From 31 March 2016, the Foreign Investment Review Board (FIRB) at the Federal Treasury will strictly review all critical infrastructure assets valued at more than $250 million sold by State and Territory governments to private international investors. This will further enhance the Australian foreign investment framework to safeguard national interests.
The critical infrastructure assets will include airports, Sea ports, public transport, electricity, gas, railways, telecommunications and nuclear facilities. Several high profile infrastructure projects in the works such as Port of Melbourne, Fremantle Port, Ausgrid and Endeavour Energy would also be covered by this new regulation.
This stiffened rules on foreign ownership is brought down on the back of the growing criticism over the 99- year lease of the Darwin Port by the Northern Territory government to Landbridge Group, a Chinese private sector owned company based in Shandong Province of China. This transaction also drew criticism from the Australian Defence security analysts. Darwin Port was valued at $506 million.
This lease of Darwin Port was affected on the basis of the old rules which wouldnโt be allowed under the new rules. It is to be noted that under the old rules, an assessment by the FIRB is required only when State and Territory assets are sold to a foreign state owned company.
China has an appetite to establish economic connectors in various parts of the World. This is evident in numerous recent initiatives of China including the 21st Century Maritime Silk Route and the Silk Road Economic Belt, the $100 billion Asian Infrastructure Investment Bank, the $40 billion Silk Road Infrastructure Fund, the internationalisation of the Yen, the shifting of its industrial production offshore to be closer to its export markets and the various free trade agreements it has recently entered into with the rest of the World. Hundreds of billions of dollars in Chinese funds are being invested abroad in various strategic sectors. Infrastructural investment and control over that infrastructure are key in extending Chinese power across the regions.
Australia is the natural extension of this bold ambition of China. Darwin Port is intended to be a crucial link with itโs new 21st Century Maritime Silk Road. It will provide Chinese shipping and naval vessels with access to Australia, the Indian Ocean, the South Pacific, Indonesia and PNG over the centuries to come, facilitating the economic dominance for China.
This review of foreign investment is timely but does not go far enough. Prices on the Australian housing market are being inflated by the deliberate marketing of residential properties to overseas investors. In some cities their are several thousand homes and apartments laying vacant after purchase by foreign investors. There are entire residential and commercial developments aggressively marketed to overseas investors. The media here in Malaysia is full of promotions for apartment developments and houses in major Australian capitals and this is not the only country where these are advertised. I know of a number of people who have purchased multiple properties in Australia both as an investment and as a potential sanctuary should instability make living in their home country difficult. In Malaysia, the shoe is on the other foot. I have lived and studied here for 6 years and am now in the process of making making my residency more permanent. Even though I am married to a Malaysian national I am restricted to only buying property at the high end of the housing market and have even stricter limitations on my ability to source local financing for a property purchase. All this is designed to protect lower and middle income earners ability to afford a home without the inflation of property prices caused by the sort of rampant speculation driving up property prices in Australia’s major cities, For decades Australian governments have been selling off the family silver to the highest foreign bidder to the detriment of Australian citizens. If it is good enough for Malaysia to put some controls in place to protect its citizens in the housing market then it is way past time for Australian governments to do the same for their citizens..