Annual Investment Statement
I stand to present the Government's Annual Investment Statement.
The Government first committed to deliver this annual Statement in 2013. At the same time, it created the first federal minister for both trade and investment in recognition of the indivisibility of these critical contributors to Australian jobs, growth and our way of life.
Increasing investment has taken on greater importance as we emerge from COVID-19.
(Current state of investment flows and stock)
Today, I am releasing the International Investment Australia 2020 Report.
The report shows that net foreign direct investment flows into Australia in 2020 fell 48 per cent from 2019 levels, reflecting a global decline in FDI flows due to the pandemic.
While this was a large reduction, Australia fared better than many developed economies, which declined by around 58 per cent on average over the same period.
The value of FDI stock in Australia remained stable over the last year at $1 trillion.
FDI supports 1 in 10 jobs and about 40 per cent of exports in Australia.
The number and value of approved investments in Australia has held up well in recent years, including in 2020.
The United Nations Conference on Trade and Development (UNCTAD) reports the value of announced greenfield projects in Australia increased by almost 9 per cent compared with an 18 per cent decrease in similar flows to all other developed economies.
There are several reasons Australia has remained an attractive destination for investment through the pandemic:
- Our highly skilled and highly educated workforce
- Our proximity to the dynamic and fast-growing markets of the Indo-Pacific
- Our abundant natural resources and world-class industry capabilities
- Our stable democracy and strong rule of law.
But perhaps most importantly, our strong and well-managed economy has given us the fiscal firepower to support our economy through the pandemic.
[Investment as key part of our recovery]
All nations are grappling with an increasingly complex and challenging global environment, which is why the Coalition Government has implemented a series of reforms to our foreign investment review framework over the last year.
Our system is focused on promoting business certainty and delivering timely foreign investment decisions, while ensuring that investments are not contrary to the national interest and national security.
At the same time, the Global Talent and Business Attraction Taskforce is looking at how we can identify and attract more high-value businesses and exceptional talent to Australia.
With the widespread roll-out of vaccines, the reopening of Australia's borders is proceeding well.
The Government is conscious that over the past 18 months, restrictions on entering Australia have been frustrating for many international investors.
So, we are glad that, from December 1, we will proceed to the next stage of the reopening of our international borders, under which fully vaccinated eligible visa holders will be able to enter Australia.
We are very much looking forward to welcoming our foreign investors back to Australia in person.
[Investment underpinning efforts to address climate change]
At the same time, the Government is focused on supporting businesses to grow.
Our $1.3 billion Modern Manufacturing Initiative encourages investment in key areas of comparative advantage and strategic importance:
- resources technology and critical minerals,
- food and beverage,
- medical products,
- recycling and clean energy,
- defence and
Already, foreign investment is playing a significant role in our efforts to address the impacts of climate change and support the transition to a new energy economy.
The Government is investing $20 billion in the decade to 2030 to support the commercialisation of low emissions technologies – we hope to leverage up to $80 billion in private investment.
Our focus is on cost-breakthroughs in clean hydrogen, energy storage, carbon, capture and storage, solar, green steel and aluminium and measuring soil carbon.
The Hydrogen Energy Supply Chain (HESC) operation in Victoria, for example, is a world-first project that will produce clean liquid hydrogen for export to Japan.
Neoen, a French energy utility company, has invested more than $3 billion over the last decade in Australia's renewables sector.
It has 14 large-scale renewable energy projects across Australia, with 2 gigawatts of assets in operation or under construction.
These projects include the 400 megawatt Western Downs Green Power Hub in Queensland; the Goyder South wind, solar and battery storage project in South Australia; and the 300 megawatt Victorian Big Battery near Geelong.
In critical minerals and rare earths, we want Australia to become a world leader in the extraction, processing and supply of these inputs to semiconductors, mobile phones, wind turbines, electric cars, solar panels and other high-tech products.
We are already the world's top producer of lithium, and the largest supplier of refined rare earth products outside China.
We have seen early success stories like Lynas, Australian Strategic Materials, Renascor and Pilbara Minerals.
Australia's Renascor Resources, for example, concluded a major deal with South Korea's POSCO to supply purified spherical graphite, helped along by strong government advocacy and engagement.
In the food and beverage sector, Chobani is a great success story out of Victoria.
Chobani has ambitious growth plans and is committed to ongoing investment in Australia with its continued commitment to manufacturing innovation…not only supporting local manufacturing jobs, but also supporting Victorian dairy farmers and local supply chains.
Global technology company Thales – who operate in defence, security, transport, aerospace and space – spent $657 million with over 1,800 Australian suppliers in 2020. This supported over 2,000 jobs.
And in high-value research, I would like to recognise Bosch for its role in bringing new skills and capabilities to Australia's manufacturing sector.
Bosch employs a large workforce of engineers and technology specialists in Australia.
It is a leader in innovation through its work in the development and application of vehicle electronics and safety systems, cyber security gateways, and driver assistance systems for the global car industry, as well as in agri-technology and advanced manufacturing systems.
[Investment supporting recovery underpinned by trade]
There are opportunities through trade to secure greater foreign investment.
We have a promising program of trade negotiations to deliver more investment for Australia.
In the last year, we have made substantial progress towards finalising free trade agreements with the United Kingdom and the European Union – two of our largest sources of foreign investment.
These agreements will not only support Australia's economic recovery from COVID-19, but also help diversify our trade, and strengthen trade and investment in major global markets.
Australia has come through this pandemic in a strong position, and in the recovery phase ahead, investment will be vital to our continued economic growth, employment and future resilience.
Despite the challenges posed to the global economy by the pandemic, Australia remains an attractive destination for foreign investment.
The Morrison Government is committed to ensuring we have the right settings to take advantage of opportunities to attract foreign investment.
Whether it's through trade negotiations, border settings, conditions for business – each is carefully calibrated to contribute to investment being a constructive and productive element of Australia's economic profile, contributing to jobs and growth for all Australians.