Victorian agricultural industry bodies say it’s unlikely the tightening of foreign investment rules will have an impact on the sale of the Port of Melbourne (PoM) lease.
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Foreign governments wanting to buy state infrastructure are automatically scrutinised by Australia's Foreign Investment Review Board (FIRB) whilst private foreign companies are exempt.
But Treasurer Scott Morrison has confirmed the government plans to dump the exemption for foreign companies wanting a stake in state-owned "critical infrastructure" in the near future.
“The Australian government is working with the states and territories to ensure that future sales of critical infrastructure by state and territory governments, to privately-owned investors ,can be formally reviewed by the Foreign Investment Review Board," Mr Morrison's spokesman told Fairfax Media."This will require an amendment to the Foreign Acquisitions and Takeovers Regulation 2015. The government is working to have this in place in the near future."
Victorian Farmers Federation (VFF) grains group president Brett Hosking said he had always felt the highest bid might not necessarily be the best one for Victoria.
“I think most Australians would say it’s good to have a reasonable level of oversight, particularly for essential assets, like ports and airports,” Mr Hosking said. “It leaves us very stranded, if it is passed into the wrong hands.”
He said the first hurdle was getting the lease sale bill through the Victorian parliament. “Get the appropriate conditions around the sale and then go to the market and see what interest there is in it, as an asset,” he said.
With more than 85 per cent of Australia’s total dairy exports sent via the PoM, the dairy industry is the fifth largest user of the Port.
United Dairyfarmers of Victoria (UDV) president Adam Jenkins said his group would be keeping a “watching brief” on the lease sale.
“We need to make sure it is an open market, in that respect.
“From our point of view (the government) has to limit vertical integration and make sure the port is as efficient and competitive, as it is now,” Mr Jenkins said.
“It’s still going to be a private monopoly, that’s where our major concern, as agricultural exporters, lies.”
Mr Morrison has already written to Victorian Treasurer Tim Pallas informing him he plans to strengthen the foreign investment scrutiny for all state infrastructure that is regarded as "critical".
At a meeting of state treasurers in December last year, Victoria also agreed to "ensure national interest considerations are taken into account" in the sale of critical infrastructure to foreign investors.
