Legislative Council Fifty-Second Parliament, Second Session (52-2) 52 2 Parliament of South Australia Legislative Council published Bills Foreign Ownership of Land Bill FOREIGN OWNERSHIP OF LAND BILL Introduction and First Reading Introduction and First Reading The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE (19:52): Obtained leave and introduced a bill for an act to provide for the disclosure of foreign ownership of certain land; and for other purposes. Read a first time. Second Reading Second Reading The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE (19:53): I move: That this bill be now read a second time. I am very proud to table this bill, partly because 2012 is the Year of the Farmer. I could forgive most members in the chamber for not knowing that it is the Year of the Farmer, because here we are now in July and, whether at a federal level or even within our own state, to me there has been very little celebration or opportunity to expand the causes and the positives of farming, so I think it is very relevant that this bill be tabled and debated during this year. The world demand for food is to grow 77 per cent by 2050, which is only 38 years away. In the Asia-Pacific region, the current destination for 40 per cent of Australia's $27 billion food exports, the food demand will double in just the next 30 years. Talk of an export 'dining boom' in growing middle-class Asia, particularly in China, India and Indonesia is now a reality. When I was a young person, we dreamt of this opportunity. It was talked about, but it was more of a dream. Today, it is a reality. The recent Colliers International 2012 Rural and Agribusiness Research Report revealed that rural land is valued at $264 billion nationwide; but, for the first time since 1993, rural land value, however, decreased in 2011, down 12 per cent on 2010. Sales of large properties have begun to improve as foreign investment buoys local competition as transactions increase for big dry and irrigated farming country and large high rainfall grazing holdings. The Gillard government released its National Food Plan yesterday, and the federal agriculture minister, the Hon. Joe Ludwig, said: Global food security is at the heart of social and political stability—and it is in our interests as a nation. This in turn requires us to nurture our food producers. Previously, Prime Minister Gillard said we could become the food bowl to Asia. However, whilst I agree with Prime Minister Gillard on this, I thought we were working on becoming the supermarket to Asia back in the earlier days of prime minister John Howard when he put out the blueprint for being the supermarket, that is, Australia providing the food to Asia. In June, we had a very important statement from the Australasian chief of the second largest food company in the world, namely, Kraft Foods. Rebecca Dee-Bradbury told a business lunch in Sydney in June: ...the country is missing out on a huge opportunity to export manufactured foods to Asia. After recently touring Asia-Pacific food hubs such as Hong Kong, Shanghai and Singapore as part of an industry delegation, she said: It may shock you to understand that Australia is not seen as a high value food innovator. It is seen as a critical supplier of food commodities. The impact on Australia's largest manufacturing sector, if we become a farmgate supplier, is unthinkable. It will [clearly] impact jobs. It will impact brands. It will impact customer profitability, consumer choice and ultimately the national accounts. We need to act urgently. Senator Ludwig in the National Food Plan yesterday supported, as Family First does, foreign investment but, on ownership, he said that the government had: ...a policy of providing a balance between encouraging further investment and ensuring those investments are not contrary to the national interest. The government will try to do so by improving the transparency of foreign ownership through better data collection. At present, all that has been done is a working group, albeit that this has been promised to us now for several years, and minister Ludwig has said that the Gillard government will look at: ...how the register would interact with existing state and territory land title registers, including the Foreign Ownership of Land Register in Queensland. This is all the more reason, we think, to have our own register here to feed into that federal register. It is interesting that you can FOI, from some states in Australia, very easily who has foreign ownership on agricultural land in their state but here when we tried to do it with the Lands Titles Office we were told they do not keep the data. To illustrate why we should operate independently of the federal government on this is the following 12 June article in The Australian illustrating that it seems to have been only in the last month that the federal government has taken a greater interest in this issue. The government has distanced itself from comments made by trade minister Craig Emerson that a national register of foreign-owned agricultural purchases would allay community concerns and better inform the public debate. Dr Emerson, who is not only minister but also a doctor—and you would probably know that, sir—was reported yesterday in The Australian expressing a personal view that a register would increase transparency about the extent of land purchased by foreign interests. I happen to agree with minister Craig Emerson; I think he is spot on with this, and I encourage him to push hard for a national register. Assistant Treasurer David Bradbury, who has carriage of foreign investment duties, actually refused to endorse Dr Emerson's comments on the benefits of a national register. While not ruling out the prospect of a register, he defended the regulatory regime and government initiatives as sufficient. So far, it is fair to say that, unfortunately, both the major parties have jumped around this issue without addressing it, so I encourage minister Emerson to keep pushing the matter. We need to protect our sovereign interests and investment from industries that back on to Australian soil, and I believe that most South Australians, and Australians, want to see water and land and food surety being protected in South Australia and, indeed, Australia. The track record on the federal government's data collection is poor, given its failure on the criticisms of the ABARES and ABS research on foreign ownership of farming land. We need a register here, linked into our Lands Titles Office, on land purchases and registration. ABARES says that 11.4 per cent of agricultural land is foreign owned, but from our own checking we think that is actually a conservative figure. Foreign ownership of water is another matter, as well as poor historical auditing of water storages and diversions in the Murray-Darling Basin. Importantly, the current foreign investment rules require the Foreign Investment Review Board to review purchases only over $244 million in value—and I think if you happen to be purchasing Australian land and you are an American citizen or registered as a corporation in America it is more like $500 million. It is interesting that in New Zealand, where they have tougher laws—possibly brought in by the former Labor government in New Zealand, but certainly now under the Liberal government— An honourable member interjecting: The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE: —or the Nationals, but still they are conservative—I think it is only $5 million and you actually have to get approval. In fact, when China tried to buy up to seven dairy farms in New Zealand recently, the federal government in New Zealand took that to a challenge in the court and won, and the Chinese were not allowed to buy those dairy farms. As many of you who listen to FIVEaa from time to time would know, Leon Byner started a 'Don't Sell Australia Short' campaign, and has thousands of people subscribing to that. Every time the issue of foreign ownership of agricultural land, family farming and water is raised, whether it is on ABC or FIVEaa talkback, there is quite an outcry against them being able to purchase the land. This proposal for a state-based register, as they have in Queensland, will help feed in data, but as a sovereign state we also ought to know this ourselves without relying on the federal government. In respect of recent sales, it is very interesting that former prime minister Bob Hawke is now running around looking to broker large sales of land—some parcels up to 30,000 hectares—in Western Australia's Ord River region to a Chinese consortium, and there is controversy over him allegedly using his taxpayer-funded facilities, as a former prime minister, to accommodate this. To be fair, I understand that the former Liberal treasurer Peter Costello has also been interested in facilitating this Chinese purchase of the Ord River scheme. I find that quite disappointing. Whether people are in the city and do not have an opportunity to farm, or whether they are young farmers—and I see them where I live, including my own son—who have so much capacity to produce more food, we should be focusing on facilitating Australian young people to get up into that Ord River scheme and open up an area of land, rather than having former federal MPs running over to consortiums in China and other places to encourage them to buy there. I just shake my head. I will give a few examples to the house that are closer to home, or that we know of without a register. At Telopea Downs, across the border from the South-East at Kaniva—in fact, I understand that some of that land does come into South Australia in the very lowest part of the South-East—one of the countries in the Middle East, state-backed by the Hassad Food group, has now bought 40,000 hectares. That adds to the company's listing already across Australia of 200,000 hectares listed on its website. It is now reported that it is looking at holdings of 250,000 hectares of Australian farmland. That comprises more than half the land surface area of Kangaroo Island owned by one Middle East country state-backed food group. They have a goal to purchase, in US terms, $700 million worth of land acquisitions strategically across the world to ensure their country's food security. It is worth noting that public and private owners from that company now own more land outside their own Middle East country than the country's own land surface—which is just mindboggling—all for food security. Sure, they need food security but surely Australia should be the country providing that food to them for food security and buying back oil, rather than them selling us oil and our food potentially going straight overseas. If you do not believe this, there is another situation at the moment where a Chinese government-backed company is, allegedly, now about to start directly shipping wool from land it runs sheep on in Australia straight back to the mills in China. Apart from some work and, I guess, some tax that we get, Australia misses out altogether. The Chinese luxury textile group, Shandong Ruyi, and Victorian wool processors, the Lempriere family, have recently placed an application before the Foreign Investment Review Board to purchase Cubbie Station in Queensland. We all know that Cubbie Station has the largest water licence in Australia and, in fact, is at the absolute head of the Murray-Darling Basin. I know from reports in the media that the Prime Minister and her government considered for a short time purchasing Cubbie Station when it was on offer. With $13 billion worth of money available from the federal government, like many South Australians and Australians I was hoping that it would purchase Cubbie Station. However, now it appears more likely that we are going to see the Chinese purchase Cubbie Station and, together with that, purchase the largest water entitlement in Australia. Just for interest, Cubbie Station has a 93,000-hectare cotton growing and irrigation operation with a very large water licence in the Murray-Darling Basin. We have just seen our Premier, the Hon. Jay Weatherill, come back from Shandong where he wants to deepen ties which have been in existence since 1986 between the sister states of South Australia and Shandong. I applaud that, but I would like to see our food being produced here and going over to Shandong rather than them directly owing it and our missing out. In January, our research revealed that both the federal Department of Foreign Affairs and Trade (DFAT) and Austrade had organised a visit by presidents of Chinese companies to discuss major purchases. The Chinese firms reportedly plan to spend $500 million in acquiring Australian current or potential food producing assets and, in some cases, they get water with that, as was the case when the managed investment scheme Timbercorp, which was actually focused on timber, decided to develop, at taxpayer benefit, massive almond production in Victoria, close to the South Australian border. When they went, sadly, into receivership a Singapore-based company purchased the almonds, the land and the water for, allegedly, about the price of the water. So there is another example. We have also seen $350 million in Queensland and Western Australian farmland being promoted through DFAT and Austrade, 30,000 hectares of New South Wales and Tasmanian farmland to produce wool, and a $25 million purchase of a 20,000 hectare cotton property. In the second half of 2011, a Chinese firm paid $316 million for Tully Sugar, a Queensland major sugar-producing asset. It is worth noting that these investments are unlikely to hit the Foreign Investment Review Board radar with a $231 million threshold for one purchase. Senior Weekly Times reporter Xavier Duff says that in today's times there are more controls on a foreign citizen buying a Gold Coast apartment than on buying thousands of hectares of prime agricultural land. There was a report in the Weekly Times that one commercial property's website is selling farms to Chinese investors as a means of aiding visa applications to get into Australia. Contrary to that, Elders CEO, Mr Malcolm Jackman, who is a member of our government's Agribusiness Council, recently said South Australia is set to return to its position as an agricultural-rich state, also saying that you might see South Australia being the richest state in Australia on the back of opportunities and existing industries here already. He said that we will see agriculture become one of the growth industries in Australia. I support Mr Jackman's assertion. Mining is prone to boom and bust cycles. We have to capitalise on the boom but also keep supporting the number one most sustainable industry for South Australia and the nation—agriculture. Sadly, Mr Jackman could not attend a recent Food Security SA function after a serious leg injury, but I am hoping to have him speak with us later in the year. Back to Mr Xavier Duff. Duff asks: Australia began life as a colony, seen only as a source of cheap raw materials for a colonial master. Do we really want history to repeat itself? The Australian public seem to have a similar view. A recent Lowy Institute poll found that, of 1,005 Australians polled, 81 per cent were against allowing foreign companies to buy Australian farmland to grow crops or farm livestock, with 63 per cent strongly against foreign ownership of farmland. In conclusion, this bill is about a number of things. It is about transparency. Part of the motivation has been that under FOI the Lands Titles Office has been unable to tell us how much foreign-owned land there is at all. It will not duplicate any hypothetical federal foreign register—that is all it is at present, just a discussion—and what if there is a change of federal government in the next 18 months? Will the Liberal government pursue this register? We are waiting to hear from the leader, Mr Abbott. The Queensland register, on which we have modelled this, saw a jump from just over one million hectares in 2008 to now over four million hectares of foreign-owned land. So, in just four years in Queensland alone we have seen three million hectares of additional agricultural land become foreign owned. In other words, having that register has helped to illustrate that the historical foreign investor hunger for residential, commercial and industrial sites has now grown to agricultural land. Interestingly enough, to give you an idea, the four million hectares of land, now agricultural land, in foreign ownership—with the intent of food security for those countries overseas and not for Australia and not for Australia's direct economic or job opportunities—is actually the size of Denmark. The bill requires current foreign owners to register, and anyone who buys South Australian land must subsequently go on the register as a foreign owner. All forms of ownership are captured to prevent people circumventing the register. To repeat, for colleagues' interest when they look at this prior to debate on the bill I am introducing, our bill mirrors Queensland legislation, which imposes a $75,000 penalty for noncompliance with the register (if you make a false statement, for example), but also empowers the government, where a person has not properly made an entry in the register, that is, they are a foreign entity and they have said that they were not, to then require that foreign entity to actually forfeit the land back to the Crown. That is fairly harsh but it is the way to ensure we have transparency and an honest register. The fundamental difference is that our focus is on farming land, which is land outside of townships and the metropolitan area. So, unlike Queensland, we are limiting this bill to land that is not residential, commercial or industrial. It is land zoned as: primary production; remote area land in the Far North outside of the council areas; other land that may be in use as farming land, such as watershed zones and the River Murray flood plain where there are irrigators, due to historical rights to be there, but their zoning is flood plain. That ought to reduce the work, and therefore the cost, of implementing the register we are setting up here in comparison to Queensland. I ask the government officials who will look at this to look at it as not being too onerous on their general work. It will also be vital, and the bill makes it possible, that there be a public register online that members of the public can access to get up-to-date information on the level of foreign ownership in South Australia. That would allow any South Australian, or indeed any Australian, to register online with the LTO and see what is happening with the sale of family farming land and water in our state. To conclude, there is also another anomaly. At the moment, on Eyre Peninsula— The Hon. T.J. Stephens interjecting: The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE: I am concluding twice. It is a prerogative I have in introducing a bill. The Hon. T.J. Stephens interjecting: The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE: You are holding me up. To conclude, especially for the Hon. Terry Stephens— Members interjecting: The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE: I will use that in my summing up remarks before we vote on the bill. To conclude—and I will keep it—another anomaly is that, at the moment, on Eyre Peninsula, the Chinese can purchase land to look at iron ore mining opportunities. In fact, they have done that and there is one company there now which the Chinese owns 51 per cent of. So, it is very clever and very opportunistic for the Chinese. If they decide they do not want to take that iron ore—and the aero electromagnetic work and exploration work done there looks pretty good—they can use some of the best grain growing country on Eyre Peninsula, crop it and take that grain directly back to China. Then, one day, they can decide, at their leisure, to dig it up for iron ore. I am not sure that is what we want. I am sure it is not in the state's long-term interests. The Hon. T.J. Stephens Legislative Council The Hon. T.J. Stephens: What if they want to buy your dairy? The Hon. R.L. BROKENSHIRE Legislative Council The Hon. R.L. BROKENSHIRE: I do not want them to buy my dairy. I want a reasonable farm gate price so that we can export value-added product to China and then bring back manufactured goods from China. It has to be a two-way street with trade if we are to be able to keep Australia for future generations (economically) the way we have been so fortunate to enjoy it, thanks to the vision and strength of our forefathers. It is now our chance to strengthen things to protect it for future generations. I emphasise that the Queensland foreign register system has been in operation for 14 years. I would encourage members to have a look at their legislation. It is time that we did something. It is what the voters want. I commend the bill to the house. Debate adjourned on motion of Hon. G.A. Kandelaars.