The FIRB is alive to the issue and is preparing for foreign investors to take more of an interest in Australian companies as economic activity cools, according to senior government sources.
The chair of the federal parliament’s powerful intelligence and security committee, Liberal MP Andrew Hastie, has also raised the issue directly with the FIRB.
Mr Hastie told The Age and The Sydney Morning Herald the COVID-19 outbreak had left the Australian business sector vulnerable to predatory behaviour by “foreign state-owned enterprises working contrary to out national interest”.
“More than ever, we need to protect ourselves from geo-strategic moves masquerading as legitimate business,” Mr Hastie said.
Victorian Liberal MP Tim Wilson, who also sits on the intelligence and security committee, said FIRB approval may need to be more broadly interpreted to keep some businesses and assets from being “preyed upon as an easy out” during the COVID-19 outbreak.
“We can’t allow foreign state-owned enterprises and their business fronts to use COVID-19’s economic carnage as a gateway to swoop distressed businesses and assets,” Mr Wilson said.
The current thresholds for referral to the FIRB include $15 million for agricultural land and $60 million for agribusinesses.
According to some advocacy groups, foreign investors could present a valuable lifeline to struggling Australian companies in the coming months. But each case should be assessed on its implications for national security, Grattan Institute executive director John Daley said.
“I can see why people are nervy about telco assets and energy assets … but the bulk of assets which are going to be discounted at the moment are retail businesses, and if someone from China wants to buy a chain of hairdressers or a retailer, then good luck to them,” he said.
“Foreign buyers of distressed assets aren’t necessarily bad buyers.”
Utilities providers and hard infrastructure assets such as ports, would also require special consideration from the FIRB and policy makers in the event of foreign interest, Mr Daley said, but there was little evidence of serious foreign interest yet.
In a statement, Treasury said it did not comment on particular cases it was looking at under the foreign investment screening regime.
“Under the Foreign Acquisitions and Takeovers Act, the Treasurer reviews foreign investment proposals against the national interest on a case-by-case basis,” the department said.
Samantha is the The Age’s CBD columnist. She recently covered Victorian and NSW politics and business for News Corp, and previously worked for the Australian Financial Review.
Anthony is foreign affairs and national security correspondent for The Sydney Morning Herald and The Age.