Labor Senators support the recommendations of the Chair’s report.
Australia has long relied on foreign investment as an important source of capital to grow our economy, grow jobs and support our economic development.
As we emerge from the changes that COVID-19 has wrought on the global economy, it is fundamental that international investors know that Australia is a free and fair, stable, and rules-based investment partner.
Well-defined and articulated foreign investment policies are integral to our nation’s well-being. They help provide certainty and maintain investor confidence, especially when assisted by clear and consistent monitoring and compliance arrangements, and by fair, appropriate and proportionate fees and penalties.
The Chair’s report comprehensively details the evidence provided via submissions to the inquiry and by witnesses at the committee’s hearing, highlighting considerable unease with both the bills’ consultation phase and the absence to date of meaningful regulatory detail.
For example, as noted in the Chair’s report:
The Department of Foreign Affairs and Trade confirmed a common message from investors was the need for clear guidance on how the reforms will be implemented—particularly the definition of national security business and the proposed link to SOCI Act. This was repeated in many submissions and by many witnesses to the inquiry.
In this regard, Labor Senators note that draft regulations associated with these reforms which define a ‘national security business’ draw key definitions from the Security of Critical Infrastructure Act 2018—an Act which itself is currently the subject of proposals for significant amendment, with an exposure draft recently released by the Department of Home Affairs for consultation. It is understandable that significant uncertainty exists within the regulated community about the combined effect of these inter-related reforms.
As noted in the Chair’s Report, the Scrutiny of Bills Committee has considered the bills and awaits the Treasurer’s response to questions posed regarding the bills’ legislative impacts. These queries go to the imposition of fees and other salient matters, and ultimately draw attention to the uncertainty and limited accountability occasioned by the government’s decision to use delegated regulatory powers, rather than allow the Parliament to directly determine policy by way of the primary legislation.
Regrettably, however, the bills are being rapidly progressed through the 46th Parliament, with the government providing little opportunity for further considered debate by Members and Senators of legislation deemed pressing to ‘the national interest’.
Labor Senators are of the view that the timely, open and transparent explanation of the bills that are before the Senate Inquiry and any foreshadowed related Regulations and consequential amendments, must be made available and seriously debated before the bills’ passage.
Labor Senators make the following additional recommendations:
The definitions under the new national security test of ‘national security business’ and ‘national security land’, and the delegated regulatory powers be clearly explained and communicated for the benefit of the Australian community and businesses, and existing and future foreign investors, before the bills’ passage and proposed enactment.
There be greater transparency in the publication of decisions and enforceable undertakings made under the bills and related regulations.
Given the current economic imperatives, there be a review within six to twelve months of the bills’ commencement to update the Parliament on the impact of the legislation, whether it is achieving its stated objectives and whether it strikes the right balance between Australia’s openness to foreign investment and protecting Australia’s national interests.