GPA: USA FIRB FREE PASS TOTALLY UNACCEPTABLE

Grain Producers Australia is calling for a rigorous investigation of the recent acceleration of Australian farmland purchases, by US-owned foreign investors with serious financial clout, emboldened by major tax breaks. 

GPA CEO, Colin Bettles, said reports in the weekend’s Financial Review newspaper had raised serious questions about widening loopholes in Australia’s foreign investment rules, and whether rules governing local farmland purchases, by foreign entities, are fit-for-purpose – or needed to be overhauled. 

These matters need to be thoroughly examined, and properly addressed, to prevent irreversible impacts and safeguard the national interest, and future economic productivity, led by Australian farmers, he said. 

“If this farmland was being purchased at the same rapid rate and volume by a company from any other nation, effectively acting as a multinational corporation, with significant purchasing power – thanks to major tax advantages afforded by its country of origin – it’d be front-page news in every national publication,” he said.

“Given it’s a US-based company, the Foreign Investment Review Board has applied zero scrutiny to this $500 million purchasing spree – despite public outrage over Donald Trump’s escalating war on tariffs. 

“We need to properly and transparently examine these issues, in the current context. FIRB needs to be adequately resourced and empowered, to provide accurate advice to the Federal Treasurer on these matters, to ensure we can properly protect Australia’s national interest and safeguard our food producing sovereignty.” 

An opinion article HERE highlights GPA’s concerns about US owned enterprises being able to purchase Australian farmland, valued up to $1.46 billion, without FIRB scrutiny. This is due to a threshold, on the national interest test, introduced when the Australia-United States Free Trade Agreement (AUSFTA) was signed, in 2004. 

Mr Bettles said the House of Representatives Standing Committee on Primary Industries was a credible option for such an inquiry – or the Senate Standing Committees on Rural and Regional Affairs and Transport. 

He said GPA would also be making formal requests to Federal Representatives for such an examination, with broader future food security issues potentially part of any inquiry considerations. 

“Such an inquiry will ensure all stakeholders can submit their concerns, in gathering evidence to thoroughly evaluate these matters, and ultimately make informed recommendations, on appropriate reforms,” he said. 

“If the FIRB national interest test isn’t fit-for-purpose, and risks our sovereignty, while putting our farmers at a competitive disadvantage, then it needs to be urgently updated and modernised, before it’s too late.” 

Mr Bettles said while GPA recognised foreign investment had traditionally played an important role in Australian agriculture’s historic development, but it was also a fair, reasonable and responsible approach, to update rules as required, to ensure they’re fit-for-purpose. 

“If FIRB’s the third umpire on our national interest then we need to know what the tipping points are, on the acceptable level of foreign ownership for Australian farmland and our food producing assets – and the who, where, when, why and how,” he said. 

“Half a billion dollars in farmland acquisitions in 6-months, with zero FIRB scrutiny, doesn’t really pass the pub test – especially if the US government has provided this company with significant tax advantages, for an apparent charitable purpose. 

“It is totally unacceptable that a foreign entity, emboldened by these significant tax breaks, should be allowed to accumulate significant volumes of Australian farmland and potentially cannibalise our food producing capacity. 

“It’s responsible to examine whether these rules, first introduced when George W. Bush was the US President, are in fact suitable for today’s circumstances. Or if modernised thresholds are needed, to trigger FIRB’s application of the national interest test, and properly scrutinise foreign purchases of Australian farmland.” 

The inquiry can potentially investigate these matters in the context of these foreign tax-breaks providing competitive advantages to foreign entities, over Australian interests; especially farmers and land values. And whether these entities – while avoiding FIRB scrutiny upon entering the Australian market – are involved in any forms of ‘international profit shifting’, or in fact compliant with Australia’s transfer pricing rules, in producing, trading and transporting agricultural products. 

Potential inquiry considerations: 

• What volume/percentage of US farmland do Australian companies currently own. 

  
  

• What value can Australian companies purchase US farmland at, without attracting regulatory scrutiny. 

  
  

• Is the foreign ownership of Australian agricultural land register an adequate/effective transparency tool – is it fit-for-purpose. 

  
  

• Should Australia adopt a ‘National Farm Security Action Plan’, such as the US, which has tightened controls on foreign ownership of local farmland – including reviewing current holdings and sources. 

  
  

• Are foreign governments incentivising Australian farmland purchasing, by providing tax breaks to certain companies – and how does this contrast with the purchasing capacity, of state-owned enterprises. 

  
  

ENDS 

Further Information: GPA Chief Executive Colin Bettles: 0439 901 970