Foreign Investment Reform (Protecting Australia's National Security) Bill 2020, Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020

03 Dec 2020 speech

Ms FLINT (Boothby—Government Whip) (11:47): Our government has a proud track record of protecting our nation and our national interest of keeping Australians safe and secure. This package of bills before the House will build on that record, further strengthening our foreign investment framework and giving Australians confidence that their government has the power to ensure that foreign investment is in line with our national interest. Indeed, this package deals with one of the key policy issues I put my hand up for to represent my community in the federal parliament.

I have been a longstanding advocate for governments of all persuasions to legislate in this area in order to protect our national interest. Before my parliamentary life I was a newspaper columnist for The Advertiser in South Australia and before that for The Age newspaper in Melbourne, and I wrote a number of columns raising the need for reform in this very area. I also noted my concerns about foreign government investment in Australia in my maiden speech to this place. I know I'm not just speaking on my behalf when I raise these concerns and these issues. Safeguarding our national interest is not just a key policy priority for me; it is also a key concern to many tens of thousands of people in my local electorate of Boothby and many millions more people across Australia.
These Australians, like me, know that the broad issue of foreign investment and also that of foreign interference reach across so many parts of Australian life. Without the proper protections, oversight and enforcement options in place, these matters, left unchecked, may affect our national security, our food and water security, our critical infrastructure, our democracy, our educational institutions and, in a time of crisis, which we hope we never see, our very way of life as Australians.

The things that we seek to protect by being discerning and thorough when looking at foreign investment are the very characteristics that make our nation such an attractive investment prospect. We have a stable democracy underpinned by the rule of law, a highly skilled and educated workforce and a wealth of natural resources, combined with the ingenuity of the Australian people. All of these factors have given us one of the highest qualities of life in the world. This is what could be at risk if lawmakers, such as us, do not put the right policies and protections in place.

I'm pleased that this package of bills will add to our excellent record in this area. In amending the Foreign Acquisitions and Takeovers Act 1975 the key measures include: a new national security test requiring mandatory notification for investments in a sensitive national security business or land and allowing investments not otherwise notified to be called in for review if they raise any national security concerns; a new last-resort power, giving the Treasurer a further opportunity to review actions for which approvals have been given if exceptional circumstances arise and to impose conditions or issue a disposal order where there are no other remedies for the identified national security risk; stronger compliance and enforcement powers through increased penalties, directions powers and new monitoring and investigative powers in line with those of other regulators; integrity amendments that close potential gaps in the screening regime; and, finally, a new register of foreign owned assets, amalgamating the existing registers that record foreign interests acquired in Australian land, water entitlements and contractual water rights and expanding them to include business acquisitions that require foreign investment approval.

The other part of this package will uphold the policy position of the federal government that the cost of administering our extensive foreign investment review framework should be borne by foreign investors and not Australian taxpayers. By amending the imposition of fees associated with foreign acquisitions and takeovers we are doing just that.

The broad-ranging powers I have highlighted will heighten our government's scrutiny of proposed investments, ensuring that any investment which presents a risk to our national security is captured by this framework. It empowers our departments, agencies and government by giving more oversight and extending powers of enforcement to show that we mean business.

By amalgamating the registers of foreign owned assets we can see how these reforms will work in tandem with our already long list of policy achievements in this area. Indeed, it was our government in 2015 that at long last established the well-overdue registers which cover foreign ownership of agricultural land and foreign ownership of water entitlements. I have written in my former life as a newspaper columnist and have spoken in this place about foreign ownership of agricultural land and its register. I wrote those columns before I ever imagined I would end up in this place. In particular I posed the question: how much investment from foreign nations should we be allowing in our own country, especially in relation to our farming land but also our critical infrastructure?

In this place I've also questioned why any business that used to be government owned and has been privatised by a government of either party in this place should then be purchased by a foreign government or a foreign state owned wealth fund. In essence, if we're privatising a business, why would we then allow a foreign government to purchase that business, given that we have a policy of trying to keep government out of business and letting businesses just get on with business? Tracking and mapping any such activity and now being able to prevent it altogether, thanks to our zero-dollar threshold, means that we can better protect Australian assets and businesses and make sure we know exactly who is purchasing them or seeking to purchase them.

In addition to establishing an overarching and general register of foreign ownership of Australian assets this legislation will create extra obligations for notification of the register across a much broader range of interests. This much fuller picture of foreign ownership will ensure scrutiny and a clearer assessment of investments that may be contrary to our national interests. It will allow the government to better connect the dots and to accurately quantify the economic power any one nation is able to project into Australia whether directly or through state owned corporations. It is complementary to a bill recently passed by this House and currently before the Senate, Australia’s Foreign Relations (State and Territory Arrangements) Bill 2020. That bill seeks to establish a legislative scheme for the Commonwealth to assess arrangements between state, territory or local governments or Australian universities and a foreign government or related entities. In doing so, the government will consider whether such arrangements are consistent with our nation's foreign policy and, by extension, would ensure these deals and formal relationships are within our national interest. It goes so far as to possibly invalidate an arrangement if, once assessed, it is inconsistent with our own policy.

Certainly, Australian governments do very well in independently building and maintaining important international relationships, but our nation must take a coordinated and consistent approach to foreign policy.
We must be united in our goals as a prominent and proactive middle power on the international stage. Just as we expect private sector investments in Australia to be in line with our national security, we rightly expect the same from other Australian governments and our university sector. We are taking a truly national and whole of- government approach to an issue which affects us all. This comprehensive approach is evidenced by other rigorous reforms in areas such as critical infrastructure, combating espionage and interference, establishing the Foreign Influence Transparency Scheme and reforming our electoral laws and donations.

The tentacles of foreign interference risk have tried to extend far into many parts of Australia, sometimes cloaked under the guise of investment, and we are fighting back on every front. In protecting our nation's critical infrastructure such as ports and utilities, including water, gas and electricity, we passed the Security of Critical Infrastructure Act 2018. We also established the Critical Infrastructure Centre, which provides government with a coordinated and comprehensive assessment of national security risks to these assets. As a result of this, we now have reliable and up-to-date information on who owns and operates our infrastructure here in Australia and an understanding of any potential risks. Combined with the new authorities given under this bill—in particular, the ability to impose conditions or order divestment of an asset—these now create powerful protections for our infrastructure and the Australian industries and people they serve.

While infrastructure and its ownership may be easier to track and trace, not all possible risks to our national security are so easy to track down. Around the same time as this legislation passed, the federal government concurrently tackled the seamy underbelly of foreign influence, espionage and political interference. With a tranche of legislation passed in 2018, our government comprehensively overhauled laws relating to foreign influence, espionage and foreign political actors in Australia. This legislation was the biggest reform to Australia's counterintelligence framework since the 1970s and the Cold War. I consider this one of the largely unsung achievements of the federal Liberal government and of the 45th Parliament.

The passing of the National Security Legislation Amendment (Espionage and Foreign Interference) Act 2018 modernised and strengthened our laws pertaining to espionage and foreign influence and interference. It added new provisions for secrecy, sabotage and treason, fixing what were previously unwieldly laws that did not see a conviction under their offences in decades. This empowered our counterintelligence agencies to fulfil their brief in a modern world with various growing and emerging risks. This act also criminalised the use of force, violence or intimidation to interfere with Australian democratic or political rights, sending a clear signal to any authoritarian countries that we will not allow the tactics they employ within their borders to be exported to our nation. That is why the act also introduced a new offence for the theft of trade secrets on behalf of a foreign government, because we know that foreign interference may target individuals, institutions and infrastructure but, as we have learnt in recent years, it can also target industry. We do know that the stealing of intellectual property is a big issue for industry, particularly as we compete to innovate and be at the cutting edge. This measure is helping to protect Australian companies and, in turn, their employees' livelihoods.

To shed light on the nature of the official projection of foreign influence in Australia we established the Foreign Influence Transparency Scheme, which requires persons who are undertaking certain activities on behalf of a foreign government, a public enterprise, a political organisation or a business to register. Many if not most people in Australia who fall into these categories have legitimate purposes and noble aims, and, indeed, they may be allies to our nation. So registration as part of the scheme should not be viewed as a crime. However, a failure to disclose ties to a foreign principal actor is.

I have described our government's comprehensive approach to managing the national security risk posed by foreign investment as it is relevant to the bills before us and foreign interference as addressed by policies previously passed by this House and the other place. In doing so it is clear that these national security risks permeate throughout our society, from universities to industry, to food and water security, to infrastructure and to our farming land. Just as it touches those parts of Australian life, so too it has tried to extend itself to this parliament and others. We in this parliament are not immune to the effects of foreign interference or influence, nor should we believe that we are above scrutiny or accountability in this regard. That is why the last interlocking legislative reform I will touch on in highlighting our work in this area and speaking in support of this national security legislation is that of the electoral funding and disclosure reform we implemented before the last election.

Those who were serving as parliamentarians during the last term, and, indeed, many around Australia, would remember the immense controversy surrounding the cash donations received by a then Labor senator. That episode sparked reforms that, in reality, should have happened much earlier, because why would foreign actors bother with espionage, sabotage, intimidation or extensive efforts to project their power into the nation when they could simply and easily go straight to the top, to our lawmakers? Thanks to the reforms of our government, they cannot do so. We banned donations from foreign political entities and broadened the definition of 'political parties' to include more organisations. We reformed a new category of political campaigner, based on political expenditure, and imposed similarly strict reporting obligations that proper political parties rightly hold. These measures were underpinned by new criminal and civil penalties if these new laws were breached.

By doing this, we have helped to restore the confidence of Australians in their government and in a long, uninterrupted, stable democracy. We've restored their faith in us by holding ourselves to the standards that are quite honestly expected and by enshrining those standards in law. That is why I am proud to speak on yet another measure that will keep Australians safe and protect our national security. I commend the bills to the House.