Foreign investment laws overhauled to prioritise national security
As spy chiefs warn of unprecedented foreign interference, talks about the future of warfare have sparked the biggest change to foreign investment laws since 1975, ensuring businesses critical to our national security cannot fall into the hands of overseas powers.
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Australian businesses which are critical to our national security will remain in local hands under sweeping changes to block foreign investors taking over key assets.
The Morrison Government today unveiled new powers to prevent or even overturn the sale of critical infrastructure — including energy, transport, communications and financial companies — to overseas buyers.
Prime Minister Scott Morrison said the overhaul was needed to protect Australia’s national security.
“Investment in Australia must be on our terms, in our rules and in our interests,” he said.
Mr Morrison said that while foreign investment played a key role in Australia’s prosperity, the new laws would provide appropriate protection for critical infrastructure from foreign investors.
With spy chiefs warning Australia faces unprecedented foreign interference, high-level talks about the future of warfare have sparked the biggest change to foreign investment laws since their introduction in 1975.
The new laws, to be in place by next year, will close a loophole allowing foreign companies to buy local businesses critical to national security without any scrutiny if they are worth less than $275 million.
Authorities will also be handed new investigative powers as part of a strengthened compliance regime to ensure successful foreign investors meet any conditions slapped on their purchases.
Treasurer Josh Frydenberg said the overhaul, backed by a $54 million funding boost, would ensure that Australia “can continue to benefit from foreign investment while safeguarding our national interest”.
“The reforms will ensure that our foreign investment regime is able to respond to emerging risks and global developments,” he said.
The Foreign Investment Review Board will be required to screen the foreign purchase of all sensitive businesses, regardless of their value, and the Treasurer will be able to call in any investment if it is not captured by the board’s new powers.
The Treasurer will also have a last-resort power — which will not be retrospective — to put extra conditions on a foreign purchase or even order the buyer to sell up if national security is at risk.
The board, chaired by former Australian Security Intelligence Organisation chief David Irvine, has been analysing the gaps in foreign investment laws over the last three years.
The Herald Sun understands the security vulnerability of telecommunications companies has been a particular focus in the need for reform.
Mr Irvine welcomed the package, saying it addressed “increasing risks to the national interest whilst ensuring Australia remains welcoming and open to foreign investment”.
Amid heightened concerns about Chinese interference, Mr Frydenberg said the government would “continue to adopt a non-discriminatory approach that sees proposed investments assessed on a case-by-case basis”.
About $230 billion worth of foreign investment was approved in the last financial year, including $58 billion from the United States and $13 billion from China.
Approval processes will now be streamlined for foreign investors not deemed to pose risks.
The government plans to pass the laws this year so the new regime can start on January 1.
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