The AFR is reporting this morning that:
Opposition Leader Tony Abbott has stepped up his push for a tighter foreign investment regime…
Mr Abbott yesterday hinted he would change the Foreign Investment Review Board’s make-up as he dealt with a Coalition split on a stricter national interest test by siding with the Nationals in support for changes to the regulator.
“I think you can always improve things and we’ll be releasing a paper shortly that will include some improvements, but we have a good foreign investment review regime; it served us well in the past and I think it will serve us well in the future,” Mr Abbott said in Sydney on Sunday.
…Mr Abbott said: “We think it is important that the FIRB reflects the range of businesses in this country; that’s not to criticise the FIRB as it currently stands, that’s not to be critical of any of the current members of the FIRB.
“But I think it is important for complete public confidence in the process that we see the widest possible range of business people and the community represented in the board.”
As I’ve written many times and for many years, FIRB definitely needs an overhaul. It is far too opaque and its current structure gives politicians too much cover to stick their finger in the air and gauge populist opinion before making a decision on any foreign direct investment (FDI).
FIRB needs clear rules about what constitutes the national interest and a much more transparent process in its rulings about such. Stacking the FIRB board with a cronies from specific industries is the opposite.
There are five reasons why protecting foreign direct investment is worthwhile.
- free trade increases prosperity (I”m not going into why this morning).
- free trade prevents nations from invading their neighbours to obtain resources that they do not possess. Australia has direct experience of the opposite of this in the WWII Japanese expansion.
- what better way to fund the Australian current account deficit than through capital that will expand export production? Does it matter that it’s foreign owned? No. The jobs are here. The taxes are here. If war breaks out you can simply nationalise the production. Food security is NOT threatened by FDI.
- do we really want to hand more power to vested interests in policy choices?
- if I’m a farmer then why on earth would I want to prevent FDI from marching in and overpaying for my assets?
The Abbott Declaration and its proposed re-jigging of FIRB so that a greater number of vested interests can control policy behind closed doors is the opposite of good policy. It is nationalism not national interest.
Again, good on the AFR for chasing this. What a joke is The Australian, pretending to defend “free markets” while ignoring this issue. It’s become a simple Coalition pamphlet.
