As pointed out in the Weekly Times this week, the Foreign Investment Review Board has rightly come under fire recently for slowing overseas investment in Australia.
Australia has one of the most restrictive investment regimes in the OECF. Our restrictions are only slightly less than countries like Mexico and Russia.
Anti-Foreign investment arguments are easy to make, as they play to people’s fears and sense of nationalism. Recently, we’ve also seen similar rhetoric in relation to multinational companies.
Consolidated Pastoral Company chief executive Troy Settler pointed out in the Weekly Times that several bids had become politicised through the FIRB process and the board was slowing investment.
After more than half a century of legislating away against foreign investment, the real test for Australia’s decision makers is to create an honest narrative around the morality of open markets and more investment.
Australia has always relied on foreign investment to grow businesses and boost the economy. Without foreign investment jobs cannot be created, which is why we should be welcoming foreign investment, not restricting it.
Rejecting foreign investment is like running away from someone who wants to give you money.
Industry leaders in the agricultural sector are rightly hitting out at the Foreign Investment Review Board process. Besides the occasional political interference, red tape is the major handbrake on investment in this process. The time it takes for a foreign investor to be approved to bid on an auction by the FIRB, and the red tape challenges involved in the lengthy process is becoming an inhibitor of investment.
Prime Minister Malcolm Turnbull said in a speech recently:
“Now do we need more investment; do we need more enterprise and more jobs? Of course we do.
Australians can see in our policy measures that encourage that – you lower the tax on investment, you get more investment.
What is Labor doing? It is increasing taxes on investment, reducing the return on investment. That will result inevitably in less investment and that means less jobs.”
The same arguments used by the Government to justify welcome cuts the company tax and keeping negative gearing in place, to allow for more investment, and to grow jobs and the economy, are exactly the same reasons why we need to cut red tape to streamline Australia’s burdensome foreign investment regime.