• AST PROD has released a commission research paper Foreign Investment in Australia.
• Reviewed Australian foreign investment trends, drivers, effects and government policy.

Key Points

• Benefits the economy, but some risk that can be managed by government policy.
• Over past 2 centuries, it has supported Australia economic development by permitting more capital investment than domestic savings would have otherwise allowed.
• Positive impacts include new technology, improved management practice/competition, but also negatives: potentially less competition, social and environmental costs.
• To balance benefits and risks, foreign investment regulated via several mechanisms.
• Foreign investment policy has become more prominent, but policy change piecemeal,
• Thresholds vary by investor country, sector and type, approval conditions use growing.

Suggestions

• Publishing the reasons for blocking proposals, more timeline certainly, and aligning applications fees with actual cost of administering the screening regime.
• Would increase transparency, enhance predictability lower screening regime costs.