From time to time I get a little bit confused about the Labor Party's position on this issue.
Today they have apparently taken the position that any more scrutiny on foreign investment and agriculture is a bad thing, but only a couple of years ago their alternative Prime Minister, their leader Kevin Rudd, the person they put up to be in charge of this country, was asked at the Asia Society Policy Institute about investment in Australian rural land, and this is what he said: 'I am a bit nervous, a bit anxious, frankly, about simply an open-slather approach on this. I think when it is about rural land and land more generally, we need to adopt a more cautious approach. We should not have open slather.' It was just two years ago that the leader of the Labor Party said he wanted a more cautions approach to foreign investment in land. But now we have a completely different position from the Labor Party on foreign investment in rural land. It is exactly the same approach they took to foreign investment in residential land—completely ad hoc and all over the place.
When they were in government, in 2009, I believe it was under Minister Bowen at the time, but I stand to be corrected, the Labor Party changed the regulations on investment in residential land to allow more open-slather and allow more foreigners to invest in residential housing, particularly existing housing. There was a huge surge in foreign investment in our major cities, particularly Sydney. But within two years they had reversed the approach and gone back to the previous approach, which basically means that foreigners generally cannot invest in residential housing or land in this country—in existing housing, I should say, because they can invest in off-the-plan and in new housing.
The Labor Party has been all over on this issue for a number of years. There was also a massive inconsistency with how we treat investment in residential property and how we treat investment in non-residential property. There are differences between them. But to come into his place and try to argue that more scrutiny and more transparency on investment in agricultural land is somehow going to make the sky fall in—it just does not make sense. We make it such that all foreigners cannot buy an existing home in Sydney or Melbourne. Why is there such inconsistency. Why do we never hear anything from the Labor Party about why foreigners should be able to invest in residential housing in our major cities, but they want to bang on about investment in rural land?
The reality is that a few years ago we increased the thresholds on Foreign Investment Review Board decisions to $250-odd million. It has been going up with inflation every year, but it sits at about $250 million. That means we provide no scrutiny at all to investment in agricultural land, because, of course, there is almost no farm in the country—one farm, perhaps: Cubbie Station—that is worth more than $250 million. It is an anomaly that we are fixing with the changes that are before the Senate at the moment.
Even after the changes we make we will still be one of the most liberal countries in the world for investment in agricultural land, and we should be, because Senator Sinodinos is correct that we do need investment in our agricultural sector. Because of that we will be and will remain one of the most liberal countries in the world in welcoming foreign investment. If you go the US, a bastion of free markets and open competition, there are 11 states in the US where no non-residents can purchase farmland—none at all. In places like Nebraska, Oklahoma, Iowa, Michigan, Missouri and North Dakota—many of them big farming states in the US—they do not allow any non-residents to buy farmland at all. In a few other states only US citizens can buy farmland. In Canada there are different restrictions between different provinces but, again, generally, foreigners are restricted to purchasing less than 40 acres in most farming states in Canada. In New Zealand any parcel of non-urban land of more than five hectares is defined as 'sensitive' and purchase by foreigners must receive approval by the Overseas Investment Office.
Our changes to bring the threshold down from the $250 million-odd level to around $15 million for scrutiny will still make us one of the most liberal countries of the world but will provide for some scrutiny, at least, for investment in our farmland. I believe the Australian people expect us to scrutinise investments in land in this country to make sure that they are in our national interest and to make sure that decisions that we make as a government accord with the principles established in the Foreign Acquisitions and Takeovers Act, which are to make sure those investments are in our national interest.