Mr Phillips, a former deputy governor of the Reserve Bank, also rejected suggestions that the FIRB needed to be more transparent in its handling of foreign investment applications. "It is not possible for the board to go publicising applications that come before it," he said. "Those applications are commercial-in-confidence." Mr Phillips said the FIRB was currently subject to many Freedom of Information requests which were taking up the time of its staff. "We are getting so many requests from (journalists) and others under the FOI Act which is unfortunate in a way because it is taking up the time of people who ought to be dealing with applications," he said. Mr Phillips said he was "not sure how much more transparency there can be". "I have always been a fan of transparency up to a point -- the point where you start to trample on commercial-in-confidence material from the applications, or you run the risk of distorting the market by giving out information which would not otherwise be available to the market," he said.
Australia’s regulation of foreign investment is a black box process: you lodge an application, the Foreign Investment Review Board assesses it, consults on it, develops recommendations on it, all in secret, and then hands it to the Treasurer, who has the final say anyway. The process is mostly opaque to the applicant, and wholly opaque to everyone else. But it’s not just the process. The rationale for assessment, which is the “national interest”, is also opaque. What’s the national interest? Well, that’s never defined, because defining it might circumscribe your capacity to rule out future applications. That’s not to say there aren’t lots of definitions in the assessment process. The government has overhauled the FIRB guidelines twice since August 2009. “National interest” specifically includes “sovereignty and security interests”, competition issues, economic impacts, other government policies and the character of the investor. Ironically for a process that is entirely obscure, the guidelines include whether an investor “operates on a transparent basis”. But these are guidelines for a vacuum — they don’t serve to indicate what is or isn’t in the national interest, because no politician wants to be circumscribed in that way. As we know from WikiLeaks, the guidelines can be a cover for other concerns: the 2009 overhaul was explicitly aimed at Chinese investment in the resources sector. The government has acted to substantially lift the thresholds at which the FIRB process applies. The 2009 changes more than doubled the threshold at which FIRB notification was required. Those thresholds are indexed, and are now, for non-real estate acquisition, $231 million for non-US foreign investors and for sensitive sectors like the media, and just over $1 billion for US investors. Even so, once the threshold is crossed, you’re into a limbo where politics, as much as any consideration of “the national interest”, determines bids, in a way that no one except Cabinet can ever be sure about.