Foreign Investment Review Board accused of failing to do their job

by Julia Corderoy18 Sep 2014
The chair of the House of Representatives Economics Standing Committee Kelly O'Dwyer has her eyes set on the Foreign Investment Review Board (FIRB) for failing to enforce foreign property investment rules.

Foreign property investment has been a hot topic of late as Australia’s housing market sizzles away, with many industry pundits arguing that foreign investment has contributed to our housing supply shortage and rising prices.

Speaking at the Bloomberg economic summit, the ABC reported that O’Dwyer slammed FIRB for failing to prosecute any breaches of Australian foreign investment regulation since 2006.

"If you have a framework in place, in order to give confidence to people more broadly in the Australian community, you have to have a regime that will be properly enforced, and so far FIRB have demonstrated that they have not been doing their job in that regard. I think there has been a failure of leadership in FIRB. I think that they have not been proactive in the way that they have gone about their role,” she said.

The two main regulations that O’Dwyer has her eyes on state that non-residents should be prevented from purchasing existing dwellings – to help stimulate the construction of new housing supply, and that a foreign temporary resident must sell their home within three months of departing the country. 

O’Dwyer would like to see tougher penalties put in place for investors who break the rules. According to the ABC, she says the current fine of $85,000 is not a deterrent and many investors regard this as a simple “cost of doing business”. 

"We're actually looking at a sliding scale that would attach to the value of the property if people do breach the rules in place," she said.

O’Dwyer would also like to introduce penalties for those who help foreign buyers to bend the rules, such as real estate agents and conveyances, the ABC reported.