New Proposal from Coalition: Streamlining the Foreign Investment Process

The Coalition has committed to implementing a streamlined approval process for foreign investors from key allies like Quad, Five Eyes, and AUKUS partners.

Shadow Treasurer Angus Taylor has announced the formation of a dedicated task force to establish a “white list” system, which will reduce paperwork and expedite approvals for trusted investors.

“Foreign investment screening remains crucial, and robust national security checks will be maintained. This approach aims for smarter screening, not weaker oversight—providing quicker yes or no decisions,” he stated in a release on March 4.

Taylor emphasized the objective of reducing bureaucratic obstacles by streamlining the approval process for trusted investors and cutting associated fees.

Additionally, the Coalition plans to assign the Productivity Commission the task of conducting an annual review of regulatory costs.

As per the Opposition, compliance costs for some listed companies now surpass $1 billion, acting as a “hidden tax” on consumers.

Furthermore, the focus on regulatory compliance is hindering innovation by diverting resources away from growth opportunities.

The Productivity Commission will evaluate the economic repercussions of regulations, prioritize them based on their impact, and suggest legislative changes to alleviate compliance costs.

Evaluation criteria encompass national security, competitiveness, economic implications, and investor integrity.

During the announcement, Treasurer Jim Chalmers highlighted the adjustments to safeguard sensitive industries, supply chains, critical infrastructure, data, and vital minerals. The reforms also included a more thorough evaluation of how proposed projects align with national interests.

“If a supply chain or an industry is predominantly controlled by foreign entities, it can be vulnerable to manipulation or interference, and in extreme cases, sabotage or espionage. We must exercise caution, especially in critical sectors like critical minerals, critical data, or critical infrastructure,” stated Chalmers.

Responding to queries on the target of the changes, the treasurer clarified that the focus is not specific to any particular country.

“The standards we apply to investments are universally applicable, regardless of the origin of the investment. In cases of investments in sensitive areas, industries, or locations, enhanced scrutiny is obligatory,” he stated.

Foreign Investment on the Rise, Housing Market Regulations

Recent Treasury data on foreign investment approvals revealed approval of 377 commercial investment proposals worth $46.6 billion in the last quarter, with the United States leading at $22.9 billion, followed by Singapore at $4.6 billion, and Canada at $1.8 billion.

Commercial real estate attracted the highest investments at $24.1 billion, with services following at $10.3 billion.

In the residential sector, approval was granted for 1,123 real estate proposals worth $1.3 billion, with China being the primary investor at $0.4 billion. Commercial investments had a median approval timeframe of 34 days, while residential proposals were processed in five days.

However, to curb foreign property ownership, the government has enforced a two-year prohibition effective from April 2025, barring non-residents, including temporary workers and students, from purchasing existing homes in Australia until March 31, 2027.

Investment Debate: Coalition vs. Government

The Coalition contends that its proposed measures will boost investment certainty, stimulate job creation, and enhance productivity, presenting its economic management as an alternative to Labor’s prevailing regulatory structure.

The forthcoming election will determine whether voters perceive these changes as essential economic reforms.

Bran Black from the Business Council of Australia underscored that the key to positioning Australia as an attractive investment destination is to address the fundamentals—such as industrial relations, tax systems, planning, and regulatory frameworks.

He also emphasized that energy costs remain a significant concern.

“There is minimal evidence of improvement in these fundamental reform areas. On the contrary, despite intensified global competition, Australia’s competitiveness is declining. In discussions with CEOs and directors, their primary apprehension is the inadequate competitiveness of Australia to attract investments from other nations,” Black articulated.