BILLS DIGEST NO. 31, 2016–17              7 November 2016

Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016

Paula Pyburne
Law and Bills Digest Section 

Date introduced:  12 October 2016
House:  House of Representatives
Portfolio:  Treasury
Commencement: On Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at November 2016.

Purpose of the Bill

The purpose of the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016 (the Bill) is to amend the Register of Foreign Ownership of Agricultural Land Act 2015 (Register of Foreign Ownership Act) to establish a Register of Foreign Ownership of Water Entitlements (called the Water Register) to be administered by the Commissioner of Taxation (the Commissioner).

Structure of the Bill

The Bill has two Parts:

•       Part 1 of the Bill contains the main amendments to the Register of Foreign Ownership Act to provide for the establishment of the Water Register in addition to the existing Land Register and

•       Part 2 of the Bill makes consequential amendments to the Foreign Acquisitions and Takeovers Act 1975 (FATA) and the Taxation Administration Act 1953 (TAA).

Background

In 2014 a sharp rise in housing prices in Sydney and Melbourne, along with suggestions that perhaps 40 per cent of new homes were being purchased by overseas buyers, was reported.[1] In addition to the apprehension about the rise in residential real estate prices were two other concerns. First, there were claims that ‘… tough visa restrictions, which limit temporary residents to owning just their family home, were being flouted’.[2] Second, was the suggestion that wealthy Chinese investors were ‘sidestepping Foreign Investment Review Board (FIRB) regulations to buy established property’.[3]

The ongoing issues about residential real estate fed into the commentary during the second half of 2014 about the Government’s efforts to enter into free-trade agreements with South Korea, Japan and China. As part of the relevant negotiations, the Australian government ‘… sought and got a $15 million limit on investment in agricultural farms and properties, and a $53 million limit on investment in agribusinesses before they have to go the Foreign Investment Review Board’.[4] However, it was reported that as part of the free trade agreement negotiations with China, the limit on investment may be as high as $1 billion before approval would need to be sought from the FIRB.[5] It was unsurprising then that farmers expressed concerns in relation to the level of foreign investment in agriculture[6] or that the FIRB system was described as being ‘… like Swiss cheese with new inconsistency being created at random by free-trade agreements and new rules dealing with agriculture investment’.[7]

Government response

In February 2015, the Prime Minister, the Treasurer and the Minister for Agriculture jointly announced that the Government intended to tighten the rules on foreign purchases of agricultural land.[8] That being the case, the Government circulated a consultation paper intended to canvass opinions about ways to strengthen Australia's foreign investment framework, particularly around residential real estate and agriculture.[9]

Following that consultation process, on 2 May 2015 the Government announced, amongst other things, that there would be increased scrutiny around foreign investment in agriculture and increased transparency on the levels of foreign ownership in Australia through a comprehensive land register.[10]

Accordingly, on 20 August 2015 the Government introduced a suite of Bills being:

•       Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015[11]

•       Foreign Acquisitions and Takeovers Fees Imposition Bill 2015[12] and

•       Register of Foreign Ownership of Agricultural Land Bill 2015—which established a Register of Foreign Ownership of Agricultural Land (called the Land Register) to be administered by the Commissioner of Taxation.[13]

Speaking in relation to the Register of Foreign Ownership of Agricultural Land Bill 2015, Senator Day explained that the lack of reliable data as to the amount of foreign ownership of agricultural land had been identified as a significant problem:

We have also communicated with the Commonwealth about whether the Foreign Investment Review Board had any data, and similarly we were surprised to find how little they could tell us about the FIRB's work. They could not, at that time, for instance, tell us how many times a Chinese state owned corporation had sought approval or how many requests they had approved or rejected. They could not tell us and, as we know, every single purchase requires this, no matter what the price might be.

The dearth of quality data at state and federal levels pointed to the need to improve the data collection and matching, and that is a key part of what the government is delivering in this package.[14]

Request that water be included

The same dearth of quality data applies in respect to water access entitlements. The only official source of national data on foreign investment in water resources is the Australian Bureau of Statistics’ Agricultural Land and Water Ownership Survey[15] which was last updated in June 2013.

All the states and territories collect data on the entitlements and rights they confer on a person or business. However, this data does not capture information on the status of the holder as a foreign person. There is also inconsistent data on private or third-party arrangements where the rights conferred by the states and territories are subsequently leased or provided to another person through a contractual arrangement.[16]

The three 2015 Bills were referred to the Senate Economics Committee for inquiry and report.[17] The majority of Senators on the Committee recommended that the Bills be passed.[18]

The minority report of the Labor Senators supported the Register Bill but expressed concerns about the contents of the other Bills in the suite of Bills.[19]

Notably, no Australian Greens Senator was a participant in that particular inquiry.

However, during the second reading debates on the Bills in the Senate, Senator Siewert stated:

The Greens believe that for Australia to make informed and strategic decisions about our agricultural land and water resources we must accurately track and consider each bid by foreign investors, particularly sovereign nations. The Greens support the creation of a review of foreign ownership of agricultural land to constantly track overseas purchases. We support the moves of the government to introduce a register for agricultural land. However, we see no reason why the government cannot commit here and now to also introducing a register for water holdings.[20]

In the same vein, Senator Whish-Wilson stated:

Water is often more valuable than the land. In this instance, the two go together. We have had discussions with the government about getting up an amendment to include agricultural water and a holding in agricultural water.[21]

It would appear that the relevant amendment could not be drafted during the debate. It was subsequently reported that the Greens pledged to support the legislation on the condition that the Government started work on creating a register of foreign ownership of water entitlements.[22]

The Register of Foreign Ownership Act (when enacted) included a sunset provision which operates so that the Act will cease to have effect at the end of 1 December 2016 if an Act, or the provisions of an Act, providing for a register of foreign ownership of water entitlements, do not commence before that time.[23]

This Bill is a response to that provision.

Consultation process

In February 2016 the Government sought comments on a consultation paper on a National Register of Foreign Ownership of Water Access Entitlements.[24] Twelve submissions were received in response.[25] The submissions indicated a general support for the introduction of the Water Register. However, many expressed concerns about the possible compliance burden on investors.[26]

In August 2016 the Government then released exposure drafts of the proposed legislation and explanatory material.[27] Although the Explanatory Memorandum to the Bill states that 11 written submissions were received, those submissions had not been uploaded onto the Treasury website at the time of writing this Bills Digest.[28] In addition to public consultation about the exposure draft, Treasury, the Department of Agriculture and Water Resources and the Australian Taxation Office held meetings with the National Farmers Federation, Minerals Council, New South Wales Law Society, Law Council and representatives from the irrigation industry.[29]

Committee consideration

Selection of Bills Committee

At its meeting on 13 October 2016, the Senate Selection of Bills Committee determined that the Bill would not be referred for inquiry and report.[30]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing this Bills Digest, the Senate Standing Committee for Scrutiny of Bills had made no comment about the Bill.

Policy position of non-government parties/independents

As noted above, the Greens support the establishment of a register of foreign water holdings.

It has been reported that, at the time of the enactment of the Register of Foreign Ownership Act, the Nationals had also been pushing for greater scrutiny of these water licences.[31]

At the time of writing this Bills Digest no comments had been made in relation to the Bill by representatives of non-government parties or independents.

Position of major interest groups

When the proposal to create a water register was announced in November 2015, an investor in water entitlement trading company H20X, Matt Davis, was reported as saying that ‘… the creation of a water investment register would be helpful and “give clarity around ownership to the broader market”’.[32] The National Farmers Federation expressed its view that a national foreign ownership register for both land and water is critical to respond to the community concerns around investment in Australian agriculture.[33] This has, in fact, been their position for a number of years.[34] The Australian Water Brokers Association stated (as part of the Treasury consultation) that it was in favour of a centralised registry system which would ‘reduce compliance costs and complexity’.[35]

Industry water use

The Minerals Council of Australia (MCA) was particularly concerned that the minerals sector, which it considers is a relatively small user of water, would be captured by the legislation on the grounds that ‘minerals industry water use differs to that of agriculture’.[36] It stated:

A water register aligned with the requirements of the agricultural land register would impose the same reporting obligations and penalties for non-compliance. Water access arrangements are likely to be traded or modified more frequently than the purchasing of agricultural land. The MCA questions what mechanism would be used to inform a potentially foreign owned purchaser of their reporting obligation and avoid incurring penalties for non-compliance. Furthermore, it is unclear what the obligation on the company would be in circumstances where a company which already holds a water access entitlement is sold (or part sold above the trigger threshold) to foreign owners.[37]

Overlap with state registers

The New South Wales Irrigators’ Council acknowledged the benefits of aligning the national foreign ownership register of water access entitlements with the existing agricultural land register. However, it is concerned that ‘… the establishment of a Commonwealth administered register could potentially duplicate existing state registers and hence increase the complexity and costs for its administration’.[38]

The Law Society of New South Wales stated that the main disadvantage arising from the Bill ‘… is that there is potential for duplicating existing state-based reporting requirements, which increases business compliance costs’.[39]

Investor confusion

According to the Queensland Department of Natural Resources and Mines:

… the Australian Government should be mindful that the monitoring of foreign ownership [of water access entitlements] may be regarded as being inconsistent. For example, land owned by a foreign person for a purpose other than agriculture is not tracked at the national level (but it is in Queensland), yet water that is held by a foreigner to be used for any purpose will be monitored at a national level. This differential targeting by the proposed foreign ownership of water register and the existing registers for foreign agricultural land and foreign residential land creates the potential for investor confusion.[40]

Financial implications

According to the Explanatory Memorandum to the Bill its financial impact will be nil.[41]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[42]

Parliamentary Joint Committee on Human Rights

At the time of writing this Bills Digest, the Parliamentary Joint Committee on Human Rights had made no comment about the Bill.

Key issues and provisions

Preliminary matters

The Bill renames the existing Register of Foreign Ownership of Agricultural Land Act as the Register of Foreign Ownership of Water or Agricultural Land Act.[43] Item 3 of the Bill amends the simplified outline of the Act to explain that the Commissioner is required to keep two registers—being the Land Register and the Water Register.

About the Land Register

The Land Register was established so that, with effect from the Act’s commencement on 1 December 2015, foreign persons were required to notify the Commissioner of all the agricultural land they held as at 1 July 2015. In addition they are required to notify the Commissioner if they start or cease to hold agricultural land.[44]

The Land Register is maintained in two parts. The first part is called the basic part and it contains all the details of the identity of the foreign person and the land holdings. The other part, called the statistical part, contains statistics derived from the information in the basic part. The statistical part must not identify, or be reasonably capable of being used to identify, a person.[45] The Commissioner is required to publish the statistical part of the register on its website.[46]

In addition, the Commissioner must give the Minister, for presentation to the Parliament, a report about the operation of the Act and include statistics derived by the Commissioner from information in the basic part of the Register. That report is to be given as soon as practicable after 30 June each year.[47]

Item 27 of the Bill amends the Register of Foreign Ownership Act to insert proposed Part 3A—Register of Foreign Ownership of Water Entitlements and proposed Part 3B—Requirements to give information about foreign holdings of water entitlements. These new Parts are in similar terms to existing Part 2 and Part 3 of the Register of Foreign Ownership Act. The effect of the amendments is that the Water Register will operate in much the same way as the existing Land Register with the primary difference being the date from which the Commissioner must be notified and the nature of the rights to be notified.

Establishing the Water Register

Under proposed Part 3A, the Commissioner must keep a Register of Foreign Ownership of Water Entitlements which contains information about foreign persons’ holdings of certain water entitlements and contractual water rights.[48]

Foreign persons

Section 4 of the Register of Foreign Ownership Land Act provides that the term foreign person has the same meaning as in the FATA. The FATA defines a foreign person very broadly as including:

•       an individual not ordinarily resident in Australia[49]

•       a corporation in which an individual who is not ordinarily resident in Australia, a foreign corporation or a foreign government[50] holds a substantial interest—that is, at least a 20 per cent interest in the entity[51]

•       a corporation in which two or more persons (each of whom is an individual not ordinarily resident in Australia), a foreign corporation or a foreign government, hold an aggregate substantial interest

•       the trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest

•       the trustee of a trust in which two or more persons (each of whom is an individual not ordinarily resident in Australia), a foreign corporation or a foreign government, hold an aggregate substantial interest—that is a combined interest of at least 40 per cent in the entity[52]

•       a foreign government or

•       any other person, or any other person that meets the conditions, prescribed by the regulations.[53]

According to the Explanatory Memorandum ‘it is estimated that 767 foreign persons will be affected …’ by the provisions in the Bill.[54] In addition, it is expected that there will be overlap between persons who have agricultural land holdings and water entitlements. The number of agricultural businesses with some level of foreign ownership at 30 June 2013 was 806. It is estimated that 604 foreign persons who hold agricultural land would also need to register water entitlements.[55]

Relevant water entitlements

The complex nature of water entitlements in Australia is explained in Treasury’s National Register of Foreign Ownership of Water Access Entitlements[56] consultation paper as follows:

Primary responsibility for water resource management resides with the states and territories and approaches differ between jurisdictions and regions.

The nature of water rights is complex and differs across Australia. Water rights can have different characteristics and can be tied to land or not recorded in existing water registers and water planning systems (for example, certain mining arrangements).

A water access right is a state or territory statutory right to hold and/or take water from a water resource. It includes stock and domestic rights, riparian rights, water access entitlements and water allocations. Of these, water access rights, which include water access entitlements and water allocations are tradable and may be separated from land.

Water access entitlements, which are statutory rights to a perpetual share of a water resource, separate from land, have not been fully established in all regions and in all states and territories. A water access entitlement may be defined for groundwater or surface water which can be regulated water (if the flow of water is controlled by regulating structures such as dams or weirs) or unregulated.[57]

Other types of tradable water rights are irrigation rights and water delivery rights.[58]

Item 12 of the Bill inserts proposed section 5A into the Register of Foreign Ownership Act, to define a registrable water entitlement as any of the following:

•       an irrigation right (within the meaning of the Water Act 2007[59]) that relates to a water resource in Australia

•       a right (including an Australian water access entitlement[60]) conferred by or under a law of a state or territory to either hold or take water from a water resource in Australia, or both.[61]

However, a registrable water entitlement does not include stock and domestic rights, riparian rights, water allocations or a right of a kind specified in the rules.[62]

A contractual water right is a contractual right to all or part of another person’s registrable water entitlement, their water allocation or a right of a kind specified in the rules.[63]

Submitters to the Treasury consultation paper had differing views about what water entitlements should be recorded on the Water Register.

AgForce recommended that the rights to be recorded on the Water Register should be perpetual or ongoing ownership or long-term lease of entitlements to exclusive access to a share of the water resources rather than on annual allocations or short-term temporary trades. The capturing of entitlements regardless of size (volume or value) would enable comprehensive coverage.[64]

In comparison the Australian Water Brokers Association was of the opinion that all water allocation ownership above certain thresholds should be included in the Water Register. It recommended as a guide ‘… the cumulative acquisition of greater than 10GL [gigalitres] of allocation in any given season by a foreign entity’.[65]

As it stands, the Bill’s definition of registrable water entitlement is broad. It will impact not only the agricultural sector but also mining; irrigation infrastructure operators; manufacturing; and energy, electricity and waste services. However, there is capacity to limit (but not expand) its breadth by the making of rules.

However, a contractual water right will only be required to be notified if that right is reasonably likely to exceed five years. (See discussion about notification requirements below).

Constitutional validity

As with the Land Register, the Water Register is to be kept in two separate parts—being the basic part and the statistical part. The basic part must contain all the information obtained by the Commissioner under proposed Part 3B.[66] The statistical part must contain statistics derived by the Commissioner from information in the basic part of the Water Register and any corrections or updates to those statistics.[67] It is to be published on the Commissioner's website,[68] but must not identify, or be reasonably capable of being used to identify, a person.[69]

Section 51(xi) of the Constitution empowers the Parliament to make laws for the peace, order, and good government of the Commonwealth with respect to statistics. It is primarily this section of the Constitution that provides the legislative basis for the Bill. According to the Explanatory Memorandum:

Nevertheless, section 11 of the Act (including as amended by the Water Register Bill) provides for the continued operation of the Act or provisions of the Act in the event of a successful constitutional challenge. It sets out the various constitutional heads of power upon which the Act can draw if its operation is expressly confined to persons under those constitutional powers. This gives the Act (including as amended by the Water Register Bill) the widest possible operation consistent with Commonwealth constitutional legislative power.[70]

Requirement to give information

Stocktaking from 1 July 2017

Proposed Part 3B of the Register of Foreign Ownership Act, inserted by item 27 of the Bill applies to foreign persons who at the end of 30 November 2017 hold, or will hold, a registrable water entitlement or a contractual water right that is reasonably likely to exceed five years. The Bill requires such a person to give notice of the holding to the Commissioner in the approved form. The notice must be given during the period that starts on 1 July 2017 and ends on the later of 30 November 2017 and the 30th day after the day that the person starts to hold that entitlement or right.[71]

The Law Council of Australia noted that there were significant problems arising from the implementation of the Land Register:

For example, the forms developed for use with the Agricultural Land Register by the ATO have been shown to be inadequate and will need to be corrected, and liaison between the ATO and FIRB appears … to require improvement. Lessons learned from implementation of the Agricultural Land Register can then be applied efficiently to implementation of the [Water Register].[72]

The Law Society of New South Wales echoed this sentiment, stating that for the Land Register:

… the ATO developed an online registration form which was designed to capture land information based on a landholder holding one lot. In practice, most rural land holdings comprise multiple lots which rendered the online system impractical to use. The ATO then had to design a spreadsheet for use by most landholders.

The ATO was then required to redesign the spreadsheet as there was some uncertainty regarding what land details were required because there are variations between the States as to the terminology around land title information. Anecdotally, the ATO is still returning forms seeking information that is not applicable to the land in question.[73]

The requirement that notification commence from 1 July 2017 will give the Commissioner time to ensure that the relevant technical modifications to the machinery supporting the Register can be made.

From 1 December 2017

The Bill requires a person to give notice to the Commissioner if certain events relating to a registrable water entitlement or a contractual water right occur during a financial year.[74]

First, a foreign person must notify the Commissioner once he, or she, starts to hold:

•       a registrable water entitlement or

•       a contractual water right where the term of the contract is reasonably likely to exceed five years.[75]

Similarly, a person must notify the Commissioner if he, or she, becomes a foreign person when holding:

•       a registrable water entitlement or

•       a contractual water right where the term of the contract is reasonably likely to exceed five years.[76]

This requirement does not apply to a person who became a foreign person during the relevant financial year, but also ceased to be a foreign person during that year.[77] The Explanatory Memorandum provides the following example:

UJBB is a management trust which holds agricultural land and rights to water which meet the definition of registrable water entitlement. There are four shareholders in UJBB each with a 25 per cent shareholding.

During the 2020-21 financial year one of UJBB’s shareholders sells his shares to a foreign person, making UJBB a foreign person.

However, before the end of the financial year, the foreign person divests her shareholding which is bought by an Australian investor. As UJBB no longer meets the definition of foreign person at the end of the financial year, it does not need to notify the Commissioner of its registrable water entitlements.[78]

The second type of event is linked, in the case of contractual water rights, to the registration trigger time. Item 9 of the Bill repeals and replaces the definition of registration trigger time in the Register of Foreign Ownership Act, to distinguish between the time for notifying an occupation of land under a lease or licence and the time for notifying a contractual water right. Relevant to this Bills Digest, the registration trigger time in relation to a contractual water right held by a person means the latest of:

•       the time the person started to hold the right

•       the time the person became a foreign person

•       the start of 1 December 2017.[79]

The events where the Commissioner must be notified are:

•       a foreign person ceases to hold:

–      a registrable water entitlement or

–      contractual water right where the term of the contract after the registration trigger time is reasonably likely to exceed five years[80]

•       a person ceases to be a foreign person while holding:

–      a registrable water entitlement or

–      contractual water right where the term of the contract after the registration trigger time is reasonably likely to exceed five years[81] and

•       there is a change in the volume of water, or to the share of a water resource, referred to in certain rights held by a foreign person. Those rights are:

–      a registrable water entitlement or

–      a contractual water right (where the term of the contract after the registration trigger time is reasonably likely to exceed five years).[82]

If any of those events occurs the Commissioner is to be given notice in the approved form before the end of 30 days after the end of the financial year.[83] The rules may provide for exceptions to the notice requirement.[84]

Sunset clause

As stated above, existing section 34A of the Register of Foreign Ownership Act contains a sunset provision which operates so that the Act will cease to have effect at the end of 1 December 2016 if an Act, or the provisions of an Act, providing for a register of foreign ownership of water entitlements, do not commence before that time.

Item 33 of the Bill repeals that section. Item 34 of the Bill contains transitional provisions so that if the amendments to the Register of Foreign Ownership Act included in the Bill commence after 1 December 2016 then the Land Register, notifiable events in relation to agricultural land and the timeframes to notify the Commissioner of notifiable events in relation to agricultural land continue to have effect between
1 December 2016 and the time when the amendments commence.[85] However, the 30 day period in which changes to foreign persons’ holdings of agricultural land are to be notified to the Commissioner will be paused during the period between 1 December 2016 and the commencement of the amendments made by the Bill.[86]

Concluding comments

The Bill provides for a Water Register to be established. Foreign persons (or their agents) are required to notify the Commissioner if they hold certain water entitlements. The information will be used by the Commissioner to provide the Minister with periodic reports, at least annually, for presentation to Parliament. Those reports will contain a statistical analysis of foreign ownership of water entitlements but will not identify the holders of those entitlements.

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[1].              C Joye, ‘Sharp rise in foreign investors and June prices’, Australian Financial Review, 1 July 2014, p. 37; S Cauchi, ‘Foreigners grab housing’, The Age, 1 July 2014, p. 23; R Wallace, ‘$5.5bn spree sparks call on foreigners’ property grab’, The Australian, 1 July 2014, p. 6; N Mauby, ‘Foreign buyer surge: property investment up’, Herald Sun, 11 July 2014, p. 24.

[2].              L Van Den Broeke, ‘Foreign buyer probe: investors flout rules’, Herald Sun, 18 July 2014, p. 21; L Macken, ‘Cashed-up Chinese find the sweet spot’, Sydney Morning Herald, 23 August 2014, p. 16.

[3].              R Wallace and A Hepworth, ‘1pc of foreign home sales examined’, The Weekend Australian, 26 July 2014, p. 6; R Wallace and S Danckert, ‘Chinese buyers “safeguarding wealth”’, The Australian, 14 August 2014, p. 6.

[4].              A Robb (Minister for Trade and Investment), Interview with Alan Jones: radio 2GB, transcript, 28 October 2014.

[5].              P Wen, J Massola and G Hutchens, ‘Two sticking points to China free-trade deal’, The Canberra Times, 8 November 2014, p. 7. The finalised China-Australia Free Trade Agreement (ChAFTA) includes such a provision. As explained by the Department of Foreign Affairs and Trade (DFAT): ‘ChAFTA promotes further growth of Chinese investment into Australia, in particular by liberalising the screening threshold at which private Chinese investments in non-sensitive sectors are considered by the Foreign Investment Review Board (FIRB), increasing it from $252 million to $1,094 million. Under ChAFTA, the Government will continue to screen Chinese investments at lower thresholds for agricultural land and agribusiness, and in sensitive sectors including media, telecommunications and defence-related industries.’, DFAT, Investment, China-Australia Free Trade Agreement fact sheet, DFAT, 2016.

[6].              M Cranston, ‘Farmers still not sold on overseas investors’, Australian Financial Review, 25 August 2014, p. 36.

[7].              G Earl, ‘”Swiss cheese” FIRB needs overhaul’, Australian Financial Review, 29 August 2014, p. 5.

[8].              T Abbott (Prime Minister), J Hockey (Treasurer) and B Joyce (Minister for Agriculture), Government tightens rules on foreign purchases of agricultural land, joint media release, 11 February 2015.

[9].              The Treasury, ‘Strengthening Australia's foreign investment framework’, The Treasury website, 25 February 2015.

[10].              T Abbott (Prime Minister) and J Hockey (Treasurer), Government strengthens the foreign investment framework, joint media release, 2 May 2015.

[11].              Parliament of Australia, ‘Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 homepage’, Australian Parliament website.

[12].              Parliament of Australia, ‘Foreign Acquisitions and Takeovers Fees Imposition Bill 2015 homepage’, Australian Parliament website.

[13].              Parliament of Australia, ‘Register of Foreign Ownership of Agricultural Land Bill 2015 homepage’, Australian Parliament website.

[14].              B Day, ‘Second reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, Foreign Acquisitions and Takeovers Fees Imposition Bill 2015, Register of Foreign Ownership of Agricultural Land Bill 2015’, Senate, Debates, 11 November 2015, p. 8354.

[15].              Australian Bureau of Statistics (ABS), Agricultural land and water ownership, June 2013, cat. no. 7127.0, ABS, Canberra, June 2014.

[16].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, p. 5.

[17].               Details of the terms of reference, submissions to the Senate Committee and the final report are available on the inquiry homepage.

[18].              Senate Standing Committee on Economics Legislation, Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015 and related Bills [Provisions], The Senate, Canberra, 14 October 2015, recommendation 1, p. 30.

[19].              Ibid., p. 31.

[20].              R Siewert, ‘Second reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, Foreign Acquisitions and Takeovers Fees Imposition Bill 2015, Register of Foreign Ownership of Agricultural Land Bill 2015’, Senate, Debates, 11 November 2015, p. 8366.

[21].              P Whish-Wilson, ‘Second reading speech: Foreign Acquisitions and Takeovers Legislation Amendment Bill 2015, Foreign Acquisitions and Takeovers Fees Imposition Bill 2015, Register of Foreign Ownership of Agricultural Land Bill 2015’, Senate, Debates, 11 November 2015,
p. 8344.

[22].              D Hurst, ‘Foreign ownership of water licences faces scrutiny as Coalition agrees to set up register’, The Guardian, (online edition), 23 November 2015.

[23].              Register of Foreign Ownership Act, section 34A.

[24].              The Treasury, National register of foreign ownership of water entitlements, Consultation paper, The Treasury, Canberra, February 2016.

[25].              Submissions to The Treasury, Consultation into national register of foreign ownership of water access entitlements, The Treasury, Canberra, March 2016.

[26].              For example, Minerals Council of Australia, Submission to the Treasury, Consultation into national register of foreign ownership of water access entitlements, 23 March 2016; A Miller, ‘Tepid response to water register’, Stock &Land, (online edition), 22 February 2016.

[27].              The Treasury, ‘Register of foreign ownership of water entitlements’, The Treasury website, 24 August 2016.

[28].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, p. 52.

[29].              Ibid.

[30].              Senate Standing Committee for Selection of Bills, Report, 7, 2016, The Senate, Canberra, 13 October 2016, p. 4.

[31].              Hurst, ‘Foreign ownership of water licences faces scrutiny as coalition agrees to set up register’, op. cit.

[32].              P Riordan, A Grigg and M Cranston, ‘Greens, Nats set roadblock for Chinese’, Australian Financial Review, 24 November 2015, p. 1.

[33].              National Farmers Federation, Submission to the Treasury, Consultation into national register of foreign ownership of water access entitlements, 18 March 2016, p. 1.

[34].              A Vidot, ‘NFF calls for register of all farmland and water sales to foreigners’, ABC Rural, 23 April 2012.

[35].              Australian Water Brokers Association Inc., Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, March 2016, p. 3.

[36].              Minerals Council of Australia, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, op. cit.

[37].              Ibid.

[38].              New South Wales Irrigators’ Council, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, 23 March 2016, p. 4.

[39].              Law Society of New South Wales, Submission to the Treasury, Consultation into national register of foreign ownership of water access entitlements, 14 March 2016, p. 1.

[40].              Queensland Government Department of Natural Resources and Mines, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, 2016, p. 1.

[41].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, p. 3.

[42].              The Statement of Compatibility with Human Rights can be found at pages 27–33 of the Explanatory Memorandum to the Bill.

[43].              Items 1 and 2 of the Bill amend the long title and short title of the Register of Foreign Ownership of Agricultural Land Act.

[44].              Register of Foreign Ownership Act, section 3.

[45].              Register of Foreign Ownership Act, section 14.

[46].              Register of Foreign Ownership Act, section 17.

[47].              Register of Foreign Ownership Act, section 34.

[48].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed sections 30A and 30B.

[49].              Foreign Acquisitions and Takeovers Act, section 5 provides that a person is ordinarily resident in Australia if the person is in Australia for 200 days or more in any 12 month period.

[50].              Foreign Acquisitions and Takeovers Act, section 4 provides that an entity will be a foreign government if it is a body politic of a foreign country, or part of a foreign country.

[51].              Foreign Acquisitions and Takeovers Act, section 4 provides that a person holds a substantial interest in an entity if the person holds an interest of at least 20 per cent in the entity.

[52].              Foreign Acquisitions and Takeovers Act, section 4 provides that two or more persons hold an aggregate substantial interest in an entity if they hold an aggregate interest of at least 40 per cent in the entity.

[53].              Section 18 of the Foreign Acquisitions and Takeovers Regulation 2015 sets out conditions under which a general partner of a limited partnership and certain foreign government investors will be a ‘foreign person’.

[54].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, p. 45.

[55].              Ibid., p. 46.

[56].              The Treasury, National register of foreign ownership of water entitlements, op. cit.

[57].              Ibid., p. 5.

[58].              Ibid.

[59].              Section 4 of the Water Act defines an irrigation right as a right that a person has against an irrigation infrastructure operator to receive water; and that is not a water access right or a water delivery right.

[60].              Item 4 of the Bill inserts the definition of Australian water access entitlement which means a perpetual or ongoing entitlement, by or under a law of a state or territory, to exclusive access to a share of the water resources of an area in the state or territory.

[61].              Item 11 of the Bill inserts the definition of water resource which means surface water or groundwater; or a watercourse, lake, wetland or aquifer (whether or not it currently has water in it). The meaning of the terms in this definition is equivalent to those in the Water Act.

[62].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 5A(2) inserted by item 12 of the Bill.

[63].              Item 6 of the Bill inserts the definition of contractual water right into section 4 of the Register of Foreign Ownership of Water or Agricultural Land Act. Section 35 of the Register of Foreign Ownership Act provides for the Minister to make rules prescribing matters as required or permitted by the Register of Foreign Ownership Act or which are necessary or convenient to be prescribed in order to give effect to the Act. Accordingly, the Register of Foreign Ownership of Agricultural Land Rule 2015 was made on 23 November 2015.

[64].              AgForce, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, 18 March 2016.

[65].              Australian Water Brokers Association Inc., Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, March 2016.

[66].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30C(2).

[67].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30C(3).

[68].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30F.

[69].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30C(4).

[70].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, op. cit., p. 25.

[71].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30H.

[72].              Law Council of Australia, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, 24 March 2016, p. 2.

[73].              Law Society of New South Wales, Submission to The Treasury, Consultation into national register of foreign ownership of water access entitlements, 14 March 2016.

[74].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30K(1).

[75].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30L.

[76].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30N.

[77].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30K(3).

[78].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, op. cit., p. 21.

[79].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed definition of registration trigger time to be inserted in section 4 by item 9 of the Bill.

[80].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30M.

[81].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30P.

[82].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30Q.

[83].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed subsection 30K(1).

[84].              Register of Foreign Ownership of Water or Agricultural Land Act, proposed section 30U. This provision is in equivalent terms to section 30 of the Register of Foreign Ownership Act, which provides that rules may be made to exempt a person from the requirement to give notice about foreign holdings of agricultural land.

[85].              Explanatory Memorandum, Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, op. cit., p. 26.

[86].              Subitem 34(2) of the Bill.