Keynote address to the AFR Infrastructure Summit, 21 November 2022

Bruce Miller AO, Chair and non-executive member, Foreign Investment Review Board


Good afternoon,

Thank you to the Australian Financial Review for inviting me to speak today.

I am Bruce Miller, and I am the Chair of Australia’s Foreign Investment Review Board, a role I started in April this year.

I have met a number of investors and advisors over the last six months, but this is the first occasion on which I have spoken publicly in this role, so I should speak for a minute about my background.

I have a mindset shaped by what I have done: first, many years representing Australia overseas that has included promoting Australia as an investment destination; secondly, handling diverse national security issues to mitigate risk to Australia; and third, working over the last five years with several international businesses has given me the opportunity to understand corporate decision‑making on investment. To sum up, investment promotion, risk mitigation and some insight into corporate decision‑making.

Enough on me, and moving on to the foreign investment landscape. This is less simple a story than it was. Countries need foreign investment more than ever as the global economy seeks to recover from the pandemic and as we tackle demographic and climate challenges, which will require significant investment in infrastructure across the world. At the same time, many countries are more conscious of assessing and managing any risks associated with foreign investment accentuated by geo‑political competition.

As others, including the Minister, have said this morning, costs of major projects have increased while supply chain disruptions and bottlenecks have added to uncertainty. Australia needs effective, reliable and modern infrastructure if it is going to continue to thrive.

Australia has strengthened our foreign investment framework, with changes in recent years that have attracted bipartisan support. The framework’s focus is on encouraging investment into Australia while having a robust, risk‑based approach to ensure investments are in Australia’s national interest.

Australia is not unique in doing this – we see many like‑minded nations making similar changes to their foreign investment screening regimes to address national interest and national security concerns.

This afternoon, I thought it might be useful to give you some insights into foreign investment screening and the application of our framework to infrastructure investment in this increasingly complex environment.

But first some basics that deserve repeating.

Australia has always relied on foreign investment. We welcome it.

You can see this in Australia’s strong foreign investment performance in comparison to our peers. Foreign investment into Australia averaged 2.7 per cent of GDP over the four years to 2021, compared to 1.3 per cent for the OECD as a whole and 1.4 per cent for G20 nations.

The case for foreign investment is strong: foreign investment supplements our domestic savings and enhances the economic wellbeing of the Australian people.

It supports jobs and provides new employment opportunities for Australians.

It helps to lift innovation, improves access to overseas markets and enhances competition.

Foreign investment lets Australian firms access the technology, know‑how and expertise that has contributed to Australia becoming the world’s 13th largest economy, with 28 years of uninterrupted annual growth before the COVID‑19 pandemic struck in 2020.

The importance of foreign investment to Australia’s economy is reflected in the data.

  • Australia recorded $36.6 billion in foreign direct investment (FDI) inflows during 2021.
    • At the end of 2021, the total stock of FDI in Australia was worth $1.1 trillion – a net increase of $29.8 billion from 2020.
    • The first quarter of 2022 saw our best quarter on record, with FDI inflows reaching $58.8 billion in one quarter, due to a surge in merger and acquisitions activity.
    • Of course there are often wild swings quarter to quarter so we shouldn’t read too much in to this figure.
  • The top six countries by stock of FDI in Australia are: the United States, Japan, the United Kingdom, Canada, the Netherlands, and China.
  • Foreign investment review data indicates that approvals of proposals to invest in Australia remains strong and that we have ample investment opportunities for both Australians and foreign investors.

The data shows Australia has been consistently open to and encouraging of foreign investment.

To support this continuing investment in Australia, Treasury is seeking to streamline the processing of foreign investment applications. It is a work in progress.

Over the past few years, case processing times have been volatile, owing to challenges presented by COVID‑19, many more applications because of zero‑dollar screening, and the implementation of changes to our legislative and policy framework.

Case processing times have since stabilised and are now decreasing. The median processing time for cases in 2021‑22 was 52 days. In recent months, this has dropped even further to around 44 days.

Treasury remains committed, as it always has, to ensuring the foreign investment application process is accessible and not overly burdensome. That is why we are continuing to focus on stronger direct engagement with investors to ensure their feedback is heard.

But some applications will take longer to assess than others as they will attract more attention from Treasury and consultation partners because they require a more detailed assessment of whether they are in the national interest, including what risks exist and what mitigations might be possible. This takes time – usually because we are working to find a way to approve an application.

History of the foreign investment framework

Our long history of welcoming foreign investment stands together with Australia’s 46‑year‑old foreign investment screening framework, which seeks to ensure foreign investment is not contrary to our national interest, and so maintains community confidence in the value of foreign investment to Australia – a necessary part of the democratic process.

In 1972, the prospect of an Australian icon – the Chiko Roll – being snapped up by a US conglomerate, caused a backlash in the press and Parliament.

That set in motion the beginning of Australia’s foreign investment framework.

And while the framework has evolved over time, its core features have remained the same.

That is, it operates under a ‘negative test’, with an assumption that a proposed foreign investment can proceed unless it is found to be contrary to the national interest, and in assessing that we look at economic impact, taxation, investor character, competition and national security.

The framework is still grounded in the Foreign Acquisitions and Takeovers Act 1975 (FATA) and underpinned by the foreign investment policy.

At the risk of being repetitive, the objectives of the framework are to:

  • ensure Australia remains an attractive destination for foreign investment;
  • safeguard Australia’s national interest, including national security; and
  • maintain public confidence in foreign investment.

But the roles of the Foreign Investment Review Board (FIRB) – which provides insight and advice – and the Treasury – which administers the framework – have evolved.

As it was when it was established 46 years ago, the FIRB remains a non‑statutory advisory body to the Treasurer, who is the decision maker on foreign investment proposals and the minister responsible for Australia’s foreign investment framework.

The FIRB’s role is to bring a wide set of perspectives to the assessment of cases through a diverse membership that encompasses deep commercial, M&A, legal, political and international experience. Consideration of national security risks is now a key element of the Board’s work.

The Treasury is responsible for administration of the framework and advises the Treasurer on Australia’s foreign investment policy and regulatory settings.

Informed by the advice of the FIRB, Treasury supports the Treasurer in considering specific foreign investment decisions.

The Board also supports Treasury in its work, by lending its expertise to advise on the development of policy and regulatory settings.

A shift in Treasury’s role has been that it has moved from being a ‘gatekeeper’ to being an end‑to‑end regulator of foreign investment.

This flows from an increased focus on the lifecycle of an investment, which means more weight on compliance and, where necessary, enforcement action, not just one‑off approvals. Accompanying this has been a more explicit focus on risk‑based analysis of investments.

Government infrastructure priorities

Everyone here would agree that Australia’s need for new infrastructure is both a challenge and an opportunity. We are experiencing a high level of infrastructure investment, and this level is expected to continue to grow in coming years.

Our energy transition will require investment in energy generation capacity across Australia, and the infrastructure to transport it to businesses and homes. We need thousands of kilometres of transmission lines alone to support this transition.

Construction of new roads and rail remains essential to service our growing population.

And Australia’s telecommunications continue to demand further investment to ensure all Australians can participate in our ever more connected world.

Meeting these demands will not be easy, particularly as the global economy faces continuing uncertainty from conflict and supply chain disruptions. However, these challenges provide opportunities to generate growth across the economy and lift productivity.

New transmission lines mean new capacity for solar, wind, hydro and other renewable energy. This increased capacity provides investors, businesses and governments with certainty that Australia will manage its energy transition.

New road and rail infrastructure will reduce travel times and can reduce travel cost, two of the most important factors in determining commuter and industry behaviour.

And an improved telecommunications infrastructure, particularly in rural, regional and remote areas, helps connect all Australians and opens doors to business, education and health services, all of which generate an economic dividend.

The recent 2022‑23 Federal Budget included a range of infrastructure measures. These included funding to continue building high‑priority road and rail infrastructure, funding for regional programs, support for critical freight links, and support for the NBN and to improve telecommunications in rural and regional Australia.

These are important investments for Australia’s future, and foreign investment has an important role to play in supporting these infrastructure priorities and capacity to deliver.

It is clear from this that foreign investors see significant benefits in Australian infrastructure.

Evolving investment environment

However, along with the benefits of foreign investment there is some risk, which we must manage. The risks have increased in recent years as a result of rapid technological advances and changes in the international security environment.

Greater technological connectivity has led to greater vulnerability to cyber‑attacks, and we have seen, in current conflicts and broader geo‑strategic competition, the emergence of  ‘grey warfare’, which seeks to weaken an opponent by disabling or disrupting critical infrastructure rather than destroying it through military force. Put simply, it would be something like flicking the switch on the electricity network from the other side of the world.

We are now having to more closely assess investments from all countries to ensure they are not prejudicial to our national security. This is not to say we are equally concerned about all sources of investment, but that our globally inter‑connected economy increasingly means that determining the true provenance of inbound investment is not always as straightforward as it may at first appear.

Australia’s concern about, and response to, these trends has not been unique, and this changed risk environment is here to stay.

The OECD has observed that there has been a profound reassessment of the risks globally, and it is for this reason that many countries have updated their own foreign investment screening systems in recent years.

We’ve seen big shifts in the approaches taken to these issues in Canada, the EU and its member nations, India, Japan, New Zealand, the UK, and the US.

By May 2021, the OECD observed that over 85 per cent of countries participating in its Freedom of Investment discussions had a foreign investment screening mechanism in place.

Benefits and risks of foreign investment in infrastructure

Australia’s infrastructure sectors have a range of opportunities where foreign investment can make a positive difference. However, there are also a number of risks we have to keep in mind.

Telecommunications networks, systems and infrastructure are vital to the delivery and support of other critical infrastructure and services such as power, water and health.

A serious compromise of the telecommunications sector would have a cascading effect on other critical infrastructure and prejudice Australia’s national security.

The information contained within networks and their connection to other critical infrastructure also makes networks and facilities a target for espionage, sabotage and foreign interference activity.

Energy too is critical infrastructure. As the balance of Australia’s energy mix shifts from coal and gas toward renewables including wind and solar, we must ensure the security of the technology enabling our energy generation assets.

To help protect our critical infrastructure the Security of Critical Infrastructure Act 2018 (SOCI) was amended last year to expand coverage from 4 to 11 sectors and 22 asset classes. Overseen by the Department of Home Affairs, SOCI covers all critical infrastructure in Australia, regardless of whether it is foreign owned or not, and imposes positive security obligations.

It is therefore separate from our foreign investment framework and the FATA, but has flow‑on effects for the foreign investment framework as investment in these sectors must obtain FIRB approval.

Turning back to benefits to Australia, foreign investment can play an important role in Australia’s transition to a clean energy future.

We need only look at the 150‑megawatt Horndale ‘Big Battery’ in South Australia as evidence of foreign investment’s power to build and develop world‑leading green technologies in Australia – in this case from investment by the French company Neoen and technology from Tesla. In our engagement with investors, we see increasing interest from overseas investors keen to participate in Australia’s energy transition.

Australia’s geographic spread means the reliable and efficient transport of goods and passengers across the country is essential. The infrastructure that links us together – ports, aviation and freight services – are vital to our economic prosperity and to our national security.

Our interest in transport infrastructure also extends to public transport. Not only are large and connected public transport networks critical to the functioning of Australia’s economy, any malicious disruption of these networks would have a consequential impact on national security.

Some public transport providers also hold large data sets on their customers; including billing information and their public transport usage, which also need to be protected from theft and espionage.

So our infrastructure requires targeted, effective and evolving protections to ensure that foreign investment continues to be a beneficial driver of innovation, not a security risk.

To meet these needs, successive Australian governments have amended the legislation that underpins our foreign investment framework.

Recent legislative reforms to the FATA

The amendments to the FATA which commenced on 1 January 2021 now require investors to seek approval for all investments in the areas that are most critical to Australia’s national security.

This includes acquisitions which are involved in, or are connected with, critical infrastructure or essential to core defence or national intelligence community capabilities.

The amendments also introduced a power that allows the Treasurer to ‘call in’ for review investments that may pose national security concerns for review. And a ‘last resort’ power, by definition only to be used in exceptional circumstances, to review existing approvals on national security grounds.

These changes have broadened our scope to manage risk without, we believe, impeding foreign investment volumes. And in turn, they demonstrate to all Australians that our foreign investment framework is responding to emerging global challenges by protecting our national interest.

Finding the right balance is never easy, and the sweet spot will always be changing as our security and economic environment changes. But the framework we have gives us the tools and the agility we need to receive and consider feedback and then use that to improve how we operate.

Adjustments to the framework continue and will continue. For example, in April this year a package of amendments to regulations came into effect that benefit foreign investors who acquire interests in a moneylending agreement, invest in unlisted entities and Australian media businesses, contribute additional capacity to entities without increasing their overall ownership or transact on behalf of institutional investors as part of a custodian service.

Broadly speaking, these measures streamline the handling of non‑sensitive cases and reduce red tape. We are looking at further adjustments to streamline our processes so that we focus on identifying and managing medium to high risks, not impeding low risk investments.

As I mentioned earlier, Treasury is also continuing to upgrade its systems to provide the best possible service to investors.


To conclude, foreign investment has, and remains, important to the Australian economy and to Australians.

The Government continues to encourage investment in Australia. Foreign investment has much to offer us. We continue to run a negative test – assuming that a proposed investment can go ahead, unless we find good reason that it is not in the national interest. We seek to work with investors, not against them. And we continue to build on the strengths and success of the foreign investment framework.

Foreign investment has a big role to play in building our infrastructure. But it can also pose challenges to our national security. Balancing the benefits and the risks, and searching for risk mitigants, including through attaching conditions to approvals, is the heart of what the FIRB does and, if it works well, can help the government assure Australians that foreign investment is in their interests.

The foreign investment framework needs to keep pace with changes in the foreign investment landscape, as balancing economic benefits with the national interest, including national security, will only become more complex with technological advancements and as we move towards a low carbon future.

Thank you for the opportunity to speak to you today. Continued engagement and dialogue are beneficial for us all as we work to better understand the opportunities that are in front of us and address current and future challenges.