It’s pointless to get angry
SHOULD we be outraged if a foreigner sells an Australian property to another foreigner? Well, we have in the past and more than likely are about to be again very soon.
And again it will show the almost schizophrenic way governments deal with land sales to foreigners.
The Consolidated Pastoral Company hit the market last week, sending a surge of excitement though the rural investment sector. This is as big as they come. CPC was founded by the late media mogul Kerry Packer in the 1980s before being sold by his son, James, in 2009, to UK company Terra Firma.
It comprises 16 cattle stations across Western Australia, the Northern Territory and got tangled up in a stop-start process by a very nervous federal government that did not want an iconic Australian company falling into foreign hands, even if most of the sale comprised leases, so the land would still be “owned” by the government.
Kidman eventually sold to West Australian mining magnate Gina Rinehart, who bought it in a majority partnership with Chinese Company Shanghai CRED Real Estate Stock Co.
The hefty price of CPC puts it well beyond the means of most local investors (Terra Firma bought it for a reported $425 million in 2009), so we face the prospect of a foreign buyer taking control of a large chunk of Australian farmland.
Or rather, another foreign
owner because Terra Firma is a foreign company. Even if some consider “foreign” to be code for Chinese.
The CPC sale is the first real test of the federal government’s new foreign ownership rules, which require farmland worth more than $15 million to be advertised widely for at least 30 days to domestic buyers before a foreign investor can purchase it.
That has caused some unease in the big end of town, which usually likes to keep transactions out of the spotlight, selling large farms with little or no fanfare.
Plus, any land sale over $15 million is also subject to Foreign Investment Review Board approval.
The CPC sale is an interesting test because a foreign-to-foreign sale should really make no difference. It is not falling out of local hands.
We saw the same issue with the $280 million sale of Tasmania’s Van Diemen’s Land Company, Australia’s largest and oldest dairy farm, to Chinese company Moon Lake Investments in 2016.
Yet federal Treasurer Scott Morrison went to great lengths to say the sale was approved on the condition Moon Lake complied with Australian taxation law. I would have thought that was a given for any property sale, no matter the size or buyer.
What was forgotten in that sale was the vendor, New Plymouth District Council, was from New Zealand.
Last time I looked, New Zealand was not part of Australia.
Australian agriculture is crying out for investment to build its potential to cash in on the tsunami of Asian demand for food and fibre.
Foreign companies, such as Terra Firma, have shown they are willing to invest and improve the farms they buy here.
Sure, put the appropriate checks and balances to make sure the buyers of our biggest properties are in it for the right reasons.
But for a country built entirely on foreign investment, it’s a bit rich to pick winners and losers based on where the buyers come from and how they look.