The Government has released a consultation paper which sought views on a suite of proposed changes to Australia’s foreign investment regime to address the following:
- residential land – it has been identified that some of the residential land settings may incentivise non-compliance and may have distortionary effects;
- non-vacant commercial land – it is inconsistent with the 2015 reforms to still have some lower sensitivity investments subject to the framework;
- low sensitivity business investment – the broad net cast by the framework results in some relatively low value and low sensitivity business investments being captured. In particular, since many private equity funds are treated as foreign government investors due to upstream passive investment by sovereign wealth funds and public sector pension funds, the foreign investment rules capture virtually all transactions by those funds, and their investees, regardless of value; and
- commercial fees – the fees framework is difficult to apply and burdensome to administer.
The paper also provided an opportunity for stakeholders to present examples on how technical issues in the legislation could be addressed and any further ideas for reform.