The new Future Made in Australia Act – incoming changes to Australia's foreign investment regime
01 May 2024
01 May 2024
The Federal Government has today signalled significant incoming changes to Australia's foreign investment regime.
The new Future Made in Australia Act (Act), announced on 11 April 2024 by the Federal Government,1 will come into effect on 1 July 2024. This Act will introduce a number of measures designed to encourage "low-risk" non-sensitive foreign investments and to ensure more effective screening and monitoring of sensitive foreign investments (e.g. investments in critical infrastructure, critical minerals and critical technology and investments that involve sensitive data sets or are in close proximity to national defence sites or sensitive Australian Government facilities).
The Treasury has today released an updated foreign investment policy (Policy) which outlines in further detail, information about the sectors which will attract more enhanced and effective screening, as well as the new fast-tracked process for low-risk investors.2
These reforms have been announced today in light of the upcoming May 14 Federal Budget, and are focussed on ensuring that Australia remains an attractive location for the deployment of foreign private capital whilst also balancing national and economic security concerns.
Investment will be particularly encouraged in emerging industries such as clean energy and industrials in light of the global energy transition as well as professional services, manufacturing, mining of non-critical minerals and commercial and new residential real estate.
The key reforms under the Act are as follows:
As a result of the reforms, it is anticipated that "low-risk" and "repeat" foreign investors will enjoy significant time savings in their FIRB applications.
Conversely, foreign investments in sensitive sectors which may pose risks to Australia's national security will be carefully considered and detailed as regulatory intervention will be focussed on these sectors.
While the Policy provides a broad overview of the Federal Government's strategic priorities, details of how such changes will be implemented in practice are not yet known. The Policy also does not comment on the expected implications of such changes, if any, on current FIRB applications or FIRB applications to be submitted prior to 1 July 2024. It will therefore be important for foreign investors currently contemplating or planning to submit a FIRB application to be familiar with the existing foreign investment regime and stay alert to further updates to the changes which may arise from implementation of the Act.
Authors: Bruce MacDonald, Partner; Anita Choi, Partner; Will Mason, Senior Associate and Jin Yoo, Lawyer.
1. A future made in Australia | Prime Minister of Australia (pm.gov.au).
2. Australia’s Foreign Investment Policy.
3. Budget 2024: Labor’s reforms will de-risk foreign investment (afr.com)
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.