Foreign Investment Review Board processing times criticised by David Williams

There is a “serious need” for the Federal Government to separate politics and trade on the issue of foreign investment in agriculture, according to a key investor.

THE Federal Government should outsource scrutiny of foreign investment applications in Australian agriculture if it can’t improve processing times.

That’s according to corporate adviser and investor David Williams who has taken aim at a blowout in Foreign Investment Review Board waiting times, saying there is a “serious need” for the Government to separate politics and trade on the issue.

In March, Treasurer Josh Frydenberg announced all investment plans by overseas companies or businesses would require FIRB approval during the coronavirus pandemic “regardless of value or the nature of the foreign investor”. It also extended FIRB’s time frames for reviewing applications from 30 days to up to six months.

Under former rules, only takeovers worth $1.2 billion or more and farmland worth $15 million or more required FIRB approval.

At the time the Government said the changes were made in an attempt to ward off predatory offshore takeovers of financially stressed businesses.

Mr Williams, the managing director of Kidder Williams, told the Global Food Forum last week the FIRB application processing was currently “the single-biggest issue” regarding investment in Australian agriculture.

“On their own timetable that is a six-month process but if you look at many of the assets that have been before them in the last nine months – six months is actually the minimum, not the maximum,” Mr Williams said.

“The crying shame is that it is only public servants who somehow think that a six-month waiting period to do a deal is acceptable to anybody.

“You can’t keep a buyer on the hook, or even a seller on the hook for that matter, for six months let alone have their banking and equity in place as well. If the FIRB can’t do it in time, let’s outsource it.”

Liz O’Leary, the head of agriculture at Macquarie Infrastructure and Real Assets which is the second-biggest investor in Australian agriculture with assets worth more than $2.7 billion, said FIRB processes had become “incredibly time consuming” and “contradictory” and warned they might scare some investors off.

“And increasingly we are seeing a cost burden applied to this process that is significantly higher than any other asset class,” Ms O’Leary said.

“The transparency and having the process is not the issue. The issue is simply competitiveness. There is not an endless stream of equity seeking this asset class and that equity is also comparing Australian agriculture and investment to other jurisdictions.”

LAWD chairman John McKillop said “most of the angst about foreign investment in Australian agriculture comes from the cities rather than in the bush itself”.

“So if you ask someone if they want Australian farms to be owned by Australians or if they want them to be owned by foreigners, of course people give a similar answer that they want them to be Australian owned but that is not the reality of where the capital comes from.”

Agriculture Minister David Littleproud said he didn’t expect any changes on the Government’s foreign investment rules in the short term.

“I don’t think this is detracting a significant amount of foreign investment – it is simply making sure there is a closer oversight about the concentration of investment whether that be in industry or geographically and whether it is in the national interest,” Mr Littleproud said.

Treasurer Josh Frydenberg was contacted for comment.

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