mineral exploration and development, in that order.
While larger state-owned enterprise deals may make the headlines, private Chinese companies make an important and welcome contribution to Australia. In the China Australia Free Trade Agreement, provisions were included to support two-way investment. Today, as a result, private Chinese investment of up to $1.154 billion in non-sensitive areas does not require foreign investment approval. *
According to the University of Sydney and KPMG report, ‘Demystifying Chinese Investment in Australia‘, in 2018 private Chinese companies made up 92% of deals by volume and 87% by value of Chinese FDI in Australia.
How Australia manages proposed foreign investment
Australia has the most liberal foreign investment regime in our region. Both Australia and China in accordance with their sovereign rights, have mechanisms in place to ensure incoming investment is in the national interest.
That does not mean, however, it is possible for Australians to invest in China in the same way Chinese investments are made here – or vice versa. Our policies are not framed in the context of reciprocity, but of national interest.*
We retain our sovereignty over these investments, especially in relation to strategic and national security considerations, but where such issues are satisfied, we would be only harming our own economic interests if we were to deny our economy access to foreign capital. *
This is why Australia maintains an open and transparent foreign investment review framework. It is non-discriminatory in respect of individual countries, with proposals considered on a case-by-case basis. Successive Australian governments have preferred to have neither negative nor positive lists for foreign investment – there is no sector of the Australian economy in which foreign investment is prohibited. *
However, like all governments we have a responsibility to ensure foreign investment is not contrary to our national interest. If we fail in our responsibility to the Australian people, we risk losing the community’s faith in the foreign investment review framework, and with it their support for foreign investment and the many benefits it provides.
The national interest, and what would be contrary to it, is not precisely defined in legislation. *
Instead, the Treasurer has the power to decide in each case whether a particular investment would be contrary to the national interest. *
National interest factors typically considered when assessing foreign investment proposals include:
- other Australian Government policies (including tax),
- impact on the economy and the community,
- national security, and
- the investor’s character.
The Foreign Investment Review Board (FIRB) advises the Treasurer on the national interest implications. We are supported in this by drawing upon expertise from Government agencies, such as national security agencies, the Critical Infrastructure Centre, the ATO and the ACCC, among others.
Our approach is to work with foreign investors to facilitate investment that is consistent with the national interest. When there are national interest concerns associated with a proposed foreign investment, we first look for ways to mitigate those concerns so that investment can go ahead. For example, we may advise approval of the proposal, but with conditions that address national interest concerns. It is important to understand, when we do decide to impose conditions, we do so carefully and proportionately to address identified risks on a non-discriminatory basis. *
The Treasurer has the power to reject foreign investment proposals. Rejections, however, are rare – there has been only a handful of rejections in the past decade. These rejections are case-specific and non-discriminatory. Only a few have been on national security grounds.
A couple of rejections to highlight this point include Archer Daniels Midland’s $3.4 billion proposed takeover of GrainCorp and Shell’s bid for Woodside Petroleum. We have rejected investment proposals from the UK, the US, Japan and China.
Importantly, such decisions are not taken lightly. A key factor in all of those rejections was the specific national interest circumstances of the transaction, highlighting the importance of a case-by-case rather than a one-size fits all approach. We are always mindful of our national interest to project a welcoming investment environment and of our approval process having the least possible impact on commercial considerations.
How we can support Chinese investors in Australia
The global competition for investment is intense, but Australia continues to attract and retain investment from all our major economic partners because:
- We are a stable democracy backed by the rule-of-law and a robust domestic legal system.
- We have a skilled workforce, high quality assets, high incomes, and are interconnected with key Asian markets, including through a network of Free Trade Agreements (FTAs).
We understand commercial imperatives. The membership of the FIRB reflects deep experience across a range of private-sector industries, and we know that deals can collapse if approvals take too long.
For this reason, we encourage early engagement by investors, particularly in sensitive sectors, including critical infrastructure. This allows us to start our assessment of national interest concerns as early as possible. It also helps avoid surprises, so any national interest concerns can be identified, assessed and managed as early as possible. The same goes for vendors. We are open to engaging with vendors of critical infrastructure as they develop their sale process, to consider potential national interest concerns.
*All investors, including Chinese investors, can contact us on our 1800 number or email.
Australia’s offshore network continues to provide assistance to existing and prospective investors across our five mainland Chinese posts plus Hong Kong. You don’t necessarily need a consultant to prepare your application – we aim to have an open and accessible process for all investors.
Furthermore, the Australian Government’s investment promotion agency, Austrade, works with international investors to ensure they are well-informed about growth opportunities in Australia.
They have various resources at their disposal to assist investors and would welcome the opportunity to work with Chinese investors, including on investment in critical infrastructure.
The importance of critical infrastructure
*Many countries, like China, prohibit foreign ownership in key sectors or simply keep these assets under government ownership. In Australia, many assets are in private hands – including infrastructure, media and telecommunications companies. Private ownership does not, however, absolve government of responsibility for ensuring Australia’s critical infrastructure is secure and resilient – particularly in today’s age of dependence on the cyber world.
In keeping with this responsibility, the Australian Government has taken extra steps to protect our critical infrastructure – whether they be domestically owned or foreign owned.
The Critical Infrastructure Centre and the Security of Critical Infrastructure Act 2018 (SOCI) strengthens the Australian Government’s ability to manage national security risks in the electricity, gas, water and ports sectors. The Telecommunications Sector Security Reforms (TSSR) ensures the security and resilience of Australia’s telecommunications infrastructure.
Investors should understand that these security policies don’t target them or single them out – the policies apply to all owners and operators and are a transparent acknowledgment that investors are the custodians of what remains Australian critical infrastructure.
These policies are an example of how the Australian Government places extra emphasis on some sectors of the economy, just as I understand the Chinese Government does in some sectors of its economy.
To be clear, the Critical Infrastructure Centre is not a part of FIRB – it has a broader role than just considering foreign investment.
The Critical Infrastructure Centre nevertheless complements the foreign investment review process by providing clear, consolidated and early advice to inform the Treasurer’s decisions on foreign investment proposals.
In cases that include proposed foreign investment into critical infrastructure, let me reiterate: the FIRB’s preference is to mitigate these risks, rather than prohibit the investment. *
This approach has been illustrated recently in the Treasurer’s request for Australian participation in electricity networks, as well as the APA decision that ruled against a large proportion of the east coast gas network being owned by a single overseas investor.
Protecting Australian data
Another area the FIRB is increasingly being required to look at more closely is the protection of sensitive Australian data – and not just sensitive national security data. In recent years, the FIRB has seen an increased number of foreign investment proposals seeking access to data centres and other facilities, that house, or have access to, sensitive private data about Australians.
*Consistent with our preference for mitigation, rather than prohibition, the development of data security conditions continues to be a key area of focus for the FIRB.
Again, I should like to point out that this approach to closer scrutiny of data acquisitions is not inconsistent with the approach other governments around the world are taking, including the Chinese Government, to protect their citizens’ data.
To summarise the key messages I would like to leave with you this evening:
- Australia continues to welcome foreign investment, including Chinese investment. We have a long standing and close relationship. It is a relationship we value and we want to preserve.
- Australia benefits from the openness of our foreign investment review framework. We will review foreign investment proposals to ensure they are not contrary to the national interest. By mitigating risks to the national interest, we protect the integrity of that open system.
- We understand commercial imperatives. We encourage early engagement by investors, particularly in sensitive sectors, so we can ensure a smooth process by commencing our assessment of national interest concerns as early as possible.
- The Critical Infrastructure Centre complements the existing FIRB process, providing early and comprehensive advice on national security concerns.
I believe foreign investment will continue to play an important part in the future of Australia’s economy just as it has throughout the past. Government and business need to work together to explain the important benefits that FDI delivers to everyday people.
Thank you. I’d welcome the opportunity to hear your views, or to answer any questions.
Monday 19 August 2019
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