Today I am announcing that the Commonwealth Government will seek to amend the Foreign Acquisitions and Takeovers Act 1975 (the Act).
The Act provides the basis for the Treasurer to examine proposed foreign investments in Australian businesses and assets to ensure they are not contrary to the national interest.
Even in the face of a global economic recession, investors recognise the underlying strengths of the Australian economy, and we are seeing strong interest in investments in the Australian resource sector.
The Government welcomes foreign investment in the development of Australia's resources.
In light of the growing use of more complex investment structures, the Government intends to clarify the operation of the foreign investment screening regime.
The Government will amend the Act to ensure that it applies equally to all foreign investments irrespective of the way they are structured.
In particular, the amendments will ensure that any investment, including through instruments such as convertible notes, will be treated as equity for the purposes of the Act.
It is our intention to introduce the amendment into Parliament as soon as practical and will be effective from today.
It is important to note that this announcement clarifies the operation of the Act, but does not pre-empt any final decision on any current or future investment proposal.
All applications before the Foreign Investment Review Board are examined on a case by case basis against the national interest.
There has also been some media commentary about the implications for the Australian tax system of various resource investment proposals. These issues are within the terms of reference of Dr Henry's Review of Australia's Future Taxation System.
12 February 2009