Australia’s wealth and economic growth has been underpinned by foreign investment. For centuries, it has created businesses and jobs, and led to the transfer of new technology, skills and innovation.
However, in a world of rising geopolitical tensions, Australia is tightening up its foreign investment laws in lockstep with many other Western nations.
Treasurer Jim Chalmers has flagged that in next month’s federal budget, when he outlines in detail the controversial Future Made in Australia Act, he will also reveal how the government intends to “strengthen” foreign investment laws. He has noted this will include “more effective screening” of proposals, and a desire to “streamline” laws for “investment that is in our national economic and security interest”.
Federal Treasurer Jim Chalmers wants “more effective screening” of foreign investment in Australia and is expected to release more detail of changes in next month’s budget.Credit: Darren England
Business and dealmakers are nervously watching what those changes might be, given many believe the laws are already robust. Australia’s foreign investment laws were strengthened in recent years, particularly around investment that was targeting sectors that might pose a national security risk, from critical infrastructure such as ports and electricity grids to telecommunication companies, defence businesses and critical minerals.
Australia is not alone in tightening its foreign investment laws. Countries including Germany, Canada, the United States, Britain and Singapore have been erecting more and more barriers to foreign investment in the name of national security.
Most of the tightening is in response to China’s growing hegemony. China’s rising political and economic power and growing sense of entitlement under President Xi Jinping have stoked fears and insecurity. Nowhere is this more evident than in America.
Such fears have been exacerbated by China’s backing of Russia’s war against Ukraine, its use of foreign investment to expand its political influence with Pacific and African nations, and its aggression in territorial claims in the South China Sea, and also over the self-ruled island of Taiwan.
Also, China’s use of its economic clout as the world’s second-largest economy to punish nations it has found itself in conflict with has raised concerns about strategic risk. China imposed trade sanctions on $20 billion of Australian exports after political tensions between the two countries escalated under the Morrison government.
Treasurer Jim Chalmers wants stronger foreign investment rules. What does that mean?
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26.04.2024
Australia’s wealth and economic growth has been underpinned by foreign investment. For centuries, it has created businesses and jobs, and led to the transfer of new technology, skills and innovation.
However, in a world of rising geopolitical tensions, Australia is tightening up its foreign investment laws in lockstep with many other Western nations.
Treasurer Jim Chalmers has flagged that in next month’s federal budget, when he outlines in detail the controversial Future Made in Australia Act, he will also reveal how the government intends to “strengthen” foreign investment laws. He has noted this will include........
© The Sydney Morning Herald
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