PRIME MINISTER: Good morning, everyone.
Australia has become a prosperous country over a very long period of time because we are an outward looking, open, trading economy. This has been one of the key planks of our success as a country and that will always be the case. At the National Press Club a little while ago I set that out, that coming out of the COVID crisis, going through the COVID crisis, Australia will always be an outward-looking, open, trading economy because that’s where our prosperity is and that’s where the jobs are. Yesterday I had the opportunity to have a leaders summit with Prime Minister Modi and we committed again to working together on these principles. Our future is not just here within our borders but well beyond it as well, as has always been the case. That is why Australians enjoy the prosperity they do today and we need to protect that. But investment in Australia must be on our terms, on our rules and in our interests. That has always been the strong position of our Government. And today the Treasurer is announcing a series of further reforms, important reforms, that ensures that foreign investment will always be done on our terms, on our rules and in our national interest. It is not the first time that our Government has acted in these respects.
Now, under our foreign investment rules, significant authority is placed in the Treasurer to make the ultimate decisions when it comes to foreign investment in Australia. That was a responsibility I carried when I was Treasurer previously. And at that time we introduced changes to our foreign investment rules that established new registers for agricultural land ownership, FIRB screening of direct business in agribusiness, lowering of thresholds and importantly one of the first things I did back then was the appointment of David Irvine as chair of the Foreign Investment Review Board. Because our world has been changing for some time and so has been the nature of foreign investment. Many years ago, Treasurers merely had to deal with what were effectively commercial transactions, ensuring we were protecting against anti-competitive behaviour and competition was strong in Australia and they were predominantly the issues that foreign investment questions were determined over. But in more recent times, there have been other elements of foreign investment that we need to be very careful about and we need to have strong rules to protect Australia against. Investments in critical infrastructure and sensitive businesses and data centres and things of that nature. We need to ensure that the appropriate protections are in place. And so, with the appointment of David Irvine some years ago, that was sending a very clear signal that the interests that needed to be assessed for Australia were not just those that related to commercial issues but broader strategic issues and national security issues. We have been following that path ever since.
So today, the Treasurer has fashioned, I think, a series of very important reforms, strongly endorsed, of course, as they are required to by our Cabinet, the Federal Cabinet, and those rules deal with one of the key challenges that I believe the Treasurer always has in these circumstances and that is to ensure that when the conditions change, when business activities change, when markets change, when technology changes, then our foreign investment system needs to have the flexibility and the authorities to protect Australia’s interests in those circumstances. And the rules that have been fashioned by the Treasurer, I think, very much go to that core issue. But at the same time, it’s important that we understand the very serious role that foreign investment plays in Australia and that the streamlining of those processes, for the vast majority of applications that present absolutely no risk to Australia at all, can continue to flow in a very efficient way.
Australia has the most Liberal set of rules in our part of the world. People can invest in Australia in the way that Australians cannot invest in our part of the world and that is a function of our outward-looking nature of our economy and under our understanding of how we can drive prosperity in this country and that is to our credit. But so it’s important that as we continue to attract the investment on our rules, on our terms and in our interests, that that can be done in a way that is streamlined and it is efficient and the Treasurer has fashioned reforms to that end as well. And also there must be compliance with those rules and so where you have rules they have to be backed up and that’s why there is additional resources, more than $50 million today, which is going to resource our agencies to ensure we can enforce and ensure compliance with those foreign investment rules.
I commend the Treasurer for what he’s brought forward through this process, which has been worked on now for some period of time. These rules have come not just through the National – through our Federal Cabinet, I should say, but also through the National Security Committee and the Expenditure Review Committee so we are ensuring that we are getting the right balance between our security interests and our economic interests and with that I will pass on to the Treasurer who can announce the specifics of the reforms.
THE HON. JOSH FRYDENBERG MP, TREASURER: Thank you, Prime Minister. Foreign investment has and will continue to be absolutely critical to Australia’s economic prosperity. One in 10 Australian jobs are created by foreign investment. Foreign investment brings skills and expertise to our country and foreign investment has benefited every sector of the Australian economy, from mining to agribusiness, financial services to tourism. Of the nearly $4 trillion of foreign investment in our country, more than 20 per cent comes from the United States. More than 10 per cent from each of the United Kingdom and Japan and a little over 5 per cent from China. Our foreign investment regulatory framework has always sought to strike a balance between, on the one hand, welcoming and inviting foreign investment to this country but on the other ensuring that those foreign investment proposals that succeed are in our national interest. But technology has been evolving and our geopolitical climate has become more complex. In fact, the world over, governments are seeing foreign investment being used for strategic objectives, not purely commercial ones, and many other nations, including many other like minded nations, including the United States, United Kingdom, Japan, New Zealand and many others, have made reforms to their foreign investment framework.
As the Prime Minister said, today’s reforms build on reforms that he and previous Treasurers have made. Today’s reforms to our foreign investment framework are the most significant since the establishment of the act in 1975 and these reforms are supported by the head of the Foreign Investment Review Board, David Irvine, a former security agency head but also a very distinguished diplomat. And as the Prime Minister said, these reforms have been worked on for some time and the product of considerable consultation within Government and beyond.
The reforms fall into three key areas. The first is that we are creating a new national security test. Foreign investors, not just foreign government investors, should be subject, and will be subject, to the Foreign Investment Review Board review when they are investing in what is termed a ‘sensitive national security business’. Now, the exact businesses to be covered by that term will be the subject of consultation but it is expected to include businesses in the telecommunications sector, businesses that are covered by the Security of Critical Infrastructure Act, including energy and sensitive utilities businesses. Businesses within the defence supply chain and businesses that collect, store and own data that is critical to Australia’s national security and defence. The Treasurer will also have a new power where he can call – he or she can call in an investment if it creates a national security risk and if that business is not covered by that definition I talked about earlier. The Treasurer will also have a last-resort power to vary or to impose conditions or as a last resort to force a divestment in a very limited number of exceptional cases. For example, where there is a material misstatement by the applicant at the time of their application for foreign investment approval or where the activities of the acquired business change substantially and create national security risks.
The second significant reform is around strengthening our compliance and integrity framework, strengthening our penalties and our enforcement regime. Over 80 per cent of foreign investment by value last year had conditions attached. The Foreign Investment Review Board has currently more than 1,000 conditional approvals on their books. We need to have the requisite penalties to ensure compliance and we also need to have the resources in place to monitor and ensure compliance.
The third set of reforms, bearing in mind that we are competing internationally for capital, is that we are streamlining the approval process for passive investments by foreign governments where they are partnering with private capital. There are trillions of dollars being invested by such funds where foreign governments, through their entities, are partnering with private capital and where those investments are in non-sensitive sectors, we want to streamline and speed up that process. The government will be releasing, next month, exposure draft legislation and the intention is to have that legislation passed before the end of the year and put in place from the 1 January next year. As you know, during the COVID crisis, we established a zero threshold, zero dollar threshold, for foreign investment. That was to protect the national interest. But that was always to be temporary. So the idea is to stream, to seamlessly move to this new regime from the 1 January next year.
Finally, these reforms today, to the National security test, to streamline passive foreign government investments in nonsensitive sectors and a boost to our integrity systems by increased resources and penalties for around compliance, will ensure that Australia foreign investment framework continues to advance the national interest.
Prime Minister.
PRIME MINISTER: Thank you, we’ll go to questions. Welcome back Jono, there is one new rule around the Press Gallery, not just social distancing, but everyone’s got to keep off the grass, okay? People have got to keep off the grass. We’re safe here in the courtyard. To our friend out there in Googong, we wish him all the best. Who would like to kick off?
JOURNALIST: Prime Minister,
PRIME MINISTER: Yes?
JOURNALIST: …and Treasurer, Why is now the right time to be doing this when there is so much other stuff going on and also the temporary measures you put in place already, as you said, have a $0 threshold? And if you are pouring $54 million into this new regime, then why can’t childcare remain free for another three months for parents who need to work?
PRIME MINISTER: A lot of questions in there Lanai. First of all, this is a reform process that has been ongoing for some time, there is further consultation that needs to be undertaken around the draft legislation and that will be important to get this right, because we want to continue to be positive towards foreign investment, but, as I said, on our terms, on our rules, and in our interests. And we will work through that process of the balance of the six months, which will see that legislation, as the Treasurer says, come into effect on the 1 January of next year. Now gives us the time to move to the next stage and work over the next six months to ensure that we can have that regime in place as we enter into the New Year. This second point I would make is about the enforcement resources. This has been a much-needed area for compliance. I mean, I was aware of this when I was also Treasurer. If you have rules, you have got to have the compliance resources that sit behind those and so this stands in its own merits when it comes to the ongoing investment of resources into compliance around foreign investment, which I have no doubt Australians would strongly support.
Now, on the issues around childcare, that is a matter that is being considered, the current arrangements remain in place for now. I think we will be in a position in the not too distant future to be making further announcements about that and that will also be made on its merits and an assessment of where the situation is at this time. I do know that the childcare facilities and parents themselves are keen to move back towards a more normal arrangement, which would enable greater capacity, with more people going back to work there are rising levels of demand, which was the issue sometime ago, and the guarantees were put in place through both JobKeeper and the direct support provided to childcare facilities, I think has been very important. But it was never a permanent measure, it was a measure designed for the times and, like all of our measures, we constantly keep looking at them and applying them to the circumstances as we know them. But Josh, did you want to add anything to that?
TREASURER: Well Lanai, these are not either or propositions. Childcare and protecting our national security. Governments do both. And these are the most significant reforms in nearly 50 years and we’re hopeful of getting bipartisan support for them. Later today, myself and David Irvine will brief the state treasurers. I’ve already had a conversation with my Labor counterpart. These reforms are in the national interest. These reforms are designed to give Australians control over the investment that comes into this country and we continue to provide, as the Prime Minister said, the necessary support for all other social services.
PRIME MINISTER: Mark?
JOURNALIST: A question on the review of those allowances, will JobKeeper be reduced for those people who are still earning more under that allowance than they would ordinarily under their usual rate?
PRIME MINISTER: I will just repeat what the Finance Minister said this morning and that is, when we first established JobKeeper, I would stress we established it for six months, and that is the timeframe of which it is being delivered, and that was twice the length that countries with similar programs were putting in place around the world, whether in New Zealand or Canada or the United Kingdom or other places, we knew that this would hit hard and it would hit long. And so we took the early step to put in place a program twice as long as those in other comparable jurisdictions, we set it up with a review to be undertaken in those first three months and that is what is happening and I don’t plan to prejudice that review. We will take that advice as we prepare the statement which the Treasurer will hand down in July and that will take into account that review. But the six months provision of JobKeeper has been set out in legislation and people can count on that.
Jono?
JOURNALIST: You can guarantee that? That will be there until the end of September?
PRIME MINISTER: Yes.
JOURNALIST: Before announcing it today, did you speak to any of Australia’s major investing countries to notify them of these intended changes, and if you did, which countries did you speak to and what was their response? And Treasurer, if I may, while I have you, to what extent or to any extent are these changes designed to address requirements from the US for Australia to maintain accepted foreign state investor status to try to stop any backdoor investment in the US via Australia?
PRIME MINISTER: Josh do you want to go first?
TREASURER: Yes, thank you Prime Minister. These measures have been decided and designed by the Australian Government. Not by anyone else. We have taken these steps today to enhance and to protect the national interest. With respect to consultation with other countries, we have, through diplomatic channels, informed some of our key partners about these changes, explained the context for them, as you would expect us to do.
JOURNALIST: Which, which partners?
TREASURER: I’m not going to go into which countries, but, of course, we have vital trading relationships, we have vital investment partnerships and we thought, given the significance of these reforms, it was only prudent to have that, to provide that heads up to them.
PRIME MINISTER: And that’s our normal practice. That’s what we do in relation to all these measures. That is expected and it is appropriate.
Yes?
JOURNALIST: Prime Minister, should people avoid Black Lives Matter protests over the weekend given the advice, well the pleas of State medical officers, and if they do attend those protests, should they face the same social distancing fines that anyone else would?
PRIME MINISTER: Well look, thank you for the question. I have spoken to Premier Andrews and Premier Berejiklian this morning. The police authorities in both states have made decisions, operational decisions on public order grounds. And I understand the decisions that they have taken, it’s not for me to comment on operational decisions of police forces. And they’re the decisions that they have made. But let me be clear, as I believe Premiers have also, that while those public order decisions have been made, that’s not an invitation or a license for this in those broader, I think, social responsibility terms. Our message is very clear, that the health risks of gathering in such large numbers and the risks of people coming into close proximity are real and Australians have worked incredibly hard in recent months and have undergone great sacrifices to protect the health of the most vulnerable and that has included our Indigenous communities. One of our greatest fears at the start of this COVID crisis, for Premiers, myself, our Cabinet at a federal level, has been our concern for the potential impact on Indigenous communities of COVID-19. And not just remote communities, but metropolitan communities as well. And so it is important for people to have their right to protest.
I said at the outset of this crisis that we had to deal with this crisis consistent with our values, and who we were as Australians and those liberties, and that is true, but with those liberties, great responsibility, I think, for individuals. And so for all of those Australians who couldn’t attend the funeral of a family member, or couldn’t see a loved one in a nursing home, or a veteran who couldn’t remember their fallen colleagues by attending a war memorial service on Anzac Day, I think all Australians owe all those other Australians agreed duty of responsibility and I say to them don’t go. Not because you shouldn’t express your view, find another way to express your view. We all found a way on Anzac Day to thank those who gave us our liberty, and not gather in large numbers. And we stood on the end of our driveways, or we held up a light on that dawn in our windows or on our balconies and we found a way to celebrate those who gave us our liberty. Let’s not misuse that liberty. Let’s respect it. Let’s respect other Australians. And let’s say to those who had the absolute agony of not being able to say goodbye to a loved one, let’s thank them by showing responsibility this weekend. The health advice is very clear, that it’s not a good idea to go. And I have asked the AHPPC today to consider this matter and the Chief Medical Officer will be standing up later today and advising you of the AHPPC’s, the medical expert panel’s, advice to Australians about gathering in these numbers, so this isn’t about issues regarding people’s ability to express themselves and engage in protest activity, we all respect that. But let’s respect those other Australians who have gone through such hardship. Let’s respect them. Let’s find a better way and another way to express these sentiments, rather than putting your own health at risk, the health of others at risk, the great gains that we have been able to make as a country in recent months. And let’s not forget the terrible economic consequences of that as well. Let’s not put that at risk. Let’s exercise our liberties responsibly this weekend. I encourage people not to attend for those reasons and those reasons only.
JOURNALIST: On this topic, can I just ask, is it a national shame in Australia that there have been at least 432 Indigenous deaths in custody since the royal commission in 1991 and do you need to do anything more to, given that only two-thirds of the recommendations from that royal commission have been implemented?
PRIME MINISTER: Well of course it is, and that is why the closing the gap initiatives that all states and territories, and the Commonwealth Government, are so focused on delivering and that’s why we’ve gone through the reforms of that process as we have engaged with Indigenous peak groups. I mean in Australia we understand the problems we have, in this area. And I get only cooperation from all levels of government in trying to address these issues. No-one has a mortgage on concern about this issue. I share these concerns, all Australians share these concerns. And so I don’t diminish them for a second. But what I do say is that Australia is not other places. So let’s deal with this as Australians and not appropriate what’s happening in other countries to our country at this time.
Phil?
JOURNALIST: Back on the Budget, can I, and this is against the backdrop of some numbers the PBO’s put out this morning on forecasts on debt and so forth. The $150 billion in various assistance measures. A lot of it is demand driven,
PRIME MINISTER: The what, sorry Phil?
JOURNALIST: The $150 billion in various assistance. A lot of it is demand driven, and given the economy is in better shape now than we thought it was going to be a couple of months ago, is it your belief that not all that money will have to be spent on all those programs, including things like JobKeeper, and is it reasonable to remove businesses from JobKeeper if their turnover has recovered before the six months?
PRIME MINISTER: Well, okay let me make a couple- I really answered the last part of that question when I answered Mark’s question. It is the same question. But in terms of what PBO has released today, and the Treasurer I am sure would like to add to this, I think what the PBO analysis today, which is an estimate based on Reserve Bank forecasts which don’t go over the forward estimates, so, but it is a serious estimate and I think what it highlights is this, $150 billion as you say, in estimated expenditure on direct economic fiscal supports into our economy, that’s true, but that’s not the only hit. The coronavirus has hit not just the expenditure side of the Budget, but it’s got a massive hit on the revenue side. And that is very, very significant and that will be very evident when the Treasurer hands down the statement in July. And so I would stress, that is why more than ever, we have to be careful about the expenditure we are engaged in. It has to be well measured, it has to be well targeted, it has to be time-limited. It can’t provide long lasting, heavy burdens on the fiscal side down the track, baked-in expenditure. We’ve avoided all of that. Which was the lesson of the GFC, don’t bake-in long-term expenditure, because your revenues get hit as well and the revenues will be hit and that’s why we need to be very careful. But the best way to raise revenue is to get people back into jobs and your economy moving forward. And that’s what we’re focused on and that’s what our JobMaker plan is about. It is about getting people back into jobs because if you are in a job you are not, you are not receiving assistance, you are actually paying taxes to provide the resources and guarantee the essentials that Australians rely on.
Josh?
TREASURER: Well thanks Prime Minister, well as a country because of our progress on the health front, we have avoided that worst-case economic scenario. In fact in March, when we announced the three tranches, at these podiums. We thought the economic situation would be a lot worse than it’s turned out to be, although it has been a very, very severe impact on the economy. The restrictions are being lifted earlier than first thought and that’s a good thing and as the Prime Minister said, in accordance with National Cabinet, those three stages of restrictions being eased, we are going to see 850,000 people back in a job and more than $9 billion contributed to the economy every month. The numbers will be updated based on these demand driven programs with the economic statement that the Finance Minister and I will make on the 23rd of July.
JOURNALIST: Prime Minister, on the changes to the foreign investments, was there any particular investment or decision that’s triggered these large-scale changes? And you and your Arts Minister have both said that JobKeeper is a support to the arts sector, what happens in September when those payments end as you’ve said and, but theatres still can’t have you know 3,000, 5,000 people in them, what happens to the sector then?
PRIME MINISTER: Sure, sorry just remind me of the first part of the question?
JOURNALIST: Was there any specific investment…
PRIME MINISTER: No, is the short answer to that question. On the other matter, we are, as people are aware, working on a set of measures and supports in to the entertainment sector. Though I do stress, as many of you have reported today, that the JobKeeper and JobSeeker programs combined are supporting large numbers of people within that sector and I don’t see JobSeeker as second-best, I don’t. I don’t sort of join in the demonising of unemployment assistance. That’s not something I will have any truck with. So I think JobSeeker and JobKeeper are important, they work together to provide support. Now, what happens post-September is something that is being considered as part of the review the Treasurer has put in place for those programs and I’m not going to preempt that. We are in June and we are talking about something post-September and one of the things, I think, I hope we have all learned is that this is a fast-moving situation and there are many uncertainties and you can’t get too far ahead of yourself on some of these decisions because circumstances change. And so we have those measures in place, they were put in place for six months. That has bought us considerable time, far more time than other countries have been able to purchase through the way they have designed their measures and that has given, I think, Australians a lot of confidence, a space to work within during this period of uncertainty. And in the same way, we worked to put those things in place, we are working to look at what our options are beyond that point in time and what is necessary. But it is still very premature to be making those calls.
Josh, did you want to add to that?
TREASURER: I was going to say, as I understand it, and I’m informed that a substantial number of organisations within the arts community are benefiting from the JobKeeper program. Queensland Ballet, the Melbourne Theatre Company, the Sydney Symphony Orchestra, Opera Australia as I am informed, are all benefiting from the JobKeeper program. As the Prime Minister said, the JobKeeper program and the JobSeeker programmes are complementary and we’ve also already announced $27 million of measures for the arts community, including $10 million for support act, money for Indigenous arts organisations and money for regional arts organisations.
JOURNALIST: Prime Minister on today’s announcement, I’ve got one for each of you if you don’t mind, Prime Minister are you concerned that this will create further tension with China? And Treasurer, as a last resort power, will you resume ownership of the Port of Darwin?
PRIME MINISTER: I might address both, actually, as I was the Treasurer at the time. First of all no, I don’t believe why it should. I mean, countries make decisions on their own interests for their own rules and we respect the rules and interests of other countries and so I see no reason why that should be the case. Australia will always design its foreign investment rules on that basis as other countries do theirs. So I don’t think there is anything extraordinary about that and so that is what I would offer on that. I think there is a lot of misunderstanding about the Darwin Port case. That issue was dealt with back in March of 2016. The Darwin Port was not sold with the approval or authority of the Commonwealth Government. It was not. At that time, sales of assets by Territory governments, state governments, did not require and did not call in the authority of the Foreign Investment Review Board or the Treasurer. As a result of that, I engaged with all the states and territories and had the rules changed and that came into effect in March of 2016. And that then required such investments or sales, I should say, by those entities to both private and state-owned entities to come before the Foreign Investment Review Board. So that is what happened with Darwin Port. It was not sold with the authority of the Federal Government. It was sold solely on the basis of the decision of the Northern Territory Government and the wisdom of that decision or otherwise can only be explained by the Northern Territory Government at that time, which was obviously different to the government we have today. So that’s how that issue played out. The, I think the weaknesses in the system that that sale identified were addressed and it was addressed by our Government, it was addressed by me as Treasurer. What we’ve announced today only provides further supports to deal with those issues but obviously the Commonwealth Government is sovereign on other matters and if there are any other issues that presented in relation to any asset that compromised Australia’s national interests, there are broader actions the Government can take which are common to all governments around the world.
Yep?
JOURNALIST: Can I just ask you on China, we’ve seen the global coalition of 19 MPs from 8 different countries calling on their governments to take a tougher stance against China. Andrew Hastie and Kimberly Kitching are part of that. Is that going to be helpful for your Government, given the situation we are facing with the China relationship?
PRIME MINISTER: It’s a free country, a free Parliament, and we have got members of Parliament from both sides of politics expressing their views. That’s what Australia is all about, that’s who we are, that’s what we do. I think that’s something we celebrate. We have a comprehensive strategic partnership with the People’s Republic of China and it has many facets to it and we will continue to pursue that relationship through the many channels that are set up under that partnership.
We’ve got time for one more because it’s a bit chilly out here.
JOURNALIST: Just on the trans-Tasman issue. Is it an embarrassment or a failure for Australia if you can get to Queenstown before you can get to Queensland?
PRIME MINISTER: Well, as you know, I’m very keen to see Australia’s economy continue to reopen and the timetable for interstate travel set up by the three step process was for that to be able to be possible in July. And that’s important also for school holidays. And for people in New South Wales and Victoria, and I’ve got to say on a day like today, the ACT, I’m sure they’d like to see a bit of Queensland sunshine in July with their kids, a bit of West Australian sunshine too, I suspect Lanai. But as a result of that timetable, I would hope that states would make decisions consistent with that National Cabinet timetable. You also know that I’m very much in favour of a safe travel zone between New Zealand and Australia and one of the reasons whether it’s for that or whether it’s with any of the other states is, yes, the tourism industry I think very much depends on that, in getting people back into work, no doubt about that. But the aviation industry also critically depends on that. And the Treasurer and I, and the Deputy Prime Minister have been working with the administrators on Virgin. Their jobs depend on planes being able to fly again so if I can get more planes flying between Australia and New Zealand, if I can get more planes flying between Sydney and Brisbane and Cairns, if I can get more planes flying between Melbourne and Perth and Adelaide and Darwin, then jobs in the aviation sector have got a much brighter future. And so I would continue to encourage decisions that are consistent with creating jobs and making jobs and I think the decision to open up interstate travel is obviously consistent with that. The timetable for that was set out under the 3-step process to occur in July and I would hope that that would be met.
OK, thanks very much, everyone, ta.
