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Strengthening Australia’s foreign investment framework

Regulation Impact Statement – The Treasury

On 20 August 2015, the Treasurer introduced the Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015. The bill contains a package of reforms to amend Australia’s agricultural and residential foreign investment framework. There are six key elements to the reforms, including:

  • stronger enforcement of the foreign investment rules by transferring the residential real estate functions from the Treasury to the Australian Taxation Office;
  • increased scrutiny around foreign investment in agriculture, for example by lowering the foreign investment screening threshold for agricultural land from $252 million to $15 million cumulatively, or to the extent allowed by trade commitments with particular countries, for privately-owned investors (implemented from 1 March 2015).
  • stricter penalties that will make it easier to pursue court action and ensure that foreign investors are not able to profit from breaking the rules including an infringement notice regime and increased criminal penalties;
  • introduction of application fees on all foreign investment applications, based on the type and value of the investment from 1 December 2015;
  • increased transparency on the levels of foreign ownership in Australia through establishing a comprehensive land register; and
  • modernising and simplifying the foreign investment framework.

A Regulation Impact Statement (RIS) was prepared and certified by the Treasury under the Australian Government’s best practice regulation requirements, and has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation (OBPR). The RIS estimates that the measure will increase regulatory costs by $52,000 a year. The OBPR has agreed to this estimate of regulatory costs and to the regulatory offsets.