An opaque and vaguely defined standard may hold the key to national economic recovery in the post COVID-19 era. The problem is that no one knows the exact contours of a ‘gatekeeper’ test that will enable foreign investors to inject much-needed capital into the Australian economy. Traditionally, the Treasurer sought advice from the Foreign Investment Review Board (FIRB), a curious non-statutory advisory body responsible for generating a recommendation for the Treasurer based on the operative factors under the national interest. The final word rests with the Treasurer.
When the Foreign Acquisitions and Takeovers Act 1975 (Cth) was being debated in the Parliament, it was suggested that the ‘national interest’ criterion should be assessed by reference to a variety of operative factors such as net economic benefits to Australia to justify the change in foreign control, whether the foreign investor was expected to follow practices consistent with Australian expectations and whether the proposal would be consistent with the Government’s policy objectives. In assessing these matters, it was suggested during parliamentary debates that the Government would look at factors such as Australian participation in ownership, control, and management as well as the interests of employees, shareholders, and creditors.