Treasurer Jim Chalmers to unveil next stage of investment reforms in bid to boost capital inflows into Australia

Foreign entities will have access to automatic approvals for low-risk investments under a new proposal as the government looks to increase overseas capital flowing into Australia.

Treasurer Jim Chalmers will on Friday reveal a second tranche of reforms to the nation’s foreign investment review scheme at a speech in Sydney.

The Government has already introduced changes to the way foreign investments are determined by the Foreign Investment Review Board, including streamlined assessments for investors with a proven track record and more resources for the board.

“Our vision is for Australia to be the destination where global investment flows first and grows fastest,” Dr Chalmers will tell investors at the Citi A50 Australian Economic Forum.

“When you reconsider and redeploy the capital you manage, our objective is for Australia to be the most obvious and most compelling place to put it to work.”

Boosting foreign investment is seen as a key way to fix Australia’s ailing productivity performance, which has fallen in the past decades in line with lower investment in capital such as tools and manufacturing equipment.

Dr Chalmers has previously called for more investment to boost capital deepening - increasing the amount of equipment available to each worker - which he called one of the big challenges to productivity.

Following its economic reform roundtable in August, the government has begun rolling back red tape, put in place an Investor Front Door pilot and begun consultation on changing the super performance test to encourage extra investment.

“We’re open to going further, which is why I’m releasing a new consultation paper for a second tranche of foreign investment reforms today,” Dr Chalmers will say.

“Our goal is a FIRB regime that is much stronger where risks are high, and much faster where risks are low.”

The Government will consult on a new automatic approvals process that would allow low-risk actions from trusted investors to require notification but not sign-off.

The FIRB would retain the power to review cases and call them in if needed.

Additional measures include reducing reporting requirements, better managing approved investments and making sure more decisions are made by the statutory deadline.

“We’re also looking to tighten our scrutiny of investments in sensitive sectors, strengthen enforcement powers and ensure non-compliance is penalised,” Dr Chalmers will say.

“And we’ll be consulting on a new enforceable undertakings power and conditions to make sure investment is in the national interest.

“This will make the FIRB regime stronger and faster.”