NICK VARVARIS:
Good morning and thank you all for being here today. It is a great pleasure to have the Prime Minister and the Treasurer here in Kogarah, one of the great suburbs in the electorate of Barton. I would like to hand over to the Prime Minister.
PRIME MINISTER:
It is good to be here in Kogarah. It's great to be in the electorate of Barton, it’s great to be in the heartland of our country. This is the heart of Sydney, the heart of multicultural Sydney and it's good to be here with the Treasurer.
Obviously, part of the Australian dream is owning your own home and we certainly want the dream to continue.
Joe's been a home buyer, Margie and myself have been home buyers, there are millions of Australians who want to realise their dream of owning their own home. It's not easy. The job of government is to try to ensure that there are no unnecessary obstacles put in people's way and unfortunately the rules against foreigners purchasing existing residential land simply weren't enforced by the former Government. Under the former Government, for six years there was not a single legal case against a foreigner buying a home. There was not a single divestment order made for a foreigner buying a home.
So, what we're on about is ensuring that the long-standing rules are enforced and we're on about ensuring that there is a proper Foreign Investment Review Board regime for policing the rules and that's what we are doing today, the Treasurer and I. We are releasing a discussion paper so there can be four weeks of community debate before the Government finalises our approach on this subject but we do want the rules enforced, we do want Australians to be operating on a level playing field and we do want to ensure that the people who are applying to the Foreign Investment Review Board are actually funding its operation.
So, there will be a system of application fees for the first time for the Foreign Investment Review Board. It's comparable to the system which has long operated in New Zealand and it’s much more modest than the fees that operate in places like Hong Kong and Singapore because, while we do want the rules to work, we also are open to foreign investment and we welcome foreign investment but it's got to be foreign investment which is in our national interest.
Yes, foreign investment has been very, very good for Australia but it's got to be the right foreign investment under the right circumstances, properly policed and it can't disadvantage Australian home buyers.
So, I'm really pleased to be here with the Treasurer who might like to add to these remarks.
TREASURER:
Thanks very much, Prime Minister. We welcome foreign investment. Australia needs foreign investment but we also need to ensure that people have confidence in the foreign investment regime. As the Prime Minister said, it has not been properly enforced by the previous Government. As a result of that, today for the first time we are proposing a range of civil penalties and fees associated with foreign investment in Australia.
For any foreign investor that wants to buy a residential property under a million dollars there will be a $5,000 application fee. Over a million dollars, it will be $10,000 for every extra million dollars in the purchase price.
Secondly, there will be a new register set up so that we know how many foreign residential and agricultural property owners are in Australia, who they are, which is a very important form of reassurance to the Australian people. If anyone does break the law then we can fine them up to 25 per cent of the value of the property as well as forcing them to sell the property.
These integrity measures are absolutely essential for reassuring Australians that when they go to an auction they are on a level playing field, that they are not being taken advantage of.
I emphasise again, we welcome foreign investment, we need foreign investment but it also needs to be a foreign investment regime that has integrity and reassures Australians that they're not being taken advantage of.
PRIME MINISTER:
Ok, do we have any questions?
QUESTION:
Do you also need to consider negative gearing if you want to give people who are not investors a go, particularly here in Sydney, here's a house, a million dollars, how does somebody get into the market when investors have got the advantage?
PRIME MINISTER:
Look, the negative gearing rules have been in place for a long time. Obviously, they do have an impact on the housing market but we are certainly not proposing any change. What we want to do is to ensure that the foreign investment rules are properly enforced and that's what we're here to talk about today.
QUESTION:
When you look at, though, the way that auctions are conducted, the money that particularly foreign investors spend on homes, are they actually going to blink at a $10,000 application fee?
PRIME MINISTER:
The idea is not to deter foreign investment, the idea is to ensure that the rules are enforced. That's the idea, to ensure that the rules are enforced and properly policed and these application fees, which are comparable to the fees in New Zealand, much, much less than the additional taxes that foreigners are required to pay in places like Hong Kong and Singapore, these are designed to give us the resources we need to enforce the rules.
QUESTION:
But it doesn't seem as though the application fee is going to make a difference.
PRIME MINISTER:
The application fee is not there to deter people, it's there to ensure that foreigners are paying their way. That's what it's there to do.
QUESTION:
If it's not there to deter people, how is this going to make houses cheaper?
PRIME MINISTER:
What it's going to do is ensure the rules are enforced. That's what it's there to do. The point I stress is that under the former Government for six years, for six long years, the rules were a dead letter because there was not one legal action commenced during the life of the former Government. There was not one divestment order made so the rules were completely flouted in the period of the former Government. We're here to ensure that the rules are enforced and there is an adequate and ample enforcement mechanism to make that happen.
QUESTION:
Which rules specifically though? What rules need to be enforced so that first home buyers can actually compete at auctions?
PRIME MINISTER:
The rule is that if you are a foreigner you are not allowed to buy established existing residential property. We know that those rules haven't been enforced in the past and that does have an impact. Exactly how much impact we don't know but certainly we are here to say that the rules will be taken seriously, there will be an application fee – a significant application fee – to ensure that the machinery is in place to police the rules and make sure that everyone gets a fair go.
QUESTION:
Prime Minister, is this consistent with your message of cutting red tape and keeping Australia open for business?
PRIME MINISTER:
Well, yes, it is. It is absolutely consistent with our message and we were very open with our free trade agreement negotiation partners that these were the sorts of changes that we had taken to the people at the election and these were the sorts of changes that we were determined to make.
QUESTION:
Was everyone within the finance group happy about this because it sounds like you're going a bit further than was recommended originally by Kelly O'Dwyer and her committee?
PRIME MINISTER:
That was a very good report from Kelly O'Dwyer and I pay tribute to Kelly and the committee inquiry. It was an excellent inquiry. What happened was that we had a Cabinet consideration of this and, as you'd expect, the Treasurer then went to the backbench committee and the application fees that we are proposing in this discussion paper – because it is a discussion paper, it's a consultation paper – the application fees that we are proposing are the fees that were recommended by the backbench committee.
QUESTION:
Prime Minister, is Australia going to be sending more troops to Iraq?
PRIME MINISTER:
I'm happy to get to other issues but if there are any more questions on this issue we'll deal with them and then get on to other subjects.
QUESTION:
Prime Minister, if you're concerned about housing affordability for young people, are you also prepared to look at other measures like whether or not millionaires should be on the pension?
PRIME MINISTER:
I think if, I may say so, you're inviting me to speculate on a whole lot of other areas and I want to focus very much on today's announcement. We are determined to enforce the rules and we are going to put a proper enforcement regime in place and it will be funded by these new application fees that are flagged in the discussion paper that we've got.
People can speculate about all sorts of other things. The Government has no plans to make any other changes other than those that are already out there and announced.
QUESTION:
Is this actually going to make it easier for first home buyers?
PRIME MINISTER:
It will mean that foreigners who aren't playing by the rules won't be there in the system, that the only foreigners that will be in the system, competing, are those who are playing by the rules, not those who are playing outside the rules.
TREASURER:
Just to add, if a local is bidding against a foreigner for a new property, then the foreigner has to pay $5,000 more than the local because they have to go through the application fee. Now, for some people that is a significant amount, for others it isn't, but this is the cost of having integrity associated would the foreign investment regime.
We're also announcing that applications to buy businesses worth more than a billion dollars will require an application fee of around $100,000. Currently, we're getting in excess of 30 of those applications on average a year. They are sapping a lot of resources from Government and no Australian is going to pay these fees.
No Australian is going to pay these fees. These are people that want to buy real estate in Australia that do not live permanently in Australia.
QUESTION:
This seems like better news for investors as opposed to young people who are looking to get into the housing market.
PRIME MINISTER:
Look, it all helps. It all helps. I'm not saying that there is any magic wand here. What I'm saying is that bit by bit this Government is determined to ensure that the aspirational people of our country get the fairest possible go.
QUESTION:
Where will the fee go and also, I guess, on top of where the fee goes, have you got estimates for how much you expect to bring in?
TREASURER:
The fee will come into the Treasury. The Treasury runs the Foreign Investment Review Board. We are setting up the register in the Australian Taxation Office, there will be a lot of data matching, it will also be the case that we will obviously have a compliance regime associated with it and whatever resources are necessary will come from this. The proposed fees will raise in excess of $200 million a year but obviously that depends on demand. At the moment, we simply do not have enough data and that's because no-one has taken foreign investment regimes seriously in the past. Clearly, we are living in a different environment at the moment so we need to significantly beef up the resources of the Foreign Investment Review Board.
QUESTION:
Am I right in understanding that the $200 million a year will be in the forward estimates for the Budget in time?
TREASURER:
Yes. If a final decision is made, yes.
QUESTION:
Has there been any prosecutions under your leadership? You said there's been nothing under the previous Government?
TREASURER:
There is one case that is very definitely on our radar at the moment. We have provided the owner with natural justice as appropriate. I expect to have more to say about that in the next few days.
QUESTION:
Is this not just a way to milk foreign investors more?
TREASURER:
No, because at the moment they don't pay anything when they lodge applications. They get a free service from the Australian taxpayer. That is unacceptable and obviously transactions now are far more complicated. Money is coming from the four corners of the earth. We welcome that but also it raises significant issues ranging from national security to potential criminal activity, money laundering and a range of other things so our actual enforcement of the foreign investment regime is costing far more, far more, than ever expected. Australians are paying for that and what we're saying is enough, those people that get the benefit of putting foreign investment into Australia should also pay for that service.
QUESTION:
Why jump on a plane and come to Sydney to announce it during a sitting week rather than do so in Canberra?
PRIME MINISTER:
Because Sydney is the epicentre, if you like, of these sorts of real estate pressures and I think it's very important that we are here – where the problem is, where the issue is – to make this announcement.
QUESTION:
Just on that, though, there have been nine press conferences that you've conducted without the Canberra press gallery, you know, people that are probably better trained to actually scrutinise these announcements...
PRIME MINISTER:
I think we've got the ultimate insider here in Peter Van Onselen, so look, I think we're now getting into Canberra naval gazing so are there any other questions.
QUESTION:
Yes Prime Minister, is Australia going to be sending more troops to Iraq?
PRIME MINISTER:
It's been well known for some time that we have been talking to our allies, we've been talking to the Iraqis about what more we could do to assist the Iraqis to reclaim their own country. It's not up to Australia, America or any other outsider to reclaim Iraq for the Iraqis but it is important that the death cult be defeated and, as you know, Australia has been involved quite significantly for quite a few months now in the campaign to disrupt, degrade and ultimately destroy the ISIL or Daesh death cult which has promoted this new dark age over so much of the Middle East. So, we are talking to our friends and allies – obviously that includes the New Zealanders – about what more we can do to help the Iraqi security forces and I'll have more to say in the next day or so.
QUESTION:
Prime Minister, it's been revealed at estimates today that the Department of Defence, that you had a dinner on 25 November which included the Secretary of the Defence Department and I think with the Chief of Staff to the US Air Force. Was there any discussion at that about this whole idea of Australia sending troops into Iraq?
PRIME MINISTER:
Look it was a very wide-ranging discussion but there was a story which your newspaper ran and the Secretary of Defence, who was there at the dinner, said that the story was false.
QUESTION:
Are you prepared to put more money into the welfare system to reshape it for the future?
PRIME MINISTER:
We want to have a strong and generous social security system. There are two things that characterise our country; having a go, and we want to encourage every Australian to have a go, and the fair go – we want to deliver a fair go to every Australian and a strong and generous welfare system is a very, very important part of ensuring that we give people a fair go.
We don't want to sap, though, their instinct to have a go either and that's why it is important to be constantly looking at our welfare system to ensure that it is efficiently administered and properly targeted so they're the things we're looking at. Obviously, the Minister for Social Services, Scott Morrison, will be at the Press Club today. He's releasing the McClure Report. He will have a lot more to say about it but we want to be, not only the home of the fair go but the land where people have a go as well and that's what everything this Government does is designed to encourage.
QUESTION:
Do you think Gillian Triggs should resign?
PRIME MINISTER:
It's very simple. The Government has lost confidence in Gillian Triggs as President of the Human Rights Commission. We've lost confidence in her. What she does is a matter for her but as the Secretary of the Attorney-General's Department has made clear, she was not asked to resign and no inducement has been offered.
Thank you.
[ends]