Australia blocks sale of giant property portfolio

Speaking from Manila where he is attending the Asia-Pacific Economic Cooperation summit, Mr Turnbull said Treasurer Scott Morrison’s decision to block the sale of the 101,411-square kilometre S Kidman & Co. estate was made exclusively on national interest grounds, with the property close to a military test site.

The company has been the focus of a fierce bidding war between competing Chinese firms for the past few months, one of many major Australia cattle firms being eyed by Asian investors in recent years. “It is actively used for weapons testing and trials and it’s an area that obviously raises national security issues”.

Australian Treasurer Scott Morrison on Wednesday confirmed the seven houses in New South Wales, Victoria and Queensland, ranging between 154,000 Australian dollars and 5.2 million Australian dollars, would be sold after their owners had breached foreign investment rules.

Federal Agriculture and Water Resources Minister Barnaby Joyce said he agrees with the decision announced today by Mr Morrison.

Comment has been sought from advisors to the now-blocked sale. American officials were annoyed they were not forewarned, and this week President Barack Obama reportedly said to Malcolm Turnbull that the U.S. would like to be given a heads up on such matters.

“This includes an outright ban on the sale of agricultural land and water licenses to wholly-owned subsidiaries of foreign governments and a much more stringent national interest test”.

Previously, the Australian Foreign Investment Board only screened foreign investment for purchases of agricultural land over AU$252 million.

Mr Morrison added that the China Free Trade Agreement will remove a lot of barriers to Chinese market and provide Australian service exporters improved access.

Opposition Leader Bill Shorten said while he had concerns over the Kidman sale, the government needed to be careful what message it sends to foreign investors.

“I note that the Secretary of Defence, though, has been very forthright in setting out what he believes the issues are in terms of any compromising of the national interest, particularly when it comes to defence issues and the Secretary of Defence has made his view and his department’s view well known to the Northern Territory Government and they’ve taken a few decisions”.

Concerned it is losing control of its food security, Australia in February slashed the amount beyond which land purchases would require regulatory approval and said a registry of foreign land ownership would be set up.

According to Australian laws, except under special conditions, foreign nationals are not permitted to buy a secondhand house in the country, but they can buy new ones.

“By 2019 the proportion of people age sixty and older in China will exceed that of people ages 0-14”, Morrison said.

Foreign takeovers are a sensitive matter in Australia, where nationalistic politicians vigorously oppose deals seen to threaten Australia’s security.

“Agriculture is on the cusp of its boom cycle, but the need for capital investment is a significant roadblock to growth”.

“Now, personally I had concerns – it’s a big issue – but that’s why we have a Foreign Investment Review Board process”, he said.