Myth busted on Chinese farmland ownership

07 Sep, 2016 08:48 AM
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THE volume of Australian agricultural property owned by the Chinese is minuscule compared to the area purchased by United Kingdom investors, however the nation’s overall level of foreign agricultural investment is expanding.

That information and other fresh data is set to be revealed in the first report from the federal government’s new register of foreign agricultural land ownership being released today.

Federal Treasurer Scott Morrison will present the report’s findings to federal parliament next week on the foreign farmland register that’s being administered by the Australian Taxation Office (ATO).

The register was established under legislative changes pushed and introduced by the federal Coalition in the previous parliament to tighten scrutiny of foreign ownership in agriculture and increase public transparency.

Overall, the report said that from June 30 this year 13.6 per cent or 52.1 million hectares of Australia’s total agricultural land of 384.6m/ha was foreign owned.

Of that overall total, 9.4m/ha was record as being under freehold title and 43.4m/ha held as leasehold.

Livestock production represented the highest use of foreign-owned agricultural land by area with 45.8m/ha (88 per cent) followed by cropping at 1.5m/ha (2.8pc).

Chinese foreign ownership has ignited controversial media headlines and public debate in recent times, especially the federal government’s pushback on selling the Kidman & Co cattle empire when assessed against the national interest - but the register’s figures showed a different story.

It said the UK with 27.5m/ha was the leading source country for foreign ownership of Australian farmland, representing a whopping 52.7pc of the total landmass held by overseas interests and 7.2pc of the nation’s total agricultural area.

In comparison, China was positioned fifth on the register’s list of the 10 leading nations, owning 1.5m/ha of Australian farmland or 2.8pc of the foreign-owned total.

China’s farmland volume represents just 0.4pc of the nation’s entire agricultural area.

The USA was second on the top-10 list with 7.7m/ha (14.8pc), followed by the Netherlands holding 2.98m/ha (5.7pc) and Singapore with 1.9m/ha (3.6pc).

China headed the Philippines (1.1m/ha); Switzerland (1.1m/ha); Jersey (0.9m/ha); Indonesia (0.8m/ha); and Japan (0.7m/ha).

Queensland topped the list of States with 17.7m/ha of foreign-owned agricultural land followed by the NT with 15.2m/ha, WA on 8.8m/ha, SA having 7.2m/ha, NSW/ACT with 2.4m/ha, Victoria on 607,000ha and Tasmania at 342,000ha.

However, Tasmania’s 342,000ha represented 21.8pc of that State’s total agricultural area of 1.57m/ha.

The NT’s 15.2m/ha of foreign-owned agricultural land represented 30pc of its total agricultural landmass of 50.3m/ha; Queensland’s 17.7m/ha was 13pc of its 135.9m/ha, SA’s 7.2m/ha was 15.6pc of its 45.8m/ha; WA’s 8.8m/ha was 10.9pc of its 81.3m/ha; Victoria’s 607,000ha was 5.1pc of its 12m/ha; and the NSW/ACT’s 2.4m/ha was 4.1pc of its 75.4m/ha.

Acting Prime Minister and Agriculture and Water resources Minister Barnaby Joyce said the report was the first comprehensive data on the actual level of foreign ownership of agricultural land in Australia and provided the basic transparency necessary to ensure oversight and confidence in agricultural investment.

Mr Joyce said the common perception that the level of foreign ownership had been increasing “seems confirmed” by the report’s findings.

He said previous estimates by ABS surveys found that at June 2013, 12.4pc or 49.6m/ha out of 400m/ha of Australian farmland was foreign owned.

“This has also increased on the December 2010 survey estimate of 11.3pc or 44.9m/ha out of 398m/ha being foreign owned,” he said.

“The land register is giving us the first comprehensive baseline picture of foreign ownership of Australian agricultural land.

“From now on the annual reports from the land register will give us more accurate data on which to base public discussion.”

Mr Morrison said foreign investment was integral to Australia’s economy and contributed to growth, productivity and created jobs.

But he said the community must have confidence that this form of investment was in the national interest.

“The Turnbull government understands that trade and foreign investment has always created jobs in Australia for Australians, driven our economic growth and always will,” he said.

“With more than $3 trillion worth of foreign investment in Australia today, we cannot afford to risk our economic future by engaging in protectionism.

“The land register is part of the Turnbull government’s package of measures to strengthen Australia’s foreign investment regime which will better help to protect our national interest.”

In administering the register, the ATO receives information directly from foreign investors and any with an interest in agricultural land are required to register that interest, regardless of the land’s value.

The ATO matches land titles, immigration and other third party data sources to identify foreign investors who may not have recorded their land on the Agricultural Land Register.

A stocktake was conducted between July 1 last year and February this year to enable existing foreign person land holders to register their land.

The Coalition has altered the Foreign Investment Review Board’s (FIRB) rules for examining potential foreign investments by lowering the trigger threshold on land acquisitions to $15 million and to $55m for agribusiness proposals.

New Maranoa LNP MP David Littleproud today said he welcomed a mature discussion on foreign investment - based on fact, not emotions - and supported LNP Senator Barry O’Sullivan’s call to hold a national symposium on the topic.

Mr Littleproud said a national symposium could spearhead a high-level assessment of the current regulatory system and gather feedback from stakeholders interacting with the rules.

“Every stakeholder needs to be involved in this because we need to get a clear picture, based on facts, about what’s going on,” he said.

“Now we need to take the next step and it’s my belief that a productivity test is the key and needs to be explored during a national symposium.

“The government's framework on foreign investment balances foreign investment with the need to reassure the community our national interests are being protected.”

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FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

wtf
7/09/2016 9:51:20 AM

It doesn't matter if its farms/houses/infra/etc, any presence of sovereign gov'ts with their own currency in a market puts an artificial floor/risk in it, as these funds are non accountable (shown by our own gov't). Gov'ts could set up fake proxies in the UK or anywhere, so origin of this capital means very little. As shown by Kidman, properties of such size can rapidly change countries position overnight. If no offshore capital is allowed access to these assets, will they not discover their true price for Australians to invest? resulting in less exchange rate raising capital inflows?
LTF
7/09/2016 12:04:11 PM

PM Turnbull says "we cannot afford to risk our economic future by engaging in protectionism". What a hypocrite. Australia has the most protectionist industrial and environmental regulations of any nation in our region and Turnbull has nothing planned to correct that enormous emasculation on Australian businessmen and investors. These protectionist rules, and unfair tax rates compared with OS Companies, have been a major reason why we have not been able to accumulate the cash flow necessary to maintain ownership of our own farms. China's govt partnership with buyers is also very wrong.
LTF
7/09/2016 12:18:55 PM

wtf is spot on. Allowing any foreigner to buy land & assets in Australia is not free trade or investment. It is ownership by foreign sovereign interests. China refuses such ownership to foreigners. They require locals to retain a majority share/control over foreign investor/partners. Why should we treat them or any other foreigners any differently. One accepted fact is that multinational corporations are able to weigh down their Australian operations with whatever head office fees & charges necessary to avoid tax profits here. Turnbull is now waffling on it but has done nothing.
Kenj
8/09/2016 7:59:56 AM

The issue should not be foreign ownership but that foreign owned firms 1/ pay the same tax as Australian films and are not able to move profits overseas 2/ Purchase products from local markets - this is important as foreign ownership can lead to loss of business for Australian Ag supply firms and increased cost base for those Australian farmers who have no alternative. 3/ Sale of produce - Similarly sale of produce should occur within Australian markets. Direct export of produce by foreign Government owned companies in particular should be stopped.
In a neoliberal world
8/09/2016 8:10:24 AM

Given that Oz household debt is 20% of GDP higher now than at the time of the GFC and we have the highest household debt to household income in the world, we are set for a massive correction. In order to keep an economy growing we need a growing money supply, to do so we either borrow it from abroad or sell assets. Both have the effect of raising our dollar. Therefore for the jobs and growth mantra to continue, our business conditions will worsen. Once this correction starts, what will stop gov'ts who print their own money from buying up Aust? the FIRB register is too late, once they are sold.
Lies, damned lies, and statistics
8/09/2016 8:19:44 AM

So what if its a company incorporate in England or America but owned or run by the Chinese government. ? Would it show on the register as being British or Chinese ?
wtf
8/09/2016 8:30:41 AM

So we have a generation who cant afford to get into farming, yet we allow sovereign gov'ts who can print their own money to buy it? If one looks at Abares figures, farm returns have not kept pace with the rise in land prices, How can it be? Deregulation of banking has unleashed a reptilian monster upon this country. We have become an economy dependant on a housing bubble to create new money into our economy, as evidenced by yest's figures this model is failing. Without public spending, Australia would have recorded negative growth - and been heading for recession.
Deregul8
8/09/2016 9:14:48 AM

Yawn! You get wifi with that tin foil hat on wtf?
wtf
8/09/2016 2:04:59 PM

Given that the FIRB chairman Brian Wilson has accepted a role as an advisor to the $180 billion private equity group The Carlyle Group, does this present a blatant conflict of interest? will he not have access to information that will put him in this position. It is amazing what level of control big business has on govt responsibilities, as there has not been a hint of this in the media, more evidence of the failure of our democratic process as no one can be held to account.
wtf
8/09/2016 2:15:33 PM

D8 explain to me how young people could save money to buy a farm with todays record low interest rates? or how has the lowering of rates/changes to capital and reserve requirements fuelled the growth in land values by making money so easy to get? has it not effectively created a greater divide between those who have and those who did not have, at the start of bank deregulation and this crazy manipulation of interest rate lunacy? rather than call names, how about u provide answers.
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Sorry did i get it wrong..? Rankins Springs is still open..?!
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No doubt a few frosted Freddies out there who will wish they had taken a closer look at the AGC
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Matthew, I was wondering if you had followed up this story with the farmer after the whole