CANBERRA (Reuters) — Australia’s conservative opposition, favoured to win power in an election Sept. 7, will tighten scrutiny of foreign investment into the country’s farm sector over concerns of rising interest from China in Australian agriculture.
Opposition leader Tony Abbott confirmed his Liberal-National Party coalition would significantly lower the threshold for land purchases to be considered by Australia’s Foreign Investment Review Board if he wins power.
Current rules state the FIRB considers all investments against a national interest test, with the threshold starting at A$248 million, or around A$1 billion for U.S. investors, as well as all investment from a state-owned enterprise.
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“Under a coalition government, should we win the election, the threshold for Foreign Investment Review Board (scrutiny) of foreign land acquisitions will come right down from A$200-odd million to about A$15 million,” Abbott said on Wednesday.
Any move to tighten foreign investment rules could upset China, Australia’s biggest trading partner, and possibly hinder farmland investment at a time when Canberra is seeking to boost its agricultural output to become the food bowl of Asia.
China is encouraging its firms to expand overseas to increase food security for its 1.3 billion people, and Chinese investors have been involved in some high profile deals over the past year.
Chinese investors last year bought Australia’s biggest cotton farm Cubbie Station and China’s Shanghai Zhongfu Group has approval to invest around A$700 million to build a sugar industry in northwest Australia.
Abbott said he broadly supported foreign investment and it was generally in Australia’s interest to allow investments.
Abbott’s comments follow a long-running Senate inquiry, which heard farmers complain that foreign investors were buying up parcels of small family farms to avoid FIRB scrutiny.
He said if he won power, Australia would publish a register of foreign land holdings.
His comments came in the third and final televised debate with Prime Minister Kevin Rudd, who said he favoured joint ventures by foreign investors into the farm sector.
“I am a bit anxious, frankly, about simply an open slather on this,” Rudd said, adding he might also “adopt a more cautious approach” if he retains power.
