The government says it’s cutting red tape and streamlining the foreign investment approval process but is the Foreign Investment Review Board getting in the way of investment in Australia’s economy?
With Anthony Albanese on a six-day trip to China, foreign investment is one of the issues that the prime minster flagged was on the table. In meetings with both president Xi Jinping and premier Li Qiang, the forced sale of the Port of Darwin, currently operated under a 99-year lease by Chinese company Landbridge, would have been raised.
It seems the Australian government won’t shift on its election promise to strip the port of its Chinese ownership and though the stated preference is for Australian ownership, as recently as June, defence minister Richard Marles would not rule out a US private equity player becoming the new owner.
Critics of the Landbridge deal point to China never allowing a foreign company to own a piece of its critical infrastructure but the fact is the Port of Darwin case must be measured against Australia’s foreign investment regime, not that of China. While there are no commercial or national security grounds to cancel the Landbridge lease, barring a spectacular U-turn, it will almost certainly happen.
What the Foreign Investment Review Board (FIRB) allowed in 2015 would not be allowed under the current regime. The implications are far greater than just Chinese investment, it applies to all foreign investment and, anticipating hold ups by the FIRB, the market is already self-regulating.
Not just about China
Following its return to power after the May federal election, the government announced a new application portal and streamlined application for FIRB approvals. The goal is to approve half of all applications within a 30-day timeframe.
As reported in the Australian Financial Review (AFR) on 28 May 2025, there is great scepticism in the business community as to whether the reforms will change anything. In order to meet FIRB requirements, parties to transactions are required to submit commercial in confidence material which would be made available to rival bidders in a foreign sale of an Australian company.
Said the report, “Specific concerns have been raised around the involvement of security agencies, including a lack of resources to deal with FIRB-related matters, a lack of timelines and poor communication about any issues. Applicants say they’re often left in the dark about what concerns actually exist, which means they are unable to mitigate them.”
In 2017, a new direction for FIRB was signalled—and has not changed—with the appointment of former ASIO boss David Irvine as chair. The late Mr. Irvine, who died in 2022, came to the position with no business experience. Whilst he brought a wealth of experience in government and as a diplomat, the fact that he graduated from the University of Western Australia with a degree in Elizabethan history might have pointed to a chair with one eye on the past.
According to sources quoted in the AFR, industry leaders have expressed frustration that FIRB lacks personnel with the business expertise to understand complex applications.
Chinese foreign investment continuing to waver
In 2024 there was $1.3 billion in new Chinese direct investment in Australia in 2016, the year before Irvine’s appointment as FIRB chair there was $22 billion (adjusted for inflation) in Chinese direct investment.
In 2024, for the first time since the signing of the China Australia Free Trade Agreement, China dropped out of the top ten largest foreign investors, falling to 13th place. In terms of cumulative foreign investment, China has just 1.4 percent of total investment in Australia with the US (27 percent) and UK (17 percent) continuing to maintain the top spots. Anecdotal evidence suggests China’s position will continue to drop.
FIRB playing its part in declining Chinese investment
A recent report from AustCham (Australian Chamber of Commerce in China) and the University of Technology Sydney surveyed a number of business leaders engaged in cross border trade, 93 percent of respondents said FIRB guidelines were unclear, while 55 percent felt that China continued to be singled out with decisions that blocked investment in Australia.
Against the backdrop of warmer political relations between Australia and China, criticising roadblocks to foreign investment, one of the 454 respondents said, “Actions speak louder than words in terms of promoting and facilitating Chinese investment into Australia.”
FIRB needs to get its act in order if we are to attract investment to industries where Australia lacks the capital, or the proper incentives, to invest locally.
