HOCKEY:
Following the excellent work by the Parliamentary Secretary to the Treasurer. We will be saying more about the overall foreign investment regime in particular in relation to residential land and residential purchases in Australia.
KARVELAS:
That’s Treasurer Joe Hockey giving a gold star to Kelly O’Dwyer his Parliamentary Secretary who joins me now from Canberra. Hi Kelly.
O’DWYER:
Hello. How are you Patricia?
KARVELAS:
I’m well. Now the Treasurer is tightening the rules on how much farm land foreign investors can buy. Why?
O’DWYER:
Basically what we want to do is have a look at exactly who owns what when it comes to agricultural land. If you were to ask the question today Patricia who owns what and where, we couldn’t give you an answer to that question. That’s true of agricultural land. That’s true of residential land. There’s a lot of discussion about the levels of foreign investment in this country and in order to have a proper debate about it, we need to make sure that we are basing that debate on the facts. Strengthening our foreign investment regime and framework to ensure that we screen agricultural purchases at $15 million cumulative means that we have a better picture of who is purchasing, where they’re purchasing and how those transactions are taking place.
KARVELAS:
So we get the bigger picture and what do we do with the picture?
O’DWYER:
It gives us an understanding of exactly what levels of foreign investment are coming into the country. There’s a lot of discussion I know, people don’t always have all of the facts about exactly which countries, which investors are investing in Australia. It’s good for us to have a good picture of this because foreign investment is vital to our country. It’s vital to increasing growth in our economy and increasing jobs. We are absolutely in favour of foreign investment but we need to also make sure that we have integrity within our system, our foreign investment framework, and we can only have integrity if we have real data around who is purchasing, what they’re purchasing and where and that’s where this screening threshold comes in. We’re reducing the threshold from $252 million down to $15 million so that the Foreign Investment Review Board can look at those applications and make sure that it is not contrary to the national interest.
KARVELAS:
The new rules start from March 1. There are also new rules for foreign investment in residential properties and you’ve been pushing for this for some time. What are those new rules?
O’DWYER:
So there is a broader package that is going to be announced in the not too distant future Patricia and while I can’t give you a preview of exactly what is going to be announced…
KARVELAS:
You can give me an indication surely Kelly.
O’DWYER:
What I can certainly do is refer back to the House Standing Committee on Economics and the report that was delivered late last year. That report was very critical of the fact that again we didn’t have a register of residential properties and again that was an issue and a recommendation made by the committee that needed to be resolved. Another of the recommendations was around the fact that we simply do not have a strong or robust enough audit compliance and enforcement regime when people break the rules. I’ll give you an example, if a non-resident foreign investor seeks to purchase an existing home, under the current rules, they’re not allowed to do it. But if they were to do it anyway and the Foreign Investment Review Board found out about it, under the current rules, that person would be able to keep the windfall gain of that purchase – if their house had gone up in value between the time that they had purchased and the time that they were forced to sell. The previous Labor Government didn’t close these loopholes. In fact, the previous Labor Government didn’t have any court enforced action since 2006. They didn’t divest people of illegally purchased property. This is a problem and we need to actually resolve it – otherwise you can’t give people confidence in the framework.
KARVELAS:
Isn’t it sort of a basic tenant of being someone who is in the Coalition, particularly in the Liberal Party, to believe in foreign investment, to believe in this money coming into the country. You’ve always argued previously – not you as an individual but your side of politics – that this is a really good thing for the economy. I wonder why you’ve had a change of tune. Why has there been such pushback on foreign investment? It seems – well there are almost elements of xenophobia in it. There are certainly concerns people are raising which seem to me to be based on those sorts of concerns. Do you agree that that is part of the story?
O’DWYER:
No I don’t agree it’s part of the story. In fact I think that we’ve been entirely consistent on this. We do welcome foreign investment but what we say is that foreign investment needs to be channelled into those areas that are going to help develop our economy. So under our existing framework that applies to residential property, we encourage foreign investment to be directed into new dwellings. Into new units, new homes, new apartments, so that they can be built in order to house more Australian citizens, in order to be able to build the properties that people would like to be able to invest in so that again people can rent those properties, to live in. It adds to our economy because if you’re building and constructing these new dwellings, you’re adding to the economic benefit to Australia – new jobs and also suppliers getting jobs as well from the building industry. So we don’t have a problem with foreign investment, but where it doesn’t necessarily add is where you already have existing homes - they are already built. We want to channel foreign investment into those new dwellings where it will add to the stock that’s available to everybody.
KARVELAS:
Let’s take a listen to what the PM said about the new rules today.
PRIME MINISTER:
This is not saying that we don't want foreign investment; we do want foreign investment, but it's got to be the right investment, that serves our purposes, it needs to be transparent and that's exactly what will happen as a result of this important election commitment.
KARVELAS:
So you don’t think there is any level of xenophobia in any of this? The Prime Minister has defined it in a way of the right investment. What defines the right investment?
O’DWYER:
As I just mentioned before, channelling investment in the case of residential property into building new dwellings which adds to the housing stock that’s available for everybody to purchase and to rent, which adds to jobs, which adds to our economy. That’s a positive message and a positive story. It’s one of the great benefits that foreign investment can bring. We want to make sure that when we look at the foreign investment that’s coming into the country it is properly screened. We currently do that at the moment through the Foreign Investment Review Board. They have very broad parameters to look at that investment. They need to make a recommendation to the Treasurer as to whether or not that investment will be contrary to the national interest. They can take into account all sorts of factors in making that recommendation and ultimately the Treasurer makes a final decision and that decision is not appealable, that decision is ultimately the decision on what is in the best interest of the nation. Now that system works well. The reason we have lowered the threshold is because we think it is better and more transparent for there to be increased screening around the agricultural purchases that are taking place. This is in fact a good story. It won’t change the way that those properties are evaluated but it will mean that we are taking a look at it which is going to provide, I think, some confidence and comfort in the way that our foreign investment framework works.
KARVELAS:
On RN Drive we’re speaking to Parliamentary Secretary to the Treasurer, Kelly O’Dwyer. Moving away from that – Joe Hockey has been under intense scrutiny, critics are calling for him to be replaced. They are reports of cause that Malcolm Turnbull has been sounded out for the position. What do you make of all of this reporting and the leadership spill that happened earlier this week? There’s intense pressure on the Treasurer. Do you think that Malcolm Turnbull would be more appropriate in that role?
O’DWYER:
I think Joe is doing a fantastic job. I enjoy working with Joe as Treasurer. He is somebody who works incredibly hard. He is focused on the nation’s best interest and he has a very big job – let’s not forget that the position he inherited was very different to the position that Wayne Swan inherited when he came into Government after 2007. When Wayne Swan came in there was no net debt. There was money in the bank and we were able to deliver year after year surpluses there was no blowout in spending...
KARVELAS:
The business community has been pretty vocal about Malcolm Turnbull being potentially a better Treasurer. Do you agree with them? Have they raised this with you?
O’DWYER:
We’re very fortunate to have a lot of very talented people in our team. Malcolm Turnbull is doing a fantastic job as Communications Minister. He is a very able Minister and he is serving that portfolio area incredibly well. Just as Joe Hockey is doing a terrific job as Treasurer and will continue to do a terrific job in that role and as I said to you before, he inherited a very different position, he inherited gross debt adding up to more than $667 billion…
KARVELAS:
Let’s move on to one issue because I know that you think Labor had a lot of debt so I think that we know that you think that. Let’s move on to the next thing. The PM’s Parliamentary Secretary Alan Tudge was speaking to the ABC earlier today and he said that you’ve scrapped the Medicare Co-Payment.
TUDGE:
We’ve dropped the Medicare co-payments and we’re starting again from scratch. Now the policy which we had on the table in January and February is gone so we’re now starting again from scratch in terms of a deep conversation with the Australian people and with the medical profession as to how to make Medicare sustainable.
KARVELAS:
Alright so that’s Raff Epstein from 774 ABC Melbourne talking over Alan Tudge. Is this the first you’ve heard that it had been completely scraped? What’s your word on this?
O’DWYER:
I never like to contradict a fellow member of the team but certainly there is consultation that is going on around the Medicare Co-Payment. There has been no announcement to scrap it. The Co-Payment is an area that is being consulted on by the Health Minister. She is talking with various groups that would be affected by it. She is talking with GPs about it. We have already made some changes…
KARVELAS:
So let’s make this very clear Kelly O’Dwyer – you’re saying it has not been scrapped even though Alan Tudge says it has.
O’DWYER:
That’s correct.
KARVELAS:
Ok so you did, there was no clarity on it being scrapped. It’s still on the table?
O’DWYER:
Correct.
KARVELAS:
Aright well that’s interesting. That’s a different perspective. I really do appreciate you coming into the studio to talk to us on RN Drive though.
O’DWYER:
No worries. Thanks Patricia.
KARVELAS:
Thanks Kelly. That’s Kelly O’Dwyer she’s the Parliamentary Secretary to the Treasurer and she’s revealed to us that the Medicare Co-Payment is actually still on the agenda so contradictory reports today from the Government about whether the Co-Payment is on the agenda. Kelly O’Dwyer says it has not been scrapped. On RN Drive you’re with Patricia Karvelas taking you through to 7:30 this evening.