Australia to Overhaul Foreign Investment System for National Security
Australia's foreign investment system is set for a major overhaul in the name of national security. Treasurer Jim Chalmers announced the changes, aimed at protecting sensitive industries, supply chains, critical infrastructure, data, and critical minerals.
The details of the overhaul will be revealed in full on Wednesday during a speech by Mr. Chalmers at the Lowy Institute. He explained that the government is concerned about losing control of supply chains and facing potential interference.
The changes will involve a more robust vetting process, including a closer examination of how proposed projects align with Australia's national interests. This is to prevent situations where overseas interests control critical industries, leaving them vulnerable to manipulation, interference, and even sabotage or espionage.
Mr. Chalmers emphasized that the changes are not directed at any specific country, but rather apply equally to investments from all parts of the world. However, investments in sensitive areas will face increased scrutiny.
The overhaul aims to streamline the approval process for low-risk investments while devoting more resources to screening high-risk proposals. Investment proposals will be categorized according to their risk level, allowing for a more efficient allocation of resources.
Additionally, Treasury officials will have more resources to conduct on-site visits of foreign projects and ensure compliance with government requirements. This includes enforcing conditions imposed on approved investments.
The government will also strengthen its "call in powers," allowing them to review existing foreign investment projects over a 10-year period due to national security concerns. This will provide Australia with the ability to revisit deals if necessary and ensure a robust information base for making difficult decisions.
The reforms are also expected to ensure foreign investors pay a fair share of tax. This overhaul comes just before the Albanese government's 2024 budget, which will focus on both fighting inflation and bolstering economic security.