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We're joined by Lea Fua, who is a Senior Associate in the Corporate Advisory and Governance Team at HopgoodGanim; Lea thanks for joining us at BRR Media.
Thanks Kate, good to be with you this morning.
Now Lea as part of our discussion with China about a free trade agreement it's suggested that there could be some changes to FIRB, where do you think we could see these changes?
Kate the likely changes will probably be primarily made to the Foreign Acquisitions and Takeovers Act, this is principally the Commonwealth Act that deals with inbound foreign investment into Australia, in addition to that it's likely that we'll see changes to a policy document that the Foreign Investment Review Board has on issue called Australia's Foreign Investment Policy. That policy document will probably need to change to accommodate any higher investment thresholds for Chinese investors.
And what will the changes mean for Chinese investment in Australia?
Well if as a result of the free trade negotiations with China, the Chinese are allowed a higher investment threshold, which in our view is probably likely to be about $1 billion which is what will align with the existing threshold for US and New Zealand investors, as opposed to $248 million for everyone else. Obviously the clear benefit for Chinese investors in Australia will be less of their investments into Australia will require FIRB approval, and in our view that's a positive element. I guess at this stage it's still too early to tell what the details will be because the Government hasn't released it and this is likely to be part of their free trade negotiations with China. I think the key change in my view will be how the Government will deal with investments by Chinese state owned enterprises and the suggestion is that the Government will relax the requirement for all investments by Chinese state owned enterprises into Australia, but again the details haven't been released so it's still too early to say.
One of the things that we were talking about last year was changes to investment in agriculture and there was a proposed $15 million farm land threshold for foreign investment approvals, do you think we're likely to see this amended as well as part of the negotiations?
I think so Kate, so that particular investment threshold is part of the Federal Coalition's policy platform which they took to the last election. This has also been a recommendation by the rural and regional affairs and transport reference committee of the Commonwealth Senate, so it's likely that the change will be made as to a timetable that hasn't been released, but the most recent comments publicly by the Trade Minister Andrew Robb, indicates that he is not considering any change to this particularly policy, but as to a timetable it's still to be seen. The Government hasn't released any details yet so I think we'll just have to wait and see.
Okay well I guess we'll have to wait and see what does happen as we move throughout the year but Lea thanks so much for joining us.
Thank you Kate.
That was Lea Fua, who is a Senior Associate in the Corporate Advisory and Governance Team at HopgoodGanim. Listeners if you have any questions you can send them through either using the panel on your screen or of course via email to email@example.com.