HONG KONG/SYDNEY (Reuters) - Australia is pulling staff out of federal departments to help its foreign investment regulator manage a deluge of work since announcing tougher policing of cross-border transactions in the COVID-19 pandemic, the Treasury department told Reuters.
The Australian Treasury department and Australian Taxation Office (ATO) supply the staff of the country’s Foreign Investment Review Board (FIRB), which makes recommendations about whether to approve overseas buyouts of Australian interests.
Since the government ordered a shutdown of most public activity to contain the coronavirus in March, a host of Australian businesses have hired administrators or seen their shares tumble. That has led to more offers by foreign investors for troubled Australian assets.
The government has responded by removing most thresholds required to need FIRB approval, increasing the number of approvals required. Exactly how many more are needed is not clear.
“Treasury and the ATO have each redeployed internal staff or brought in additional staff to manage the workload associated with the substantial increase in applications since the zero dollar threshold was announced on 29 March 2020,” a Treasury spokeswoman said in an email on Tuesday.
The spokeswoman did not say how many additional staff were being moved into FIRB. The oversight body was run by 55 Treasury staff and 67 ATO staff in 2019, according to its last annual report.
The changes to the threshold mean the waiting time for applications to be approved has slowed from an average of six weeks to at least eight to ten weeks, according to one corporate lawyer in Sydney.
The lawyer could not be named because he was not authorised to speak to media.
Under FIRB’s new oversight regime, all foreign investors face greater scrutiny when bidding for sensitive assets, regardless of the size of the deal and whether the buyer is private or state-owned.
The Treasurer also gets the power to change or impose conditions on a deal or force a sale after the deal has been approved by FIRB.
The federal government said when it unveiled the changes that it would spend an additional A$50 million to enforce the rules, which are expected to take effect in 2021.
Reporting by Scott Murdoch in Hong Kong and Byron Kaye in Sydney; editing by Larry King