News Stories - 26 November 2009
Foreign Investment Policy
Recent media commentary – including in international press – has questioned Australia’s openness to foreign investment. Despite what this commentary may suggest, the Australian Government has not tightened its foreign investment policy. Australia continues to welcome and encourage foreign investment that is consistent with its national interest, regardless of source country.
Foreign Minister Stephen Smith said during a public address in October that the facts must be stated clearly and calmly when addressing misconceptions about foreign investment. Australia’s prosperity had been built on it being a great trading nation, and also an attractive and welcoming destination for foreign investment.
Successive Australian Governments have recognised the importance of foreign investment inflows to expand the economy, over the medium-to-long term, by creating new jobs and supporting existing jobs; boosting innovation, research and development; introducing new technologies and techniques; and promoting a competitive environment within the business sector.
Foreign Direct Investment (FDI) offers clear benefits to Australia. Economic consultancy Access Economics reported in October 2009 that FDI contributes 37 per cent of research and development ((R&D); 50 per cent of exported goods; 46 per cent of value of services exported; and 14 per cent of employment.
Australia offers investors a strong and resilient economy and a business friendly regulatory environment. Australia’s other advantages include a democratic and stable base in the fastest growing region in the world; a highly skilled workforce with multilingual capabilities; innovation and creativity with a strong focus on R&D; a cost competitive location; and excellent quality of life.
Australia already has significant levels of foreign investment as of 2008, the total stock of foreign investment in Australia was $1.7 trillion; the three largest sources being the United Kingdom (25 per cent), the United States (24 per cent) and Japan (5 per cent).
China has become an increasingly important investor in Australia. Australia welcomes China’s increased investment interest as a positive development that will benefit both countries. Since November 2007, the Government has approved over 110 Chinese investment proposals worth more than $39 billion combined; only five of these approvals involved undertakings, conditions or amendments.
Australia’s stock of outward FDI has increased considerably to $1 trillion in 2008. Australia seeks reciprocal openness and access for its foreign investment from its economic partners, through the WTO Trade in Services negotiations; and investment provisions in free trade agreements.
Regulatory process
Australia, like other countries, screens significant foreign investment proposals to ensure that they are consistent with Australia’s national interest. The Foreign Acquisitions and Takeovers Act (FATA) provides for Government scrutiny of certain foreign investment applications.
The Foreign Investment Review Board (FIRB), an independent advisory board, reviews applications by foreign interests of direct investment in Australia and makes recommendations to Government on whether applications are suitable for approval by the Government. FIRB publishes guidelines for foreign investment proposals on its website http://www.firb.gov.au; and encourages inquiries from potential foreign investors.
The Australian Treasurer is the final arbiter of all foreign investment applications. All but a small number of applications are approved unconditionally.
Foreign investment policy is applied without prejudice across the board, but exceptions can apply as a result of specific bilateral agreements, such as Free Trade Agreements (FTAs), which Australia has entered into. For example, under the FTA with the United States, US investors are subject to higher thresholds above which foreign investments must be assessed by the FIRB.
All foreign investment proposals are individually considered on a case by case basis for any national interest implications. Investments by foreign governments and their agencies (including state owned enterprises) are considered against the principles released by the Treasurer on 17 February 2008.
The Government announced (August 2009) amendments to the FATA to simplify and streamline the administration of foreign investment policy, including a single private investment screening threshold: only private investments of 15 per cent in an existing business worth $219 million or more are now subject to review. All direct investments by foreign governments and their agencies still need to be notified, irrespective of the size of the proposed investment.
The new threshold will be indexed for inflation as of 1 January each year; and private investors will no longer be required to advise the Government of the establishment of a new business valued above $10 million.
The Australian Trade Commission (Austrade) is responsible for the facilitation and promotion of foreign direct investment into Australia. Potential investors are encouraged to draw on Austrade's international network of trade and investment commissioners who can provide practical advice and market intelligence on investment opportunities in Australia.
Further information - including a list of priority areas for investment is available at http://www.austrade.gov.au/invest.
News Stories - 19 November 2009
Climate Change – Copenhagen and Beyond
Australia is advocating for an ambitious outcome from Copenhagen that engages all major emitters and will limit temperature increases to 2ºC.
Australia is committed to delivering a legally binding treaty on climate change as a key outcome of the ongoing UN negotiations. The Copenhagen conference in December provides a historic opportunity to build consensus on key elements of the treaty. Prime Minister Rudd and Climate Change Minister Wong will be attending the conference.
Prime Minister Rudd is working closely with Danish Prime Minister Rasmussen, Mexican President Calderón and UN Secretary-General Ban Ki-Moon through the “Copenhagen Commitment Circle” to build agreement between Leaders ahead of the Copenhagen conference.
Australia needs strong and urgent action to reduce emissions so it can stabilise greenhouse gas concentrations at 450 parts per million or lower; and limit average global temperature increases to 2ºC.
The post-Kyoto climate change outcome must include credible mitigation actions from all major emitters, including the more advanced developing countries; and substantial financial commitments by developed countries to assist the most vulnerable to adapt to the impacts of unavoidable climate change.
Australia has proposed a “national schedules” approach as a means of bridging the divide between developed and developing countries, by recording the emissions reduction commitments of developed countries; and making it possible for developing countries to record their domestic efforts in an international context.
Australia is sensitive to the need to meet development priorities while taking climate change action.
Least developed countries, particularly small island states, have contributed little to climate change but are vulnerable to its effects and have limited capacity to respond. Australia is investing $A150 million over three years to meet high priority climate change adaptation needs in vulnerable countries in our region.
The Trans-Pacific Partnership (TPP) – Moving Forward
The Australian Government welcomes the US decision to participate in TPP negotiations. The TPP will be a high-quality, 21st Century agreement that could provide a building block to an FTAAP.
The Australian Government welcomes the announcement by President Obama and USTR Kirk on 14 November that the US would participate in the Trans-Pacific Partnership Agreement (TPP). It is a significant statement of the US’ intent to engage with the Asia Pacific region, and this means the TPP negotiations, involving Australia, Brunei, Chile, New Zealand, Peru, Singapore, the US and Vietnam, can go forward.
The first negotiating round will be held on 15-19 March 2010. Australia has agreed to host the round in Melbourne.
The TPP will be a modern 21st Century Agreement that looks for new approaches to emerging issues and growing areas of international trade, including services, e-commerce and green technology; as well as to the ongoing needs of business, particularly behind the border regulatory barriers.
Australia sees the TPP as an important strategic opportunity to strengthen and broaden economic integration and liberalisation in the region. The TPP is intended to expand to include other countries willing to sign up to the same principles and standards and could provide a building block towards the APEC goal of a Free Trade Area of the Asia Pacific (FTAAP).
News Stories - 13 November 2009
Australia’s policy position on Sri Lanka
Australia welcomes the end of the conflict and accords a high priority to supporting the resettlement and reconstruction programs being led by the Sri Lankan Government and calls on the Sri Lankan Government to promote political reconciliation and reform.
With the end of the conflict, Sri Lanka has entered a challenging phase of resettlement, reconstruction and rehabilitating communities. Australia has welcomed the Sri Lankan Government’s commitment to resettle over 80 per cent of IDPs by the end of 2009.
The task facing Sri Lanka is immense with approximately 150,000 internally displaced persons (IDPs) remaining in government camps in northern Sri Lanka. The start of the monsoon season has increased the urgency for voluntary resettlement and providing freedom of movement to IDPs.
Australia is pleased with the recent progress made by the Sri Lankan Government in transporting approximately 100,000 IDPs out of camps in recent weeks. Australia has consistently called upon the Sri Lankan Government to ensure the resettlement process is voluntary and that full information and access is afforded to international humanitarian agencies.
Australia’s response to the humanitarian and resettlement challenges facing Sri Lanka includes through its aid and development program. Australia has already helped to resettle IDPs in northwest Sri Lanka by funding the construction of housing and providing support for basic services and livelihoods.
This financial year, 2009-10, Australia will provide more than $35 million in development assistance to Sri Lanka, including $5 million already disbursed to support the resettlement of IDPs and a further $13 million for the demining of former conflict areas and other resettlement-related activities.
Australia continues to call on the Sri Lankan Government to make sure the critical needs of the civilians in camps are met; to ensure the freedom of movement for these civilians as soon as possible; to resettle all civilians as soon as possible; and to engage in a process of political reconciliation and reform, to ensure it wins the peace.
The Sri Lankan Government must seize the opportunity to promote the political freedom that will enable all citizens to have a stake in Sri Lanka’s future.
The Prime Minister’s India Visit (12 November 2009)
Australia has placed India in the front rank of its international partnerships.
Mr Rudd and Indian Prime Minister Singh announced the establishment of a Strategic Partnership between the two countries. The Strategic Partnership will deepen bilateral, regional, and international cooperation between Australia and India on a wide range of topics and it gives expression to the expansion and dynamism of bilateral ties between Australia and India.
It is the culmination of unprecedented high-level engagement over the past two years. There have been ten Australian ministerial visits to India since early 2008, matched by ten Indian ministers who have visited Australia in that time. The two Prime Ministers affirmed their desire to remain in contact with each other. Dr Singh said he looked forward to visiting Australia at a mutually convenient date.
The Prime Minister unveiled a major increase in the diplomatic resources Australia devotes to the India relationship, including new positions in Delhi, and new DFAT posts in Mumbai and Chennai.
Under the framework of the agreement to establish a Strategic Partnership, India and Australia issued a Joint Declaration on Security Cooperation which will see the two countries intensify their efforts to maintain peace, stability and prosperity and put in place mechanisms to ensure closer and more regular collaboration in security areas.
The bilateral economic relationship continues to expand rapidly to mutual benefit and there is significant untapped potential for even stronger trade and investment links.
Both leaders stressed the determination of Australia and India to work together to address the twin challenges of energy security and climate change and to work together to achieve a comprehensive, fair and effective outcome at Copenhagen, with the involvement of all countries in line with their common but differentiated responsibilities and respective capabilities.
Australia and India signed a Memorandum of Understanding in the Field of Water Resource Management. Mr Rudd also announced Australia would devote a $20 million in funding over five years for joint research in dry-land agriculture in India.
Australia will increase its commitment to the Australia-India Strategic Research Fund to $10 million per year over five years, which will be matched by India, resulting in a $100 million collaboration project on science and technology over the coming five years.
APEC Leaders and Ministerial Meeting in Singapore
Meetings of Ministers and Leaders representing Asia-Pacific Economic Cooperation (APEC) economies in Singapore on 11-15 November 2009 represent a valuable opportunity to set APEC’s direction for the next two years and ensure APEC supports G20 commitments in the Asia-Pacific region.
APEC is the pre-eminent economic forum in the Asia Pacific, a driving force for open trade and investment, sustainable economic development and prosperity in the Asia Pacific region. APEC economies together account for 54 per cent of global GDP, 40 per cent of the world’s population and 68 per cent of Australia’s trade.
In the wake of the global financial crisis, APEC’s agendas of regional economic integration, structural reform and capacity building have assumed even greater importance. In the transition from crisis to recovery, global economic challenges are shifting from the short- to the medium-term.
APEC can add value to the implementation of G20 commitments through its practical, business-oriented approach to trade and economic development. It is important for APEC to forge links with the G20 to maintain its relevance and credibility in regional architecture.
The meetings in Singapore are an important opportunity to boost political will for a successful conclusion to the Doha Round negotiations before the WTO Ministerial Conference in Geneva at the end of November. Making real progress on Doha is the best way the world can respond to flagging economic growth.
But it is not only by reducing tariffs at the border that APEC can make a difference. The G20 has identified structural reform as a critical ingredient for increasing and rebalancing world growth. Australia has been vocal in APEC on the importance of structural reform “behind the border” as a way to boost growth and productivity and to insulate the region from external economic shocks.
On regional economic integration, Australia has led the development of new multi-year Action Plans in APEC to enhance trade in cross-border services and tackle logistical impediments to trade. This work will help fill out APEC’s well-established and successful business facilitation agenda.
Australia is also keen to see the meeting consider aid-for-trade initiatives to build capacity among developing economies to participate in the multilateral trading system.
Fifth Regional Interfaith Dialogue held in Perth from 28-30 October
With its focus on future faith leaders, the Fifth Regional Interfaith Dialogue was successful in assisting future leaders to create a network linking regional communities and to develop practical interfaith initiatives.
The Dialogue was successful in fostering mutual respect and understanding among the diverse faith groups of the region. It underlined Australia’s long history of commitment to deepening people-to-people links in the Asia-Pacific, including among key regional community leaders.
Furthermore, it provided an important platform for mainstream voices to be heard and their messages of tolerance reinforced and served as a useful means of countering the spread of extremism and terrorism by providing delegates with new tools and ideas to counter extremist views.
The Dialogue provided an excellent opportunity for future faith leaders to develop networks for ongoing interfaith dialogue in the region. This was the first time the Dialogue had focussed on future faith leaders and this focus was strongly supported.
The Perth Declaration produced by delegates contained 14 recommendations for action and was well received. The key recommendations included the establishment of an interfaith social network facility with an online forum, which integrates existing networks to promote interfaith understanding; and support for the development of resources for teaching youth about other faiths and the dissemination of best practice educational interfaith resources.
In addition, they included a call for government and community support for faith leaders to be trained in mediation for peace building and conflict prevention and resolution; and a call to faith communities to seek media training and for media outlets to train reporters in religious issues.