FOREIGN investment has always been a contentious and often divisive issue.
The recent rejection of bids for agricultural and infrastructure assets by the Treasurer has only heightened this debate.
However, as industries like agriculture struggle with a gaping hole in the capital required to build on the vast market opportunities presented by a cashed-up and quality-conscious consumer, and federal coffers fall short of what is required to invest in the infrastructure and services required to maintain the Australian lifestyle, it is a debate which must be had.
The community, and the politicians seeking the approval of the voting public, have a right to question the sale of land and infrastructure to overseas interests. It would be foolish to deny there is something uncomfortable about pieces of our country being sold to foreign interests.
This discomfort is often fuelled by scare-mongering by some in the political sphere who entertain protectionist sentiments and typically also oppose the valuable free trade agreements recently negotiated and signed by Australia.
Australia is a capital importing nation and has been for virtually its entire European history.
For Australians to maintain the standard of living to which they are accustomed, foreign investment must be attracted to make up the shortfall in domestic savings.
In a macroeconomic sense, federal, state and territory governments are not helping.
By continually running budget deficits, our domestic savings fall further behind our investment needs.
That means we need more and more foreign investment to fill the gap.
It also puts upward pressure on our dollar, damaging the competitiveness of our exporters - but that’s a topic for another day.
Foreign investment in publicly owned assets can provide our cash-strapped governments with another means to invest in the infrastructure we need to make Australia a great place to live.
We all want more and better services, but these are simply not able to be delivered by governments through borrowing or taxation alone.
If our level of discomfort with assets being sold to offshore interests is such that it continues to foil economically sound transactions - and be used for political point-scoring - an earnest discussion about serious savings measures needs to be had and had quickly.
Agriculture has rightly been identified as one of Australia’s next wave-of-growth sectors, fuelled by burgeoning demand from growing Asian wealth.
