A SENIOR Coalition senator has hit out at comments former prime minister John Howard made about foreign investment to a private forum hosted by Westpac.
In the comments, reported in the Australian Financial Review on Tuesday, Mr Howard compared the corporate Japanese investment in Australia of the 1970s and 1980s to the current rise of Chinese state-owned foreign investment.
But Liberal Senator Bill Heffernan, who previously served as Parliamentary Secretary to the Cabinet under Mr Howard, did not agree with the comparison.
He said the rise in investment from Japan during the 70s and 80s "wasn't the government, and they (Japanese companies) were part of the market", referring to evidence a Senate inquiry he has been chairing which heard that there has been a rise in recent years of state-owned or backed Chinese investment companies buying up land and Australian business interests.
The committee has also heard evidence from the tax office that overseas firms investing in agriculture land to produce food or fibre under the guise of "humanitarian aid" did not need to pay tax - evidence which Senator Heffernan meant such companies did not need to compete in the market, or to pay tax on such agricultural production.
Head of the Foreign Investment Review Board Brian Wilson also told the committee that while the board assessed proposals under five broad areas, including the impact on the economy, community and national security, there was no specific definition of what was, or was not, in national interest.
Senator Heffernan said Mr Wilson's evidence showed FIRB decisions were based on the potential political ramifications for the government of the day, rather than the actual risk to Australia's national interest.
He said the test was based on "a few phone calls" to Treasury officials and the Treasurer's office and even if a foreign company did not report that it was backed by another country, there was no penalty for not doing so - meaning some state-owned companies could fly under the radar of the board.
Senator Heffernan said there needed to be a major overhaul of the current laws surrounding foreign takeovers and investments, which were out of date, having been enacted in a completely different market in the 1970s.
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