It takes 50 days, on average, for Australian regulators to process a foreign investment application, nearly double the statutory limit, according to the latest data which reveals another increase in processing times.
Stakeholders have voiced their frustrations with the delays through limited formal feedback, which also deteriorated last year.
Regulators now take nearly two months to process foreign investment applicationsThe 2020-21 performance report on the regulation of Australia’s foreign investment framework. Released annually and published this month by Treasury, the latest report confirms the third year in a row processing times have increased.
Under Australia’s foreign investment laws, the Treasurer is typically required to make a decision on an application within 30 days. This, increasingly, is not happening, with average processing times growing from 41 days in 2018-2019 to 50 days in 2020-21.
Applicants have previously told InnovationAus, foreign investment approvals can stretch to months and risk deals breaking down, with some describing the approval process as opaque.
Treasury noted the financial year included a six-month period where the value threshold for foreign investments had temporarily been reduced to zero. This meant the regulator processed an additional 1225 proposals — significantly more than the previous year when the average time was 48 days.
The temporary changes go some way to explaining the increase in processing times, but stakeholders also flagged an inefficient process in their feedback to Treasury.
Only 40 per cent of respondents to a Treasury’s regular stakeholder questionnaire agreed or strongly agreed that their application had been dealt with efficiently. Conversely 40 per cent disagreed and anther 20 per cent strongly disagreed.
Treasury said the questionnaire results may not be representative because of a low response rate of only 10 from the 93 stakeholders approached, but welcomed the insights nonetheless.
“Respondents commented that inconsistent approaches to reviewing applications led to delayed finalisation of cases beyond the statutory period. Respondents reported contributing factors including multiple requests for information,” the performance report said in a summary of questionnaire results.
In 2020, the Coalition government allocated more than $60 million to support reforms Australia’s foreign investment framework, while another $86.3 million has been budgeted for new information technology system to support more effective and efficient foreign investment application processing, case management and compliance activities.
Changes to the framework were also made last year to give more consideration to national security in application assessments along with the traditional national interest test.
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