In the last few years, public interest in foreign investment in Australia has been heightened by the substantial, and ever growing, investment in the agricultural sector. With a Coalition victory in the Federal election, it is now relatively certain that a tightening of the foreign investment regulatory environment will occur. 

As readers may recall, a report dealing with Australia’s foreign investment framework was issued by The Senate Rural and Regional Affairs and Transport References Committee (Committee) in June 2013 (Report). The Committee’s investigations were predominantly focussed on Australia’s approach to foreign investment in agriculture.

The Report’s recommendations, if implemented, could result in the most significant changes to Australia’s foreign investment policy since the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) was enacted.

The Committee acknowledged the significant role foreign investment has played and is to play in Australia’s development but did find that FATA “was significantly deficient in effectively managing a number of key challenges facing Australian agriculture”.

Some of the key recommendations made by the Committee included:

  • the establishment of an agricultural land register (Register) to monitor both divestments and investments.  An initial stocktake would be undertaken and there would be no minimum threshold for reporting on the Register
  • an increase in rigor and transparency of the examination process for foreign investment applications, including a forensic examination of:

                  o    company structures; and

                  o    the relationship between a foreign government’s acquisition 
                        strategy (such as food security) and commercial operations

  • the amendment of FATA to create more effective compliance mechanisms and tools (in addition to forced sales) so that compliance matters can be resolved more efficiently and in proportion to the severity of a breach
  • increase the transparency and public awareness of the national interest test so as to provide unambiguous instruction to foreign investors regarding their obligations and also give the public confidence that the test is being rigorously and fairly applied
  • reducing the threshold for private foreign investment in agricultural land to $15 million and including a requirement for FIRB approval once cumulative purchases of $15 million have been reached
  • requiring FIRB approval to be obtained where an investment of greater than 15% in an agribusiness valued at more than $248 million or exceeding $54 million
  • giving greater consideration to the effect on local economies, particularly rural communities, when assessing foreign purchases of agricultural land.

The Committee also recommended that the government establish an independent Commission of Audit into Agribusiness, or similar body, to develop a comprehensive policy approach to Australian agriculture.  The Committee suggests that this review could further investigate changes to the Foreign Investment Policy national interest test and improve foreign investment compliance regimes. 

The Report was prepared by the Coalition members of the Committee and included a dissenting report by then Labour Government Senators.  

With a Coalition Federal Government as of 7 September 2013, we would expect to see the recommendations made in the Report to be implemented in the near future.

If the recommendations made in the Report are implemented, the result will be increased restriction, or at least increased compliance requirements, for foreign investors. 

Author: Vanya Lozzi

Contact Details


Ron Eames, Partner
T: +61 7 3135 0629


Vanya Lozzi

Special Counsel
T: +61 2 8083 0462

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed above. 

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