The Australian public needs to have confidence that foreign investment is in the national interest, said Tony Abbott as he released a paper proposing tighter rules for foreign acquisition of agricultural land.
The Opposition Leader stressed that the Coalition unambiguously supports foreign investment, while shadow treasurer Joe Hockey said Australia needs a stable business environment with predictable rules.
Acting Prime Minister Wayne Swan said the Coalition were "all over the shop" with their foreign investment plan.
"It's a dog's breakfast," Mr Swan told reporters in Adelaide, pointing to Mr Hockey's recent statement that he did not see the need for "dramatic changes" to foreign investment rules.
And Trade Minister Craig Emerson has slammed the Coalition's proposed change as "economic Hansonism".
The policy paper proposes that Australian regulators run the ruler over any foreign acquisition of agricultural land valued at $15 million or more. The current trigger is $244 million.
More agribusiness transactions would also be in the Foreign Investment Review Board spotlight.
The policy also recommends scrutiny by the board when a proposed investment represents 15 per cent or more in an agribusiness valued at $244 million, or exceeds $53 million.
"Obviously, I'm flagging some very important policy directions," Mr Abbott told reporters in Sydney today, adding that the Coalition would now consult the public on the plan.
Nationals Leader Warren Truss – who wrote the paper with deputy Opposition Leader Julie Bishop - said Australia did not value agricultural land as much as it should.
"I hope that in time, Australians will appreciate that food security is important," Mr Truss said.
Dr Emerson said the proposal was irresponsible and accused the opposition of "economic Hansonism" over its claims about the levels of foreign investment into Australia.
Dr Emerson said the opposition was manufacturing a problem where it didn't exist, as there had been a "negligible" 0.1 per cent rise in the level of foreign ownership in Australian agricultural land between 1984 and 2010.
"They're reacting to something where they themselves have helped stir up misinformation and then say they're going to fix it," he told ABC radio this morning.
Finance Minister Penny Wong told Sky News that foreign investment "as a first principle" was in the national interest and that the Coalition's proposal would increase red tape.
The release of today's paper follows running tensions between Liberals and Nationals over Australia's politically sensitive foreign investment regime.
Mr Abbott copped a blast from some analysts and the Gillard government during his recent trip to China over comments interpreted as hostile to future foreign investment by state-owned enterprises.
He said it would rarely be in Australia's interests to allow state-owned entities to control Australian businesses, putting him at odds with some business leaders and Liberal premiers.
The paper is not revolutionary on the fundamentals of Australia's foreign investment regime. It proposes the current "uncodified" national interest test be retained, rebuffing some internal pressure from Nationals to toughen the arrangements.
The proposed changes would also not apply to any countries with existing preferential investment deals struck under bilateral free trade agreements - like the United States.
But in broad terms the overhaul presages significant scrutiny of more transactions in the Coalition's heartland - making it less likely Australia's prime farm interests would be snapped up by foreign investors.
Nationals senator Barnaby Joyce told a grain industry conference in Melbourne this week the current $244 million threshold for an assessment of a proposed farmland purchase was so high it was ridiculous.
He said he was a strong believer in foreign investment but "we've got to make sure that we do it with our eyes open", and keeping farm ownership mainly in local hands was a goal most Australians would back.
The Coalition policy's new $15 million trigger for farmland would cover not only single purchases but also cumulative smaller transactions by a foreign investor adding up to that value.
The Victorian Farmers Federation wants the review board to assess foreign efforts to buy rural land worth more than $5 million.
Mr Abbott has flagged a national register to keep track of foreign property investments - a change sought by peak farm organisations - and more transparency to ensure would-be buyers disclose any government involvement.
The current Foreign Investment Review Board system subjects all proposed acquisitions of Australian farmland by overseas governments or state-owned enterprises to automatic scrutiny, regardless of price tag.
The new Coalition paper suggests more probing to ensure investments badged as private are not subject to government influence. Any foreign applicant subject to the national interest test would have to disclose any "direct or indirect ownership or direct source of influence by a foreign government".
The Coalition is asking for submissions on the paper by the end of October.
Read more at The National Times.