The Federal Treasurer, Josh Frydenberg has denied the new crackdown on foreign asset buys in Australia is aimed at China or any other country.
The Morrison government on Sunday night ended all exemptions for foreign asset purchases which means everyone, no matter the size, must go to the Foreign investment review board for clearance.
The government says the tightening of the investment rules does not mean Australia has closed for business, but that the new regime is there to stop cheap, predatory bids at a time of market weakness.
Treasurer Frydenberg said the government was cutting the takeover threshold from $1.2 billion to zero in order to ensure any overseas bid could be blocked at his discretion after scrutiny by federal officials.
While the new rules apply to all overseas buyers, no matter where they come from.
The Treasurer said on breakfast TV this morning (Monday) that “This is not [about] one particular country,”…”In fact, China last year was the fifth-largest foreign investor in Australia with investments of around $13 billion. This compares to the United States which was the leading foreign investor of $58 billion.
“What is very clear to us, and also to the European Union and other countries around the world, [is that] in these extraordinary times need to more strictly assess the foreign investments that are coming into Australia.”
Mr. Frydenberg said on Sunday night that FIRB would also extend the deadlines for existing and new applicants from 30 days to six months.
“This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest,” he said in his Sunday night statement.
“However, these measures are necessary to safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses.”
Mr. Frydenberg said the temporary change would be achieved by reducing to zero dollars the monetary screening thresholds for all foreign investments.
Chinese state-owned enterprises already face tighter scrutiny than private companies, but the previous thresholds allowed many buyers to acquire Australian assets without triggering a FIRB review.
Investors from nations with free trade agreements have not required FIRB approval for acquisitions below $1.2 billion, but the government’s new policy ends that exemption.
Meanwhile, the Treasurer Monday morning confirmed there will be an announcement today on the government’s wage subsidy. But he would not talk about details in his interview with ABC News Breakfast.
