House of Representatives
Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015
Foreign Acquisitions and Takeovers Fee Imposition Bill 2015
Register of Foreign Ownership of Agricultural Land Bill 2015
Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)The Policy is available at www.firb.gov.au/content/policy.asp.
Specifically, it is anticipated that the following classes will be prescribed: all classes in Division A (agriculture, forestry and fishing) and any of the classes in Subdivision 11 of Division C (food product manufacturing), other than class 1113 (cured meat and smallgoods manufacturing); class 1132 (ice cream and manufacturing); class 1162 (cereal, pasta and baking mix manufacturing); a class in group 117 (bakery product manufacturing); class 1182 (confectionary manufacturing) and a class in group 119 (other food product manufacturing).
'Development' is defined to mean one or more multi-storey buildings that are (or were) under one development approval and contain at least the prescribed number of independent self-contained dwellings (other than townhouses).
The value of one penalty unit is currently $180.
Subsection 4B(3) of the Crimes Act provides that the maximum penalty that can be imposed on a body corporate in five times higher than the penalty that can be imposed on a natural person.
A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers , 40, available at www.ag.gov.au/Publications/Pages/GuidetoFramingCommonwealthOffencesInfringementNoticesandEnforcementPowers.aspx, last accessed on 21 June 2015.
The Guide , 59.
The definition of 'enforcement body' in the Privacy Act currently includes the Australian Federal Police; a police force or service of a State or Territory; the Office of the Director of Public Prosecutions or a similar body established under a law of a State or Territory; the Australian Crime Commission; Customs; the Australian Prudential Regulation Authority; and the Australian Securities and Investment Commission.
The definition of 'enforcement related activity' in the Privacy Act currently includes (among other activities) the prevention, detection, investigation, prosecution or punishment of criminal offences or breaches of a law imposes a penalty or sanction; the conduct of surveillance activities; intelligence gathering activities or monitoring activities and the protection of public revenue.
The Legal Information Institute's website is at: http://www.law.cornell.edu.
See section 8E of the TAA 1953.
Parliamentary Joint Committee on Human Rights, Practice Note 2. Offence provisions. civil penalties and human rights , December 2014, is available at http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Human_Rights/Guidance_Notes_and_Resources, last accessed on 30 July 2015.
Human Rights Committee, General Comment No 43 Article 14. Right to equality before courts and tribunals and to a fair trial , CCPR/C/GC/32, 23 August 2007, [30].
General comment No. 16. Article 17 ( Right to privacy ), Thirty second session (1988 ) at [3]-[4].
Evidence Act section 18.
General Comment No 18: Non-discrimination at [13].
General comment No. 16. Article 17 ( Right to privacy ), Thirty-second session ( 1988 ) at [3]-[4].
Section 4 of the Register Bill defines 'registration trigger time', in relation to a right held by a person to occupy land under a lease or licence, to mean the latest of the following times: the time the person started to hold the right; the time the person became a foreign person; the time the land became agricultural land; or 1 July 2015.
General Comment No. 18. Non-discrimination. Thirty-seventh session ( 1989 ) at [7].
Ibid at [1].
Ibid at [13].
Financial System Inquiry Final Report , November 2014, page 2.
Government tightens rules on foreign purchases of agricultural land , 11 February 2015, the Hon Joe Hockey MP media release, http://jbh.ministers.treasury.gov.au/media-release/005-2015/.
Australia's Foreign Investment Policy , http://www.firb.gov.au/content/_downloads/AFIP_2015.pdf, 2015, page 9.
Foreign Investment Decision , 4 March 2015, the Hon J. B. Hockey MP media release, http://jbh.ministers.treasury.gov.au/media-release/014-2015/.
This includes an interest in rural land as well as prospecting, exploration, production or mining tenement.
http://shared.liberal.org.au/Share/Foreign_investment_discussion_paper.pdf
Tony Abbott. Rooty Hill People's Forum. 28 August 2013 .
Domestically, the framework has received bipartisan political support and the conditional support of most business and community stakeholders (though some stakeholders question the need for screening of foreign investment). Internationally, investor concerns with the review framework have decreased substantially over the years, while international organisation concerns with screening have also moderated (though Australia still receives some criticism from organisations and countries that do not have screening mechanisms).
"Real estate in Sydney: the big foreign buy up", Rick Feneley, Domain.com.au, 12 October 2013, http://news.domain.com.au/domain/real-estate-news/real-estate-in-sydney-the-big-foreign-buyup-20131011-2vdpd.html, accessed 9 April 2015.
UNCTAD World Investment Report 2014 , United Nations Conference on Trade and Development http://unctad.org/en/PublicationsLibrary/wir2014_en.pdf (accessed 8 April 2015), page. xv.
ABS 4102.0 - Australian Social Trends , Australian Bureau of Statistics, December 2012, http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features10Dec+2012#FARMING, accessed 31 March 2015.
7101.0 - Ag Mag - The Agriculture Newsletter , Australian Bureau of Statistics, December 2012, http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/7101.0Main%20Features3Dec%202012?opendocument & tabname=Summary & prodno=7101.0 & issue=Dec%202012 # = & view=
Agricultural Competitiveness Green Paper 2014, https://agriculturalcompetitiveness.dpmc.gov.au/key-documents accessed 23 March 2015, page 49.
Foreign Investment and the National Interest , Senate Standing Committees on Rural and Regional Affairs and Transport, 26 June 2013, Chapter 3.
This was the threshold at the time of the 2013 Senate report.
Foreign Investment and the National Interest , Senate Standing Committees on Rural and Regional Affairs and Transport, 26 June 2013, Chapter 5.
Foreign Investment and the National Interest , Senate Standing Committees on Rural and Regional Affairs and Transport, 26 June 2013, page 31.
Foreign Investment and the National Interest , Senate Standing Committees on Rural and Regional Affairs and Transport, 26 June 2013, page 38.
Foreign Investment and the National Interest , Senate Standing Committees on Rural and Regional Affairs and Transport, 26 June 2013, page 39.
This is supported by Lowy Institute Polls in recent years that suggest the majority of people do not approve of foreign investment in agricultural land. http://www.lowyinstitute.org/lowyinstitutepollinteractive/
Foreign investment in Australian Agriculture , Kali Sanyal, Parliamentary Library Research Paper, 18 February 2014, http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1314/ForeignInvest, accessed 20 March 2015.
ABS Catalogue 5609.0 Housing Finance
ABS Catalogue 5302.0 and 5352.0.
Press release: Government Tightens Foreign Investment Rules for Residential Housing , The Hon Nick Sherry, Assistant Treasurer, 24 April 2010, http://ministers.treasury.gov.au/DisplayDocs.aspx?doc=pressreleases/2010/074.htm & pageID= & min=njsa & year= & DocType=0.
Foreign Acquisitions and Takeovers Legislation Amendment Regulations 2009 ( No. 1 ), 27 March 2009.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page 64.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page 36.
Annual Report 2013-14 , Foreign Investment Review Board, May 2015, page 28.
Financial System Inquiry Final Report , November 2014, page 2.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page 84.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page 37.
At the time of publication of the RIS, the Government has already started to implement aspects of the reform package (such as the lower $15 million cumulative screening threshold for agricultural land from 1 March 2015, the agricultural land foreign ownership register from 1 July 2015 and the transferral of compliance and enforcement activities around residential real estate to the ATO from 4 May 2015.
Government tightens rules on foreign purchases of agricultural land , 11 February 2015, the Hon Joe Hockey MP media release, http://jbh.ministers.treasury.gov.au/media-release/005-2015/.
Further information is available at http://jbh.ministers.treasury.gov.au/media-release/066-2015/ and https://www.ato.gov.au/general/Foreign-investment-in-Australia/agricultural-land-register/.
Government to strengthen Australia's foreign investment framework , 25 February 2015, joint media release the Hon Tony Abbott MP and the Hon Joe Hockey MP, http://jbh.ministers.treasury.gov.au/media-release/008-2015/
In instances where a foreign investor is seeking multiple approvals to bid at auctions, a six months general approval period will be given to them to participate in an auction to purchase one property. This would alleviate the need for bidders to pay multiple application fees.
The prescribed sensitive sectors are: media; telecommunications; transport; defence and military related industries; and the extraction of uranium or plutonium or the operation of nuclear facilities.
Modernising Australia's foreign investment framework , http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2015/Modernising-Australias-foreign-investment-framework.
Since 1 March 2015, the screening threshold for foreign purchases of agricultural land has been $15 million cumulative. As a result of this lower threshold, around an additional 30 cases have been caught. This figure was extrapolated to reach the 120 estimate.
This estimate is based on the additional time spent reporting on current ownership of agricultural land and the associated labour costs.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page xviii.
Report on Foreign Investment in Residential Real Estate , House of Representatives Standing Committee on Economics, 27 November 2014, page 37.
The use and abuse of indicators on foreign ownership restrictions and taxation to assess the investment climate , Australian Productivity Commission 2013 (from Seminar and Policy Dialogue on Enhancing the Investment Environment in APEC and ASEAN economies), http://mams.rmit.edu.au/w4ge5vn9eiu5.pdf, accessed 8 April 2015.
Tax Effects on Foreign Direct Investment - No. 17. Recent Evidence and Policy Analysis , OCED, 2007, http://www.oecd.org/ctp/tax-policy/39866155.pdf, accessed 8 April 2015.
The number of applications received from individuals in 2013-14.
This consultation paper can be found at http://shared.liberal.org.au/Share/Foreign_investment_discussion_paper.pdf.
The paper can be found at http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2015/Modernising-Australias-foreign-investment-framework
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