(Australian Associated Press)
The federal government has tightened foreign investment rules after global fears about the economic impact of the coronavirus caused the value of Australian businesses to fall.
There are concerns cashed-up foreign predators could take advantage of the fall in asset values fuelled by a massive slump on the Australian Securities Exchange.
The temporary change, which came into effect late on Sunday night, would protect Australia’s national interest, Treasurer Josh Frydenberg announced.
From now all proposed foreign investments, subject to the Foreign Acquisitions and Takeovers Act, will require federal approval, regardless of value or the nature of the foreign investor.
“This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest,” Mr Frydenberg said in a statement on Monday.
The temporary change involves reducing to zero dollars the monetary screening thresholds for all foreign investments under the act.
“By temporarily reducing the foreign investment thresholds, the Australian government will ensure appropriate oversight over all proposed foreign investment during this time,” Mr Frydenberg said.
The treasurer played down suggestions the measure was partially aimed at potential investment activity by Chinese state-sponsored firms.
“These measures are not directed at one particular country,” Mr Frydenberg told Sky News.
The Treasurer noted China was Australia’s fifth largest investor last year with investments of around $13 billion while the US was the number one investor with investments of around $58 billion.
“Those thresholds that have previously been in place are not necessarily appropriate for right now because these are extraordinary times that we are living in,” he added.
The government stressed the importance of foreign investment in helping many businesses to secure jobs and support Australia’s economic recovery beyond the coronavirus emergency.
The measure will remain in place for the duration of the current crisis.