Treasurer unveils next stage of investment reforms
Foreign entities will have access to automatic approvals for low-risk investments under the government’s new proposal aimed at increasing overseas capital flowing into Australia.
Finance Minister Jim Chalmers will announce the second tranche of reforms to the country’s foreign investment review scheme in a speech in Sydney on Friday.
The government has already introduced changes to the way foreign investments are determined by the Foreign Investment Review Board, including streamlined evaluations for investors with a proven track record and more resources for the board.
“Our vision is for Australia to be where global investment flows first and grows fastest,” Dr Chalmers told investors at the Citi A50 Australia Economic Forum.
“When you re-evaluate and reallocate the capital you manage, our goal is for Australia to be the obvious and most interesting place to implement that.”
Increasing foreign investment is seen as an important way to fix Australia’s problematic productivity performance, which has fallen in recent years as capital investment such as tools and manufacturing equipment has declined.
Dr Chalmers has previously called for more investment to support capital deepening (increasing the amount of equipment available to each worker), which he described as one of the biggest challenges to productivity.
Following an economic reform roundtable in August, the government began rolling back red tape, launched an Investor Front Door pilot and began consulting on changing the super performance test to encourage extra investment.
“We are open to going further, which is why today I am publishing a new consultation document for the second tranche of foreign investment reforms,” Dr Chalmers will say.
“Our goal is a much stronger FIRB regime where risks are high and a much faster FIRB regime where risks are low.”
The government will consult on a new automatic approval process that will allow low-risk actions by trusted investors to require notification but not signatures.
FIRB will retain the power to review cases and summon them when necessary.
Additional measures include reducing reporting requirements, better managing approved investments and ensuring more decisions are made by the regulatory deadline.
“We also aim to tighten our scrutiny of investments in sensitive sectors, strengthen enforcement powers and ensure non-compliance is punished,” Dr Chalmers said.
“And we will consult on a new enforceable commitment authority and conditions to ensure that the investment is in the national interest.
“This will make the FIRB regime stronger and faster.”
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