Red tape that restricts overseas investors from buying Australian farms should be removed to promote more foreign investment, a report has found.
A Productivity Commission report into the regulation of Australia’s agriculture industry calls for the raising of the price at which a farm’s sale is automatically subjected to screening by the Foreign Investment Review Board, in a bid to encourage more foreign buyers to purchase Australian farmland.
Under laws introduced last year, any agricultural land sale of more than $15 million to a foreign investor is screened and requires FIRB approval.
But in its report, the Productivity Commission recommends the screening threshold be raised to $252 million, with any deals below that amount to be exempt.
National interest: Government blocks sale of Australia’s largest cattle station
“The recent tightening of the foreign investment regime for agriculture by the Australian Government also lacks a sound policy justification,” commissioner Paul Lindwall says.
“These regulations are not in the public interest and should be unwound,” he says.
The release of the report comes months after the sale of the S Kidman and Co. portfolio of farmland to Chinese investors was blocked due to national security concerns.
One of the cattle stations included in the portfolio – South Australia’s Anna Creek, Australia’s largest single landholding – sparked concerns because part of the property is home to a weapons testing range.
These regulations are not in the public interest and should be unwound
But the report says deterring foreign investors from buying up Australian farmland could hurt the industry, and the national economy.
“Decreased foreign investment could also have detrimental effects in the long term, such as a lower net capital stock, lower agricultural land and agribusiness prices, and consequential adverse effects on production, productivity and income,” the report says.
In 2014-15, foreign investment in Australian agriculture was $5.3 billion – about 3% of the total overseas investment in Australian commercial property.
Article originally sourced from realcommercial.com.au