Rural agents back foreign investment changes

Perth 17 February 2015

The Real Estate Institute of Western Australia says that its rural members are supportive of recent changes made to foreign investment in agriculture.

On 11 February, the Abbott government announced a tightening of the rules around foreign purchases of agricultural land in a bid to have a more transparent system. The changes will apply from 1 March 2015.
The Prime Minister said the restrictions would result in “the right investment” for the nation.

“Foreign investment is important to us but it’s got to be investment that serves our national interest, it can’t just serve investors’ interests,” Mr Abbott said.

Starting next month, the Foreign Investment Review Board (FIRB), screening threshold for purchases will be reduced from the current $252 million to $15 million, with a foreign ownership register of agricultural land to be established.

Chairman of REIWA’s Rural Network, Mr Don Fry, noted that the reporting threshold had been reduced significantly but said transactions at the $15 million mark were ‘very small in number in Western Australia’.

“Rural agents are more concerned with the FIRB being adequately resourced to deal with the inflow of transactions and to ensure this doesn’t unduly hold up the transaction process,” Mr Fry said.

Mr Fry said the WA agriculture industry relied on offshore capital investment to further develop the capacity of the state to export and trade, so investment was very welcome.

“While there is some concern from business groups with the lowering of the threshold to $15 million, REIWA does not see this as a major threat to the incentive to invest in WA agriculture. Rather, rural agents consider that it creates transparency and provides further information around foreign investment levels in our state,” he said.

REIWA understands that no application for the purchase of agricultural land has been rejected by the FIRB to date.

The Prime Minister said that the Australian Tax Office will start collecting information on all new foreign investment in agricultural land from 1 July, regardless of value.