CANBERRA 1 May, 2024 – The Tech Council of Australia (TCA) welcomes the Federal Government’s announcement of reforms to the Foreign investment review framework as an important step in improving Australia’s investment environment, and encourages the Government to ensure implementation of the reforms delivers positive outcomes for the tech sector.
The changes will help create a more risk-based approach that the TCA hopes will deliver an overall reduction in processing times and greater certainty regarding timing and outcomes for tech companies.
“Improving the productivity of the foreign investment review process is critical to enable Australian tech startups and scaleups to attract funding to help grow their business,” acting CEO of the TCA, Ryan Black said.
“Overseas investment, particularly from Five Eyes countries, is a significant source of venture capital for Australian tech companies. This investment is particularly important for critical technology areas where Australia is seeking to boost its capabilities through the AUKUS and Quad partnerships, such as quantum, biotech, AI and cyber security.”
“We fully support the need for appropriate scrutiny of foreign investment in sensitive areas, but slow processing times, uncertainty and costly administration has meant that Australia’s regime is deterring rather than facilitating important investments.”
“The TCA has strongly advocated for changes to the foreign investment review process to address these barriers and put Australian tech companies on a more competitive footing. Reforms that address these issues, including by setting targets for faster processing and removing unnecessary regulatory duplication, are a positive step.”
“We note the Government has said that strengthening the regime for sensitive areas like critical technologies will involve the dedication of more resources and a commitment to make assessments more efficient. We urge the Government to closely monitor these changes to ensure these assessments are processed more efficiently, give greater certainty to trusted investors, and don’t inadvertently create any additional barriers. This will be essential to deliver on the ambition set out in the new policy to attract more foreign investment into critical technologies.”
“It will also be important to ensure the definitions of ‘sensitive datasets’ and ‘critical technologies’ are appropriately targeted, proportionate and developed in consultation with industry to avoid capturing low-risk investments. We also welcome further engagement with the tech sector on the definition of ‘non-sensitive sectors’, noting much of Australia’s tech sector falls outside of existing definitions of critical technologies.”
About two thirds of deals to invest in Australian tech companies involve foreign investors. Around two thirds of these foreign investors come from Five Eyes partner countries, particularly the United States.
Tech Council members and investors have consistently reported that Australia’s foreign investment review process is more challenging than in other markets, such as the United States or United Kingdom.
“We encourage the Government to continue reviewing opportunities for improvement in the foreign investment review framework as these new reforms roll-out,” Mr Black said.
“This could include improved pathways to facilitate foreign investment in critical tech areas from trusted investors such as AUKUS countries, and continue lifting the target for processing times to ensure even more applications are processed within statutory timeframes.”
About the Tech Council of Australia
The Tech Council of Australia is the peak industry body for Australia’s tech sector. Providing a trusted voice for Australia’s technology industry, with over 160 members, the Tech Council comprises the full spectrum of tech companies.
We aim to advise and engage with Australian governments, businesses, and the wider community to help support the ongoing creation, development, and adoption of technology across industries.
Our vision is for a prosperous Australia that thrives by harnessing the power of technology.
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