Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Wilmar Sugar Wilmar Sugar Australia Limited ABN 47 098 999 985 Level 1, 5-21 Denham Street Townsville QLD 4810 PO Box 642, Townsville QLD 4810 Australia Tel + 61 7 4722 1972 Fax + 61 7 4724 5715 info@wilmar.com.au www.wilmar-international.com 23 September 2019 Committee Secretary Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 By email: Northernaustralia.sen@aph.gov.au Submission to the Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Please find attached, Wilmar Sugar Australia’s submission to the Committee in relation to matters set out in the Terms of Reference agreed by the Senate on 4 July 2019. We are grateful for the extension granted to us last week to allow this submission to be completed during a particularly business time for our industry. Yours sincerely John Pratt Executive General Manager North Queensland Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Wilmar Sugar Australia submission to Senate Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda 23 September 2019 Page 1 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy Table of contents 1. Background............................................................................................................................................... 3 2. Executive Summary ................................................................................................................................. 5 3. Facilitation of private investment ........................................................................................................... 7 4. Economic and social benefit delivered .................................................................................................. 8 5. Measures that capture the full value of existing industries ................................................................. 9 6. Measures taken to develop a skilled workforce .................................................................................. 12 7. Emerging national and international trends impacting ...................................................................... 13 Page 2 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 1. Background Sugar is one of Australia's most valuable agricultural products earning about $2 billion annually in exports and domestic sales, and sustaining communities along the Queensland and northern NSW coastline. Approximately 95% of Australia’s sugar is produced in Queensland – around half in eight North Queensland mills owned and operated by Wilmar Sugar Australia Wilmar entered the Australian sugar industry in 2010 with a $1.75 billion purchase of Sucrogen from CSR Limited. The Australian investment increased to almost $1.9 billion within 12 months with acquisition from administrators of a failed grower cooperative mill at Proserpine. Wilmar has mills in the Herbert River, Burdekin, Proserpine and Plane Creek/Sarina districts. We are not only Australia’s largest raw sugar producer and exporter, and a major sugar cane grower in our own right, but also a national leader in renewable energy: one of Australia’s largest generators of electricity from biomass (more than 15% of Queensland’s renewable energy); and one of Australia’s three major bioethanol producers (and the oldest at 92 years). Wilmar holds 70% of the Sugar Australia and New Zealand Sugar joint ventures with Mackay Sugar Limited refining sugar and marketing a range of sugar and sweetener products under the familiar brands CSR, Chelsea and Equal. Beyond sugar, Wilmar’s interests in Australia include leading food company Goodman Fielder and its iconic brands distributed through Asia and the Pacific, as well as commodity merchandising and logistics company Wilmar Gavilon. In all, Wilmar companies in Australia employ about 7,000 people – more than 2,000 of them in regional Queensland where many communities rely heavily on our sugar mills for personal income, job opportunities, general commercial activity and community wellbeing. Our parent company, Wilmar International Limited, is Asia's leading agribusiness group and one of the world’s largest sugar traders. Wilmar’s investment in the Australian sugar industry followed a period of industry review and reform that dismantled longstanding and rigid regulation of the industry. In 2004, an all-of-industry taskforce appointed by government to guide change, identified sustainability and international competitiveness as the key to viability into the future. The path was mapped in a paper entitled Sugar Industry Oversight Group Strategic Vision. The bipartisan view of that expert taskforce was that future viability of this vital Australian agricultural industry depended on: ‘A commercially vibrant, sustainable and self-reliant raw sugar and sugarcane derived products industry through: committed cane growers and millers being responsive to international and domestic market forces; and operating in an open, deregulated industry environment, within Australia’s corporate governance framework’. Subsequent deregulation of the industry in 2006 was the most comprehensive attempt yet by federal and State governments to implement policy that would assure the industry’s future and deliver economic, social and environmental benefits to North Queensland Unfortunately, the momentum that followed deregulation in 2006 was arrested and reversed by unexpected re-regulation in 2015 under amendments to the Queensland Sugar Industry Act (so-called Grower Choice amendments) – amendments passed by State Parliament against the advice of the Queensland Productivity Commission and a Parliamentary committee and against the wishes of the incumbent government. Page 3 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy The subsequent and predicted halt to industry development was confirmed when in 2017 the Federal Government underpinned Queensland legislation with a federal, mandatory Code of Conduct. Once again, this ignored advice of experts – this time the federal Productivity Commission which warned that such a code of unnecessary, unjustified and undesirable. Re-regulation has placed the industry – once again - in a vulnerable position. Page 4 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 2. Executive Summary The 2015 White Paper Our North, Our Future: White Paper on Developing Northern Australia added to investment confidence with an unambiguous statement that: ‘A strong north means a strong nation’ The White Paper was not only optimistic, but aspirational: ‘Developing Northern Australia, the Commonwealth Government is putting in place the right policies, at the right time, to unlock the north’s vast potential’. We note that the White Paper acknowledged that this ‘vast potential’ yet to be unlocked in the north lay in existing industries and enterprises as well as in new opportunities. The Terms of Reference for this Senate Select Committee appear to reaffirm that view. Raw sugar is one of Australia's most valuable agricultural exports earning about $2 billion annually. It is the principal product of an industry sector that supports 23,000 jobs, sustains numerous regional Queensland communities, and generates significant economic activity. The total direct and indirect economic contribution of the milling sector of this industry is estimated at $4billion annually. Wilmar is Australia’s largest sugar milling company, accounting for about 65% of raw sugar production. Wilmar entered the Australian sugar industry in 2010 with plans to improve the outcome for Australian stakeholders by leveraging its strong financial base, extensive global networks, and experience and skill as one of the world’s leading sugar traders. Federal and Queensland government commitment to the earlier 2006 de-regulation of the sugar industry had given Wilmar confidence that Australia would pursue policies and actions to encourage and reward investment, support growth and promote innovation and international competitiveness for the North Queensland industry. Unfortunately, the White Paper’s aspirations have not been realized – at least not in the sugar industry. We are unable to identify any Northern Australia Agenda policy of a federal government since 2015 that has contributed to improved outcomes for the sugar industry envisaged by the 2015 White Paper On the contrary, Wilmar’s billion dollar investment has been seriously impaired by the Federal Government’s imposition of a mandatory code of conduct on the industry in 2017, duplicating and underpinning Queensland legislation, and increasing uncertainty, risk and cost for the industry. Rather than being stimulated, investment in growth and innovation in the industry has been stifled by the policy signals from Canberra. Untimely, unnecessary and unwelcome government intervention has come at the same time that the industry faces a major downturn in the global sugar price, rising production input costs, and increasing regional competition for traditional export markets. The result is a significant opportunity cost to all in the industry (especially investors), the economy and dozens of North Queensland regional communities. However, rather that focus on opportunity lost since 2015 because of government intervention, our submission focuses on what we suggest are tangible policy opportunities for the Federal Government to return to the aspirational path of the White Paper and the Northern Australia Agenda, creating meaningful and positive outcomes for the economy, environment and communities of North Queensland – outcomes with flow on benefit to the nation. We believe that the Government would likely achieve more by working with industry to provide the incentives that will unlock potential and improve economic and social outcomes rather than binding it in the red tape of regulation. Page 5 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy We have no doubt that returning the sugar industry to de-regulation would allow all sectors to effectively respond to the considerable commercial challenges facing them, and build resilience for the future. Indeed, we believe that industry performance, viability and triple bottom line contribution would improve markedly with constructive national policy on: sugar industry de-regulation; foreign investment; energy; coastal shipping; biofuels; water resources; and workforce planning and development. We submit that the Federal Government would more effectively contribute to outcomes for the sugar industry and North Queensland consistent with the Northern Australia Agenda and the 2015 White Paper if it: 1. Repealed the Sugar Industry Code of Conduct; 2. Declared Queensland’s 2015 Grower Choice legislative amendments inconsistent with Competition Principles and a breach of Australia’s treaties with key trading partners; 3. Adopted long-term incentives for generation of renewable, base load, dispatchable energy; 4. Reduced excise on Bioethanol; 5. Encouraged use of biofuels in motor vehicles; 6. Drove down domestic gas prices and assured supplies for large industrial users; 7. Reformed coastal shipping regulations to improve competitiveness and remove barriers to specialist foreign vessels; 8. Provided skilled workforce programs for North Queensland that addressed the unique challenges of remote regions with diverse industry structures and fluid job markets. Page 6 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 3. Facilitation of private investment In 2010, Wilmar invested $1.75 billion to acquire Sucrogen Limited from CSR Limited. The following year, we invested $120 million more to purchase the Proserpine co-operative mill out of administration. Since 2011, Wilmar has spent a further billion dollars in capital and maintenance at our mills to achieve our desired standards of reliability, performance and safety. However, following Queensland re-regulation in 2015, and then federal intervention in 2017, we have not invested in our Queensland sugar milling operations in a meaningful way beyond maintenance, repair and replacement. There is no appetite for growth or expansion of our Australian sugar business and we cannot identify any federal policy since 2015 – whether under the Northern Australia Agenda or otherwise – that has given Wilmar incentive to increase its investment in Australia. Wilmar is not alone in feeling the impact of government intervention in the sugar industry. The milling sector includes investors from China, Thailand, Belgium and Germany, and it has been united in condemning reregulation and warning of its negative effect on investment confidence. Private sector investment is attracted by the prospect of a commercial rate of return on investment, opportunity to grow, a low level of sovereign risk and a stable operating environment. Since 2015, the Australian sugar industry has offered investors none of these attractions. Queensland Grower Choice legislation, and the federal Sugar Industry Code of Conduct stripped investors of the ownership rights over a large portion of their product and opened mill non-sugar revenue to potential claim by cane growers supplying their mills. The resultant damage can be seen in recent industry experience: a number of milling companies in Queensland have relied on millions of dollars in federal and/or State taxpayer-funded support to ensure continued operations. Queensland’s second largest milling company – grower owned for a century – struggled under heavy debt created by its own shareholders. Unable to attract an investor, the cooperative owners were ultimately faced with a choice of selling majority control in exchange for a capital injection, or receivership. However, we believe the Federal Government can still revitalise the sugar industry if it takes measures consistent with the White Paper and the Agenda. This would require government to minimise intervention and focus on fostering growth and innovation. Immediately the government should take steps to: A. repeal the 2017 mandatory Sugar Industry Code of Conduct; and B. Comply with to an longstanding agreement with the States on Competition Principles by referring Queensland Grower Choice legislation to the Competition Council for advice on consistency with Competition Principles and whether ‘Authorisation’ under the Competition and Consumer Act is appropriate; This would restore investor confidence by: restoring the integrity of Australia’s Competition Principles; returning lawful ownership to millers for what they produce; reassuring investors now fearful of kneejerk government intervention in commerce; and clearing the way for existing investors such as Wilmar to achieve the growth in the business that they reasonably expected when they entered a deregulated sugar industry after 2006. Page 7 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 4. Economic and social benefit delivered Wilmar contributes significantly to the economic, social and environmental health of North Queensland, generating an estimated $1.2 billion annually for the economy by: producing 65% of Australia’s exported raw sugar; paying growers $600 - $700 million annually for cane; operating two sugar refineries (in joint venture with Mackay Sugar Limited); growing 500,000 of sugarcane (7,000 hectares under cane); generating and exporting to the national grid annually enough renewable energy to power 80,000 homes; producing enough Bioethanol annually to power 400,000 cars on E10; employing more than 2,000 people; and consistently ranking among NQ’s top employers of tradespeople and apprentices. However, this contribution might have been even greater had governments not intervened to re-regulate the sugar industry. Re-regulation in 2015 and 2017 damaged investment confidence in the industry, arresting growth and creating cost and risk. This has been to the disadvantage of investors such as Wilmar, as well as the economy, environment and communities of North Queensland. The Queensland Productivity Commission and the federal Productivity Commission both warned of the deleterious effect of government intervention in industry striving to compete in a global market. These expert economic advisory agencies counselled in favour of de-regulation. An immediate return to de-regulation is the only way to restore the confidence and momentum witnessed between 2006 and 2015, and deliver North Queensland the economic and social benefit industry that investors such as Wilmar envisaged when they entered the industry. As Australia’s largest milling company, Wilmar can play a lead role in rebuilding momentum in a de-regulated operating environment. Wilmar has the financial capacity, infrastructure, workforce and skill to expand its triple bottom line contribution through increased: Sugar cane production Raw sugar production, storage, marketing and export Molasses and co-product production and distribution Renewable energy generation Bioethanol and co-product production Fertiliser and stock feed We have already advised the Queensland Government that, should the industry be again de-regulated, we would revisit a number of job creating, economy boosting and export enhancing projects that we shelved following the introduction of 2015 Grower Choice legislation. Projects under active consideration at the time included construction of an $80 million sugar storage facility, and a $300m investment in expanded cogeneration at the Wilmar mills. The return of investment confidence should flow directly and indirectly to North Queensland communities with: job creation; job security; increased commercial activity; assured regional infrastructure, facilities and services; and strong property and asset values. Page 8 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 5. Measures that capture the full value of existing industries Despite lack of progress with the Northern Australia Agenda since 2015, the Federal Government still has an opportunity to capture the full POTENTIAL value of the existing North Queensland sugar industry by removing regulatory barriers to growth, disincentives to investment, and instead providing the infrastructure to support growth. Existing Queensland sugar industry leaders, such as Wilmar, with sunk investment and ready access to capital have incentive and the capacity to drive their businesses forward without taxpayer subsidy. Incentivising the existing sugar industry to grow should be a more efficient use of resources than pursuing and then subsidising high risk startups and technologies that are yet to prove commercially viable. Existing industry should also produce outcomes sooner than greenfield projects. However, unless and until the mandatory Sugar Industry Code of Conduct and anticompetitive Queensland Grower Choice legislation are repealed, we see little prospect of the Queensland sugar industry achieving its full potential. In the meantime, there is risk that ad hoc government funding of ventures in the name of innovation and diversity could actually harm the industry, the economy and communities. A number of recent proposals for government funding involved projects whose success relied entirely on use of the sugar cane currently supplying existing sugar mills. There is no net gain likely for the economy or community in putting one stable and secure business out of operation in order to open another risky one in its place. We submit that the Government should look to achieve economic and social benefit for North Queensland by encouraging and facilitating the growth to full potential of the existing sugar industry as well as looking to attract new industry. Other policy measures that we believe would stimulate activity and restore investor confidence include: Energy Wilmar is a leading generator of renewable energy in Australia: Each year we convert the energy in over 5 million tonnes of biomass (in the form of bagasse) into renewable energy Our eight Queensland sugar mills have a total generation capacity of 600,000 megawatt hours We export over 350,000 megawatt hours of base load dispatchable electricity to the national power grid each year The electricity we export is enough to supply more than 80,000 Australian homes Our mills generate almost 15% of Queensland’s total renewable energy Our Pioneer Mill near Ayr is Australia’s largest generator running only on biomass Despite generating base load, dispatchable and renewable energy, sugar mills have been marginalised in the energy debate and policy considerations. In the absence of a cohesive national energy policy encompassing renewable energy, Wilmar and other millers face declining revenue and increased price volatility for the energy we export to the grid. We also fear the increasing risk of ad hoc isolation from a grid saturated at times with cheap, daylight hour solar energy. This environment creates uncertainty about further investment in energy generation. The Federal Government needs a cohesive national energy policy that addresses challenges in generation, distribution and pricing. The policy should clearly identify the role for, and value of, renewable energy and provide incentive for investment in base load, dispatchable generation. Page 9 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy Gas prices North Queensland industry does not necessarily exist in isolation from the rest of Australia. Where there is supply chain or downstream production in other states, there can be implications for the profitability of primary operations in the north. Gas prices in southern states are an example of downstream impact on Wilmar sugar milling in North Queensland. Wilmar’s joint venture, Sugar Australia, refines Queensland raw sugar at its Yarraville refinery in Victoria. Wilmar’s companies outside Queensland consume more than a million gigajoules of gas annually. Gas is the most expensive single input cost for the Yarraville refinery. In 2017/18, the price of gas in Victoria rose by almost 100%. As well, only one supplier offered gas to the market for much of the year. The result was a significant hit to Sugar Australia’s bottom line. Until the Federal Government has an effective policy that assures domestic supply of affordable gas, especially for heavy industrial users with downstream obligations and impacts, Wilmar’s companies will be at commercial disadvantage. Biofuel Wilmar is one of the three major Australian producers of Bioethanol: We have been producing ethanol since 1925 Wilmar Bioethanol (ethyl alcohol) is derived from molasses produced during the sugar making process We produce up to 60 megalitres of ethanol annually We produce enough Bioethanol to power 400,000 cars a year on E10 On a simple litre-per-litre basis, our ethanol carbon intensity is about 0.65 kg of CO2 compared to 2.5kg for petrol Wilmar Bioethanol has less than half the carbon footprint of petrol on an energy equivalent basis Our ethanol can offset more than 110,000 tonnes of CO2 each year, equal to taking about 28,000 cars off the road We reuse the waste product from the ethanol fermentation process, Bio Dunder®, as a stockfeed and fertiliser for sugarcane fields. We produce around 230 megalitres of Bio Dunder every year Excise on bioethanol (currently about 11 cents a litre) has eroded margins and become a disincentive to production of this renewable fuel. Given that blended biofuels contribute to reduction in harmful motor vehicle emissions, and could potentially extend Australia’s fuel reserves during security emergencies and global oil disruptions, it should be in the national interest for the Federal Government to ensure the viability and growth of a domestic biofuel industry. Queensland and New South Wales have already adopted biofuel mandates. However, the Federal Government has not pursued any national policy that encourages the biofuel industry. The Federal Government should encourage growth of biofuel industries in Australia to reduce harmful motor vehicle emissions, and reduce our reliance on imported fuels and ageing fossil fuel refineries. Page 10 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy Coastal shipping regulations Wilmar International owns a fleet of vessels which cater primarily to in-house needs. The shipping operation is managed by a subsidiary, Raffles Shipping Corporation Pte Ltd. MV Pioneer is a specialised food-grade bulk refined sugar vessel - one of only three in the world. Pioneer has a cargo capacity of 20,000 tonnes and has been designed to load and transport refined sugar in bulk to Australian and overseas destinations and discharge it in bulk at 500 tonnes per hour or in bags at 3,000 tonnes per day. The vessel operates BIBO where refined sugar is loaded into the ship as a Bulk-In process and later unloaded either in bulk (Bulk-Out) or in bags (Bag-Out). Sugar Australia ships approximately 235-260,000 tonnes of bulk raw sugar annually from Queensland to its refinery at Yarraville in Melbourne. Raw sugar is an internationally traded commodity and Sugar Australia is reliant on access to competitive coastal freight rates for its business success. Wilmar ships 40-50,000 tonnes of sugar cane molasses annually from Queensland to fermentation and animal feed markets in Victoria. Due to the distance between the demand (in Victoria) and the source (major sugar cane producing areas in Queensland), coastal sea-freight is the only viable transport method for large quantities of bulk molasses to this market. Wilmar also moves 20,000mt of bioethanol from Mackay to Melbourne and Kwinana annually. Ethanol (non-fuel grade) is an internationally traded commodity chemical. Major trading nations are the USA, Brazil, Pakistan and Thailand. Wilmar has, on occasion, imported ethanol to Melbourne but currently uses bulk chemical tankers operating under Temporary Licences. As this ethanol product has Kosher and British Pharmacopeia status, the product requires specialised handling and shipping. There are no suitable GL vessels currently on the Australian register. We endorse the 28 March 2017 of the Productivity Commission report Regulation in Agriculture and particularly the Commission Recommendation 9.5: As a matter of priority, the Australian Government should amend coastal shipping laws to substantially reduce barriers to entry for foreign vessels, to improve competition in coastal shipping services. Wilmar supports coastal shipping reform in the context of potential to assist Australia’s export trade as well as its obvious benefit to competition within our borders. Page 11 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 6. Measures taken to develop a skilled workforce North Queensland presents a workforce challenge to the sugar industry. Operating heavy industry in the regional centres of the north means constant effort and expense to maintain the skilled and unskilled workforce required. Adding to the challenge is the ebb and flow of opportunity and demand for jobs in the primary industries of the north – mining, agriculture, grazing, horticulture, commercial fishing and aquaculture – as well as public sector, transport, defence, energy, utilities and natural resources. Competition for skills among employers from time to time produces remuneration creep, sudden skill shortages and social disruption (through FIFO absence). Wilmar employs more than 2,000 people in Queensland – a mix of professionals, graduates, trades and nonskilled (including seasonal). We are one of the largest employers of tradespeople and apprentices in North Queensland. Each year we recruit 30-35 apprentices and at any time we have about 120 working in our eight sugar mills. Recruitment, retention and reward is a constant challenge for Wilmar. Federal governments have, in the past, encouraged workers into the north with taxation concessions, special payments, travel assistance and visa concessions. There have also been significant steps forward in recognition of trade qualifications across state borders. Wilmar urges Federal Government support for programs that encourage trade qualifications for school leavers – particularly females. We recommend the Federal Government work with Queensland education agencies (especially TAFE) and industries such as the sugar industry to grow the job pool and the skilled workforce in the north, ensuring the training and development infrastructure and services that will support all industries. . Page 12 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy 7. Emerging national and international trends impacting Global sugar The sugar industry has always been subject to a volatile global market. Weather, geo/political tensions, domestic politics, social trends and commercial pressure are all factors at play in an industry competing from and across continents and hemispheres. Currently, global sugar prices are low because India has delivered stockpiles of subsidised raw sugar to the market creating oversupply. Australia has taken this matter to the WTO with the support of a number of other sugar producing countries. However, there is little chance that Australia can insulate itself from global forces in the market in which it trades. Our best chance of success in the global sugar market is competitiveness – product quality, price and reliability. The Queensland sugar industry is vital to the future prosperity and sustainability of Australia’s north and the Federal Government’s policies in relation to this industry must be forward looking and constructive. The unanimous conclusion of the industry and governments in 2004 was that the future depended on competitiveness – deregulation was the key. De-regulation of the Queensland sugar industry is vital to the prosperity of the industry, its contribution to the economy, environment and community, as well as its growth and diversification to achieve full potential. Biofuel Europe, the United States of America and many other developed economies have embraced biofuel as a means of diversifying agricultural output with renewable energy, extending fuel reserves, and reducing harmful motor vehicle emissions. Biofuel offers Australia significant benefit, yet we are without national policy setting. This despite: a majority of passenger motor vehicles on Australian roads being compatible with a blended biofuel; two Australian states already enforcing a biofuel mandate; biofuel contributing to a healthier environment through lower carbon emissions and reduced tailpipe particulate emissions; biofuel made from molasses – a product of the sugar milling process – contributing to the sustainability of the Queensland sugar industry; and biofuel providing the means of extending national fuel reserves. Wilmar urges the Federal government to adopt a national policy on biofuel and to support programs to increase consumption of biofuel in motor vehicles. Page 13 of 14 Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda Submission 53 Submission to Senate Select Committee on Northern Australia Policy Foreign investment Australian governments have encouraged overseas investment in Australia for decades. In most cases the weight of capital that can be brought to bear exceeds the capacity of domestic Australian investors. There has also been the opportunity to secure export markets and introduce new skills through the participation of overseas investors. However, often Australia presents opportunities to foreign investors at the same time that those investors see certain sections of society and some political opinion leaders attacking and besmirching multinational investment as undesirable. This contradiction of messages can create uncertainty and discomfort for potential and existing overseas investors. The Federal Government has been encouraged – including by officials of its own Foreign Investment Review Board – to state clearly Australia’s position on foreign investment. We would welcome such a statement. We would also welcome a review of FIRB approval thresholds for agricultural land and FIRB transaction costs which currently create impracticalities, barriers to entry and commercial disincentives for relatively small farm acquisitions or the provision of loans by Wilmar to growers to expand their farming operations. We support the work of FIRB and encourage the Federal Government to ensure that the policy on foreign investment is clear and unequivocal. We also recommend a review of the threshold levels for FIRB approval in relation to the purchase of agricultural land and the fee structure for FIRB applications. Page 14 of 14
