Last year, Australia introduced a register to monitor foreign investment in its agricultural land. The move was in response to concerns that foreign buyers were snapping up the country’s farmland, not unlike the fears that foreign investors were doing the same with its supply of residential real estate.
Around the same time, new restrictions were imposed upon foreign investment with any purchase of agricultural land worth over 15 million Australian dollars subject to screening for approval.
Now, the first official figures have been released by the Agricultural Land Register – and they dispel the myth that Chinese investors have acquired large swathes of the country’s farmland. Treasure Scott Mirroson revealed the report on Wednesday, which confirmed that only 13.7 per cent of Australian agricultural land is owned by international investors. Top of the list? The UK, which accounts for 7.2 per cent, followed by the US, which accounts for 2 per cent. Chinese investors, on the other hand, are fifth, holding just 0.38 per cent of the country’s farmland, behind Singapore and the Netherlands.
“China was still well down the list,” Morrison told Sky News, noting that the register “informs the quality of decision making, it informs the quality of policy making and it informs, hopefully, the quality of the debate”.
Morrison, though, defended Australia’s right to work in the national interest and monitor ownership of its land.
“There’s nothing wrong with Australia exercising its sovereign right to decide whether there can be agricultural land sold to foreign interests,” he told Sky.
Earlier this year, Morrison vetoed a Chinese group’s bid to buy the S. Kidman & Co. cattle ranches, which went up for sale in 2015 and span a staggering 1.3 per cent of the country’s land.
“Foreign investment has been part of this country since Captain Cook turned up. It’s been an important part of our development and an important part of our prosperity… but it must be in our national interest and that’s why we have those very tight review thresholds and controls,” he added.
“In a lot of these transactions we’re seeing hundreds of millions of dollars being poured into new equipment, new technologies, new crops… all of these sorts of things that are supporting jobs in regional Australia.”
Australia restricts foreign investment in farmland
13th February 2015
Photo: Flannel Fotos
The Commonwealth Government announced the changes this week, highlighting the importance of foreign investment coming in “on our terms” and for the nation’s benefit.
Indeed, Australia has become increasingly concerned over levels of overseas investment in its real estate, both land and property. House prices have risen in recent months, which, combined with low supply, has left some domestic buyers unable to afford to purchase homes; a situation that some fear has been exacerbated by the entry of foreign buyers into the market.
Concerns have also arisen surrounding Australia’s food security, prompting PM Tony Abbott to introduce the new regulations.
From 1st March 2015, any purchase of agricultural land worth over 15 million Australian dollars will be subject to screening for approval. This threshold has been lowered from 252 million.
The new $15 million screening threshold will apply to the cumulative value of agricultural land owned by the foreign investor, including the purposed purchase.
From 1st July 2015, the Australian Tax Office (ATO) will also start collecting information on all new foreign investment in agricultural land regardless of value, while a foreign ownership register will be introduced as well.
To provide an accurate log of foreign investment, the ATO will commence a stocktake of existing agricultural land ownership by overseas interests.
The announcement could mark the start of a shift towards increased regulation of all foreign investment in Australian real estate.
“The Government is currently considering the recommendations of the Parliamentary Committee inquiry led by Kelly O’Dwyer MP regarding foreign investment in residential real estate,” added Abbott’s statement.
“There does need to be better enforcement of the rules for foreign purchases of existing homes so that young people are not priced out of the market.”
“The Government will announce details of the reforms to foreign investment in residential real estate in coming weeks,” confirmed the statement.
“Foreign investment always has, and will continue to be, integral to Australia’s economic success.”