All foreign investment in Australia will now require approval in a Federal Government move designed to prevent international raids on struggling companies hit by the coronavirus pandemic.
Key points:
- Every purchase application from foreign investors will now be scrutinised, regardless of value
- The Government says the measures are necessary to safeguard the national interest
- But it said the move was not an investment freeze
At the moment, foreign investors need to apply for approval before purchasing land or assets in Australia if the value is over a certain threshold.
For private investors from free-trading agreement partner countries, that limit ranges from $50 million to $1.1 billion, for land and non-land proposals.
But from today, the Foreign Investment Review Board will scrutinise every single purchase application, regardless of its value.
The ABC understands members of the Government believe the changes will prevent China from taking advantage of Australia's weak financial position to snap-up strategically important assets.
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The Federal Government stated the move was not an investment freeze, and Australia recognised investment during the coronavirus outbreak was still beneficial.
But it said the temporary measures were necessary to safeguard the national interest, as the pandemic continued to wreak havoc on the economy and businesses.
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Chair of the Parliamentary Joint Committee on Intelligence and Security, Liberal MP Andrew Hastie, said the move was designed to protect Australian companies from predatory behaviour.
"Aussie businesses have taken some big hits through the COVID-19 pandemic," he said.
"We need to protect our most vulnerable from authoritarian states angling for bargains through their business fronts.
"There won't be a fire sale on our watch."
The change comes as the Federal Government prepares to unveil the details of its third economic rescue package, which is expected within days.
The Government is considering a radical suite of measures to effectively put the economy into hibernation, and the Prime Minister on Sunday said his focus was on keeping employees connected to their employers, as the coronavirus crisis closes businesses and wipes out jobs.
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The Parliament last week legislated $84 billion in financial support for workers, students and businesses affected by the coronavirus outbreak, before wrapping up for a five-month-long break.
The legislation supported both the first coronavirus economic stimulus package, worth $17.6 billion, and the $66 billion in direct financial support announced in the second package on the weekend.
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