Less point scoring, more action
THE national debate on foreign investment needed to focus on updating the regulation system rather than pointless political posturing, Liberal Senator Bill Heffernan said on Friday.
Senator Heffernan, who chairs a regional affairs Senate inquiry investigating foreign investment laws, said both sides of politics should be looking at improving the system, rather than scoring political points and fuelling a debate that was getting Australia nowhere.
His comments come after a week of posturing from all sides of politics following Treasurer Wayne Swan's approval of a Chinese consortium bid to takeover Queensland's Cubbie Station.
Senator Heffernan said evidence from the tax office to the inquiry showed overseas companies could avoid paying tax on investments in Australia by citing "humanitarian aid".
He said allowing some companies to avoid being taxed was leaking money from the nation's tax base and meant such companies did not have to compete in the international market.
"The point is that every politician has made some comment about foreign investment in the past week, but no-one has said anything about the detail of the problems in the 40-year-old Foreign Acquisitions and Takeovers Act," he said.
"I'd like to debate the weaknesses of the current system, because we've got to bring it up to date - we've got a new phenomenon on foreign investment and Australia is simply not equipped to deal with it."
Senator Heffernan said irrespective of whether an investment was being made on humanitarian grounds; such investments should still have to compete by the same rules, and taxes, as the rest of the market.
On the potential takeover of Australia's largest cotton farm, Cubbie Station, Senator Heffernan said the station should never have been approved in the first place.
He said rather than the massive water licences being assessed on the environment or economic effects, the water allocations were made "purely on the size of the storages they built".
"It was a dodgy process to begin with, and it had nothing to do with the environment, and we're now seeing the effects of that disastrous approval downstream on the Murray Darling Basin," he said.
"It was a case of a good idea at the wrong scale."
But Senator Heffernan would not be drawn on whether the station should be required to reapply under current environmental regulations if the sale process was completed.
It is understood sale negotiations are still ongoing between the station's administrators and the Chinese, Australian and Japanese consortium bidding for it.