The Property Council of Australia has welcomed the risk-based reforms to Australia's foreign investment framework but said it will matter little if our tax settings continue to put a handbrake on foreign investment.
Property Council Group Executive Policy and Advocacy Matthew Kandelaars said foreign investment plays a key city-shaping role in our economy and is a major productivity driver.
"In a fiercely competitive global environment for capital, it makes sense to encourage and simplify the frameworks for foreign investment flowing into our economy," Mr Kandelaars said.
"Australia must put itself in the path of global institutional investors and the city-improving assets and well-paid jobs that flow from that investment.
"That is how Australia will support the development of more homes, offices, retail centres, industrial sites, retirement living, student accommodation, hotels and community, cultural and sporting precincts, and boost our economic growth and prosperity.
"Streamlining the process for trusted partners in non-sensitive sectors will help create a more dynamic and responsive investment market for the capital we need to build our nation.
"Trusted partners who have been investing in our country for years should be treated as such.
"The reforms announced today must be accompanied by a commitment to city-shaping investment. Not only have Foreign Investment Review Board approval timeframes led to delays and uncertainty, but they have also been exacerbated by opportunistic and counter-productive state taxes on overseas investors.
"The first test of the new framework will be its ability to support the burgeoning build-to-rent sector which is critical to meeting our national housing goals.
"We welcome the government's move to ensure foreign investors can purchase existing build-to-rent properties, supporting liquidity in a market that attracts patient long-term investment, and commonsense suggests that this also extends to other commercial-residential asset types like purpose-built student accommodation.
"If executed well, the government's proposed changes to the managed investment trust withholding tax rate for build-to-rent can leverage the support of institutional capital to meet our housing goals.
"If mishandled, we will waste the opportunity to create 150,000 rentals and 10,000 affordable rentals by 2033," he said.
