The Australian government plans to tighten its control of agricultural land sales to overseas buyers, in a move set to herald more scrutiny of Chinese vineyard purchases in the country.
From 1 March, Australia will begin screening all ‘rural*’ land purchases by overseas buyers at more than A$15m, said the country’s agriculture ministry. The current threshold is A$252m.
Australia’s prime minister, treasurer and agriculture minister said the government was ‘putting in place better scrutiny and reporting of foreign purchases of agricultural land’.
If enforced, the move could have important consequences for Chinese buyers of Australian vineyards.
The reduced threshold is in-line with a deal reached on rural land as part of the China-Australia Free Trade Agreement, agreed by China and Australia in November last year.
However, while the trade agreement is not expected to come into force until the fourth quarter of this year, the move to cut the screening threshold will likely to lead to additional scrutiny over smaller-scale vineyard purchases by Chinese non-government investors from early next month.
In 2014, Chinese investors were involved in several deals for Australian vineyards. Earlier this year, Hong Kong-based CK Life Science said it had purchased 650ha vineyards from McWilliam's for $15.7m.
Neither CK Life Science nor McWilliam’s were available to comment on the government’s move by the time of publication.
‘We cannot be sure the benefits of the government's decision will outweigh the costs as no regulatory impact statement has been undertaken,’ Jennifer Westacott, CEO of The Business Council of Australia, was quoted as telling ABC News. She added that the change of rules may ‘send the wrong message’ to foreign investors.
The Australian government disagreed. ‘Foreign investment always has, and will continue to be, integral to Australia’s economic success,’ it said.
China was the eighth largest source of foreign investment in Australia in 2013, with investments totalling A$31.9bn, accounting for 1.3% of overseas investment in the country, according to Australia’s department of foreign affairs and trade.
Rural land is defined as ‘land used wholly and exclusively for carrying on a business of primary production’, according to the Australian Treasury.
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