Australia’s reasons for “sensitive” foreign investor approval has been put on hold

Prime Minister Anthony Albanese triggered the federal election on Friday, March 28. Image: Jason Edwards / Newswire

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Australia has approved a “large or sensitive” foreign investment proposal as commercial and residential real estate – led by the United States.

The timing of holding – with the announcement of extensive tariff measures against other parts of the world (including Australia) the other day – was purely accidental.

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FIRB approved the commercial investment proposal 24-25 in the first quarter. Source: FIRB.

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Data from the latest FIRB quarterly report. Source: FIRB.

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The Foreign Investment Review Committee has recommended it is working under the “conservation period” rules, and the House was dissolved before the May 3 federal election.

“The caretaker convention will apply until the election results are clear, or, if the government changes, until the new government is in place,” the FIRB statement said.

Americans constitute the largest foreigner applying for the Foreign Investment Review Board to approve a commercial investment proposal – by far the largest part is commercial real estate.

Official data show that the U.S. recommendations dominate FIRB approvals, while the estimated value for 2023-24 is $65.7 billion, worth $65.7 billion, three times the closest Japanese applicant this year.

Since January, the law firm has been advising clients since closing with Melbourne-based Minterellison partner Alberto Colla, noting that “low value, regular applications continue to be approved during caretakers, but once the election is called, the approval of more complex applications can be delayed by 1-2 months.”

The Americans are by far the largest business investor FIRB deal, including applications such as the 211,664-hectare Bellevue station purchased by U.S. buyers near the Mitchell River near Chiillagoe, reportedly $40 million.

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“The caregiver model has a specific impact on the purpose of the FIRB because once the election is called, the FIRB application will not be processed until the outcome of the election is known. The care period is usually four to six weeks.”

But he warned: “If the election results are close and there is no obvious majority, or if it is delayed when counting and announcing the results, the caretaker period can be extended.”

Australia doubled its U.S. commercial purchases compared to 2022-23, when it received $34.7B approval.

Given that the first quarter from July to September alone, these figures could smash the current fiscal year.

The Foreign Investment Review Board said that “certain conventions apply to decision-making” but are specifically used for any major foreign investment advice.

FIRB’s approved commercial investment proposal data. Source: FIRB.

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“Most foreign investment proposals are considered part of ongoing government work and are not affected by the caretaker conventions. However, some large or sensitive recommendations may be considered major policy decisions and managed in accordance with the conventions.”

“This is determined on a case-by-case basis,” the statement said.

“If you have a significant or sensitive suggestion that has not been submitted yet, please contact the Treasury to discuss it.” “If your proposal has been reviewed, the Treasury will contact you if the precautionary period affects your case.”

The five-week holding comes after the period of caretaker triggered on March 28, when Prime Minister Anthony Albanese asked the Governor to call the general election.

Of the 377 business investment proposals approved in the first quarter of 2024-25, 143 are from Americans, and their value accounts for almost half of the total approvals $22.9B

Total $46.6B.

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