There has been a recent easing of FIRB policy particularly for companies less than $219 million. The following is a transcript of an interview with the current Horses Mouth courtesy of the ABC's "The World Today" programme, link below...
Sue Lannin reported this story on Tuesday, August 4, 2009 12:30:00
ELEANOR HALL: Back home now and as the controversy over Chinese investment in Australia continues, the Federal Government has eased Australia's foreign investment rules.
Treasurer Wayne Swan says that investments from private companies of less than $219 million won't have to be approved by the Foreign Investment Review Board.
But investments from foreign governments or state owned firms will still need to be given the green light by the FIRB.
Finance reporter Sue Lannin.
SUE LANNIN: The arrest of Rio Tinto executive Stern Hu and his colleagues, and the failed deal between Rio Tinto and Chinalco, made Chinese investment in Australia a hot political issue.
Now Treasurer Wayne Swan, says foreign investment rules will be fast-tracked and smaller private investments will no longer need approval.
Mr Swan told a business conference that the move means about 20 per cent of applications won't need to be screened. He said the door is open to foreign investors.
WAYNE SWAN: The dominating factor in our decision about these changes is to make the country more attractive for capital investment in what is going to be a more capital constrained world and to send a very clear message how much we value foreign investment because it is the case that even though we apply national interest guidelines, most applications in Australia go through very quickly.
SUE LANNIN: The Treasurer says the changes were not influenced by the controversy over Chinese investment in Australia. Investments by foreign governments and state owned firms will still need to gain approval.
WAYNE SWAN: We've had a lot of Chinese investment in this country in recent times - I think 34 billion since the Government came to power. There's never been a threshold for foreign government of state-owned enterprise investment so nothing changes there for anyone. It's not related to any particular country, the rules are the same for everybody.
We welcome Chinese investment in this country and both myself and the Trade Minister have had a long and constructive dialogue with the Chinese authorities about investment issues.
SUE LANNIN: And the Treasurer dismissed any notion that the arrest of Stern Hu had anything to do with the changes.
WAYNE SWAN: I don't see the Stern Hu case as being related to this at all and I certainly don't accept your characterisation of the Stern Hu case at all. We've had a very good dialogue and discussion with the Chinese about issues relating to our guidelines which apply to state owned enterprises. They apply to all state-owned enterprises wherever the... to state-owned enterprises throughout the world. We don't discriminate against Chinese investment, but what we've done is make some important changes when it comes to private business investment.
SUE LANNIN: The speech was well attended by market economists.
But Mr Swan said he won't be updating the government's economic forecasts. Although he says the signs are a little more positive for the Australian economy.
And he was reluctant to concede to concerns, including from the Reserve Bank Governor, about a housing bubble.
WAYNE SWAN: I do believe that there is room for, because of the spare capacity in the economy, for further supply to be brought on.
I think it's a strength of this economy in recent times that our housing market has been in much better shape than other housing markets around the world because the flow on effects of that in terms of confidence and so on in other countries have been dramatic.
But yes, we do not to keep an eye, as the Governor indicated, on all elements of the market but at the moment I'm not going to buy into this little debate that some people may want to have.
ELEANOR HALL: That's the Treasurer Wayne Swan, ending that report by Sue Lannin.
cheers billdah
FAR Price at posting:
13.0¢ Sentiment: Hold Disclosure: Held
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