Foreign investment in real estate

01 December 2014

Dr CHALMERS (Rankin) (18:10):  I rise to speak on the report of the Standing Committee on Economics entitled Report on foreign investment in residential real estate. I want to begin by thanking all of the committee staff who did their characteristically good job in supporting the work of the committee. I also want to thank all of the witnesses who made themselves available so that colleagues on the economics committee could get to the bottom of what is a very sensitive topic and what is a very sensitive area of public policy, because there are perceptions in the community about foreign investment in real estate which in many instances dwarf the reality of the incidence of foreign investment in real estate. At times, unfortunately, those perceptions are fed in a not particularly constructive way by small sections of the media and, as a consequence, the downside of foreign investment in residential real estate is often emphasised or exaggerated at the cost of a proper, robust debate about an important issue.

Of course there are some downsides to the foreign investment regime as it applies to foreign investment in real estate, and we should be very conscious of those and do what we can to close down any loopholes or fix any problems, but it is my view that the benefits of foreign investment in residential real estate are underappreciated. It is clear that foreign investment in real estate boosts housing stock, not just for foreigners but for the broader Australian community. It is also very clear that one of the things that is often said about foreign investment in real estate is that it competes with first home buyers and that it also pushes up prices. That is not particularly true. There is a lot of evidence that foreign buyers are not competing in the same specific markets as those of many Australian first home buyers.

When it comes to the report, I support the bulk of the recommendations, especially those which go to beefing up compliance activity, tougher penalties, better data collection and closer collaboration between different levels of government and also between agencies within a level of government, particularly federally. There are issues that need to be addressed in the foreign investment regime, and some of the recommendations are a step in the right direction.

We have not issued a dissenting report, though we do have concerns and, in some cases, substantial concerns with some of the recommendations. The member for Chifley, who is also the deputy chair of the committee, has gone through some of those concerns, and so I do not intend to repeat them here in my own brief remarks. What I would like to do is to focus briefly on attacks made by the chair of the committee on the people of the Foreign Investment Review Board, particularly its chair, Brian Wilson. Unfortunately, the chair of the committee has been attacking Brian Wilson throughout the process, whether it be through the media or whether it be at various speaking opportunities around the country. My view is that you can say what you want about the resourcing of the FIRB or the laws and regulations which it operates under, but it is disgraceful to slur a fine Australian who is a key part of the economic architecture of this country and who was very helpful to the committee's deliberations as well. It says a lot about the chair of the committee that she treats someone of the calibre of Brian Wilson as another opportunity to grab attention for herself for the purpose of her own political advancement. I have far more confidence in the chair of the FIRB than I have in the chair of the economics committee. I suspect anyone who has dealt with them both would have a similar view. Her behaviour throughout this process has left a lot to be desired. She has constantly gone for the cheap headline, a sneaky leak or a character assessment over proper efforts to get to the bottom of a difficult issue in a way that benefits the nation.

The member for Higgins, the chair of the committee, ought to know that the chair of the Foreign Investment Review Board does not determine the resourcing of that body and does not determine the Treasury resourcing. So to blame him for any holes in the foreign investment regime is petty; it is pathetic. What makes it worse is the silence of the Treasurer during all of this slurring of the FIRB chair. The FIRB is a responsibility of the Treasurer, yet, while the member for Higgins goes around the country bagging a fine person, the Treasurer remains mute. What kind of treasurer leaves one of the key people in his own portfolio undefended like that? It is important that not only the Treasurer's silence but also the member for Higgins's behaviour is put on the parliamentary record.

As I said before, we acknowledge the gaps in the FIRB framework, and we can either support or at least live with many of the recommendations of the report. We have also outlined where our concerns are. What we cannot cop are the gutless and attention-seeking attacks on the Foreign Investment Review Board's people, and the equally gutless failure of the Treasurer of the nation to speak up on their behalf.