In June this year the Government’s announced a departmental working group (Treasury; Department of Prime Minister and Cabinet; Department of Agriculture, Fisheries and Forestry; Department of Foreign Affairs and Trade; Department of Sustainability, Environment, Water, Population and Communities; Department of Regional Australia, Local Government, Arts and Sport; and the Department of Resources, Energy and Tourism) to "canvass the issues and consult with the community on the development of a national foreign ownership register".
All well, until you remember that although "the Australian Government has an interest in foreign investment and land management, State and Territory governments have primary constitutional responsibility for land management, including land titles for agricultural land". The working group will accordingly need to work with State and Territory governments "to consider elements of a national register, and discuss how the register could interact with existing land registration systems and processes".
Information from the register will supposedly better inform public debate through improved transparency regarding foreign ownership. That's problematical, given poujadist attitudes about 'ownership of the national farm' and the interaction of register - recording what has been sold - with the foreign investment regulatory regime (ie permission for land acquisition under the Foreign Acquisitions & Takeovers Act 1975 (Cth) and Foreign Investment Review Board regime) and the Government indicating that Australia "continues to maintain an open and welcoming approach to foreign investment".
The expectation is that
Any registration obligations under the register will be of an administrative nature. While it will not form part of the foreign investment screening process where foreign investors need prior approval from the Government before investing in certain Australian agricultural land, over time a register will assist in informing the Government and the community about emerging investment trends.There is no definitive integrated national database of land ownership. One fuzzy indication is provided by the December 2010 Australian Bureau of Statistics Agricultural Land & Water Ownership Survey, in which the ABS estimated that 88.6% of agricultural land was entirely Australian owned at the end of 2010, with a further 5.9% of agricultural land being 'majority Australian owned'. Not all agricultural land is of equal value and the ABS has provided an estimate only. The Australian Bureau of Agricultural and Resource Economics and Sciences 2012 Foreign Investment & Australian Agriculture report categorised recent foreign buyers of agricultural land in three main groups
• agribusiness companies seeking to extend their activities up the supply chain to secure sources of supply;
• investment or pension funds seeking profits from owning and operating Australian agricultural land, but where those operations do not form part of any larger agricultural or food business; and
• purchases of farmland by foreign owned mining companies.That report also noted that although there may have been an increase in foreign ownership of Australian agricultural land in recent years "this ownership trend has not always been upward", as "foreign investors sell as well as buy land, with foreign landholdings tending to expand and contract at different times". The 2011 ABS Agricultural Land & Water Ownership Survey found that over 90 per cent of water entitlements for agricultural purposes are entirely Australian owned.
One difficulty reflects different data collection systems for regulatory and statistical purposes. Some definitions of agricultural land classify the dirt according to the use/business activities associated with that land (eg the Foreign Investment Review Board, the Australian Bureau of Statistics, the Australian Taxation Office and the Australian Securities Exchange). Others classify land on the basis of its location (notably many State and Territory registers).
The paper comments that -
At the State and Territory level, only Queensland maintains a foreign ownership of land registration system, which is operated in conjunction with the land title registration system operating in that State. This registration system is focussed on all foreign acquisitions of land in Queensland rather than specifically on agricultural land.
In Queensland, as in other States and Territories, all investors must register their acquisitions of land titles.
The existence of different land registration and screening regulations across Australia opens the potential for duplication of data collection and hence the reporting burden on foreign investors.
Each State and Territory already has well-established land registration systems and processes. There is not, at a national level, a land register or title system. Additionally, States and Territories also capture ownership information relating to water access rights within register systems. These registers do not currently capture foreign ownership. There is currently no national level water register or title system.
The design of a national foreign ownership register for agricultural land will need to consider ways, if any, for business-to-government reporting processes to be standardised across all levels of government. To minimise the regulatory reporting burden, an important principle for the collection of the data, is that data is collected as a by-product of existing business processes. For example, this could include the re-use of data obtained through State and Territory land title systems to populate a register.Queensland is the only state that has a specific register for monitoring foreign ownership of land, under the Foreign Ownership of Land Register Act 1988 (Qld). That statute requires notification for all land rather than just agricultural land. The level of foreign ownership in that state appears to be low: around 2.6% of all land in Queensland as at 30 June 2011.
Establishment of the national register will need to grapple with -
• notification systems for land use
• differences between states in requirements for registration of water rights
• mechanisms for monitoring obligations to update the register eg on a change of control where no transfer occurs
• registration of long-term leases (interests in land for the purposes of the Foreign Acquisitions and Takeovers Act 1975 (Cth) but not registered in Victoria).