Australian Treasury adviser opposes to impose 2nd national interest test to foreign rural land investors

14:41, April 12, 2011      

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Australia's foreign investment could be obstructed by a move to introduce another national interest test for the purchase of rural land in Australia, an inquiry said on Tuesday.

Currently, proposed foreign purchases of Australia's agricultural land has to undergo a national interest test.

Under the Foreign Acquisitions Amendment (Agricultural Land) Bill, introduced into parliament in November last year, foreign investors who want to buy more than five hectares of agricultural land would also have to notify the Treasurer.

According to Department of Treasury senior adviser John Hill, the bill means investors would face two tests, which could create confusion and hamper investment.

"We have got one national interest test that will apply to agricultural land and we have got another national interest test that will apply to everything else," Hill told a Senate Economics Committee inquiry in Canberra on Tuesday, adding that this dichotomy could hamper investment because potential investors would be unsure about their standing.

Principal adviser to Treasury's foreign investment and trade policy division Frank Di Giorgio said the proposed bill could also change the classification for rural land.

"It also risks elevating the sensitivity of agricultural land applications to a level above that of all other forms of investment, which might be problematic from an investment encouragement perspective," Di Giorgio said, quoted by Australia Associated Press on Tuesday.

"The dual national interest test also potentially reduces flexibility in assessments."

"...We also observed that the regulatory changes proposed could cut across the stand still provisions that Australia has incorporated into its various free trade agreements."

The Foreign Acquisitions Amendment (Agricultural Land) Bill was supported by independent senator Nick Xenophon and the Australian Greens.

Source: Xinhua
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