Successive Australian governments have welcomed foreign investment on the grounds that it builds the economy and enhances the wellbeing of Australians by supporting economic growth, and introducing technologies, skills and innovation. It also provides access to markets and promotes competition among industries. Without foreign investment, governments are of the view production, employment and incomes would be lower.

The only significant limit on foreign investment in Australia is the judgment of the Treasurer as to whether investments might be contrary to the national interest, and more recently, national security. Figures provided by the Foreign Investment Review Board show this rarely occurs: the vast majority of foreign investment that triggers a review by the Treasurer is found not to be contrary to the national interest.

While the committee recognises the importance of foreign investment to the Australian economy, the inquiry raised several areas of concern that lead it to question whether the community can have confidence all investments that are approved, whether with or without conditions, are not contrary to the national interest. These concerns arise from: the sophistication of the assessment of foreign investment proposals against the national interest; the ability to ensure entities meet the promises they make when proposing an investment; the effectiveness of the Treasury as a regulator; and the secrecy that surrounds the foreign investment process.

The committee urges the government to accept the findings and recommendations of this report in the spirit in which they are offered—to improve Australia’s foreign investment regime to ensure investments are not contrary to the national interest.