Queensland LNP Senator Matthew Canavan has welcomed yesterday’s announcement that the Government has rejected the sale of S. Kidman & Co as the right one, but he also warned that it highlighted the urgent need to close a major loophole in Australia’s foreign investment arrangements as soon as possible.

“The only reason the Kidman deal was scrutinised was because it was such a big deal it triggered the $252 million screening threshold for foreign investments.”

“Usually Australian agricultural properties do not sell for anything like this amount, even very large ones. So they are not subject to scrutiny.”

“Individual properties in the Woomera Prohibited Area in South Australia would not come close to reaching the $252 million threshold. So even though this is a sensitive area on national security grounds it would not trigger the automatic FIRB requirement unless the sale was part of a much larger deal, like the Kidman one.”

Senator Canavan said that the Foreign Acquisitions and Takeovers Legislation Amendment Bill due to come before the Senate next week, in the final sitting period of the year, would fix this loophole.

“Next week legislation will be debated in the Senate to bring down the $252 million threshold to a more realistic $15 million.”

“It is vital that this change be passed so we can close this loophole as soon as possible. In light of the issues raised by Kidman, the Labor party should review its decision to oppose this sensible change, and support the Government in making this change to protect Australia’s national interests.”

Senator Canavan said that in the past year Labor’s Senate leader Penny Wong has rejected widespread community concerns on this issue, and urged a $1 billion threshold for any FIRB scrutiny on foreign investment proposals for Australian agricultural land.

“After realising this made no sense Labor has put forward a new proposal for a $50 million threshold. But this is still far too high given Australian agricultural land values.”

The Foreign Acquisitions and Takeovers Legislation Amendment Bill fulfils the Coalition’s September 2013 federal election commitments to strengthen the rules around foreign investment. It lowers the monetary threshold for screening of foreign investment proposals related to agricultural land and agribusinesses from $252 million down to $15 million and $55 million respectively. The lower $15 million threshold applies to the cumulative value of agricultural land owned by the foreign investor, including the proposed purchase.