On 9 December 2020, the Parliament passed legislation that gave effect to the most significant reforms to the foreign investment framework since its establishment in 1975. On 1 January 2021, legislation came into force that introduced a package of reforms to enable the Australian Government to better address emerging national security risks that arise from foreign ownership. There were also measures to reduce the regulatory burden for certain investments that do not pose national security risks and provide greater clarity on the scope and application of the Foreign Acquisitions and Takeovers Act, 1975 (FATA). The reforms included:
- new national security powers and actions;
- expanded compliance, monitoring and enforcement capabilities;
- measures to streamline the foreign investment process for passive investors and non‑sensitive investments;
- fairer and simpler application fee arrangements;
- modernising Australia’s foreign investment IT platform; and
- the creation of a Register of Foreign Ownership of Australian Assets.
The reforms were enacted through the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020, along with supporting regulations: the Foreign Investment Reform (Protecting Australia’s National Security) Regulations 2020, and the Foreign Acquisitions and Takeovers Fees Imposition Regulations 2020.
The Post-Implementation Review (PIR) was completed to assess how effective and efficient the 2021 Foreign Investment Reforms have been in meeting their objectives. The PIR concludes that the 2021 reforms have met their objective of addressing emerging risks and global developments in foreign investment identified at the time. The 2021 reforms improved the operation of the framework by strengthening compliance and enforcement, streamlining less sensitive investments, and gathering foreign investment data to identify national security risks. The Treasury conducted this PIR in accordance with the Australian Government's Policy Impact Analysis requirements.
Assessment comments
Since 1 July 2023, responsibility for Australian Government evaluation processes rests with the Australian Centre for Evaluation. As such, this PIR has been assessed and found adequate by the Australian Centre for Evaluation. As per the Government’s Impact Analysis requirements, publication is required on the Department of the Prime Minister and Cabinet’s website.
Related links
Foreign Investment Review Reforms | The Office of Impact Analysis