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Pressure mounts on Australian government to remove discriminatory foreign investment regulations

Xinhua, December 1, 2015 Adjust font size:

Pressure is mounting on the Australian government to reverse new discriminatory regulations regarding foreign investment into Australia's agriculture sector.

Ownership of Australia's farmland has entered the local political debate in recent years amid concerns foreign interests are purchasing properties to capitalize on growing demand for higher quality products in Asia.

The Business Council of Australian on Tuesday joined the chorus of commentators and economists claiming new regulations lowering the review threshold of foreign investment into agriculture risks the growth of the sector.

Over one trillion Australian dollars worth of investment is needed into the sector to develop its productive capabilities to meet growing global demand, driven primarily from the burgeoning Asian middle class, particularly China.

"But realizing this opportunity requires a shift in mindset and approach from government and industry," BCA chief Jennifer Westacott said in a statement, noting the investment shortfall must be met by both domestic and foreign sources.

"The government should remove specific Foreign Investment Review Board (FIRB) thresholds for agricultural land and agribusinesses, and restore thresholds to the same level as other sectors of the economy."

Chinese, Japanese and South Korean investment into Australia's agriculture that exceeds 15 million Australian dollars (10.84 million U.S. dollars) - down from 252 million Australian dollars (182.11 million U.S. dollars) - are now forced to be reviewed and approved by the FIRB following the passing of new legislation through Australia's parliament last week.

However, other countries are exempt, despite the fact investment into Australia's agriculture sector remains comparatively low to other sectors, according to FIRB.

Singapore and Thailand's threshold remains at 50 million Australian dollars (36.13 million U.S. dollars) while the United States - Australia's largest direct foreign investor -, New Zealand and Chile will maintain their one billion Australian dollar (722.67 million U.S. dollar) plus threshold.

Australia's Agriculture Minister Barnaby Joyce defended such regulations.

"Our shareholder is the Australian on the street and they have said over and over again, especially with farmland, they want proper reviews because they see this as indelibly what is Australia," he told Xinhua.

Joyce claimed the new regulations won't be an impediment to foreign investors acquiring agriculture assets, noting "they are still lined up out the street wanting to buy."

The new regulations have been widely criticized as a political ploy by the government to appease conservative Liberal National coalition members who are attuned to keeping their constituents happy for the next year's election. Endit