The West Australian, July 21, 2016
Key concessions granted by the Liberal Party to the Nationals have been blasted as unnecessary by a major review of regulation on agriculture.
In a report to be released today, the Productivity Commission says lower thresholds for mandatory review of foreign investment will deter overseas buyers.
And the commission has also effectively warned against the Turnbull Government’s proposed “effects test” to protect small business, saying existing regulation and oversight is adequate in dealing with concerns about abuse of market power.
“The current focus on the potential for the misuse of market power by wholesale merchants and supermarkets engaging with farmers is not well supported by evidence,” the commission says.
The effects test was shelved under Tony Abbott but the Nationals ensured it was embraced as coalition policy when Malcolm Turnbull became Prime Minister. The Nationals secured the small business portfolio in Monday’s reshuffle.
Similarly, the lowering of thresholds triggering scrutiny by the Foreign Investment Review Board — to $55 million for agribusiness and $15 million for agricultural land — was introduced at the behest of the Nationals last year.
“There is a risk that this will ultimately deter foreign investment in the sector without offsetting public benefits, particularly as other measures (such as the agricultural land register) are in place to increase transparency and public confidence about foreign investment in Australian agriculture,” the commission says.
It recommends the screening threshold for agricultural land and agribusiness revert to $252 million, where it was before 2015, in line with thresholds for business acquisitions and developed commercial land for foreign investors.
The Productivity Commission’s draft report also commends the Barnett Government’s proposed abolition of the so-called “Spud Cop”, saying the Potato Marketing Corporation “no longer serves the interests of potato consumers in Western Australia”.
It is illegal to sell fresh potatoes grown in WA without a licence from the PMC.
“The regulation of Western Australia’s potato industry had its origins in concerns about reliable food supplies during World War II,” the commission says.
“The arrangements are out-of-date and have resulted in less variety and higher potato prices for Western Australian consumers.
“The planned deregulation of the potato industry in Western Australia will improve the responsiveness of the industry to changing consumer preferences and reduce the cost of potatoes in Western Australia.”