11 August 2016
Media Release - #2016067, 2016

Foreign investment applications for the 99-year lease of Ausgrid

Following careful consideration and consistent with the formal process required, I have today informed the bidders for the lease of 50.4 per cent of Ausgrid, the New South Wales electricity distribution network, that my preliminary view is that the foreign investment proposals put to me for this transaction are contrary to the national interest, in accordance with the required provision on the grounds of national security. I have invited the bidders to make submissions to me by 18 August 2016 in order to make a final decision after that time.

There has been an extensive period of engagement with the New South Wales Government and the bidders around the proposed lease. This has involved a detailed examination of national interest issues and possible measures which could mitigate identified risks.

In particular, during the review process national security issues were identified in critical power and communications services that Ausgrid provides to businesses and governments. I am, of course, open to consider what the bidders put to me, but at this stage no suitable mitigations have been identified that would, for the proposed transaction structure, appropriately address the identified risks.

As Treasurer I consider each foreign investment proposal on its merits.

Foreign investment has underpinned the development of our nation and we must continue to attract the strong inflows of foreign capital that our economy requires. Without foreign capital and investment, Australia’s output, employment and standard of living would be lower.

The foreign investment framework facilitates such investment while giving assurance to the Australian community that the investment is being made in a way that does not compromise Australia’s national interest. We will continue to welcome foreign investment that is not deemed contrary to our national interest.