The alliance, representing a collective capital exceeding A$5 billion, argues that a more precise definition would classify an "Australian business" as a company registered in Australia, not controlled by foreign interests, based locally, governed by a majority Australian board, and majority-owned by Australian shareholders.
The push from SAPA arrives amidst growing concerns over Australia's declining economic complexity, which is currently ranked 93rd globally, situated between Uganda and Pakistan. Citing data referenced by the Australian Academy of Technological Sciences and Engineering, SAPA stresses that this low ranking places Australia far behind peer nations such as Japan (1), Germany (4), the United Kingdom (8), and the United States (14).
SAPA emphasizes that "inconsistent definitions" of an Australian business across multiple regulatory and legislative frameworks undermine national interests and have compounded Australia's economic ranking decline. In response, the alliance has encouraged the Department of Finance to explore and adapt elements of industrial policies from Singapore, Israel, Taiwan, and South Korea, nations that have made notable advances in technological and industrial capabilities over the last five decades, despite having fewer resources than Australia.
The alliance's submission further highlights that existing definitions do not align with the goals of the Future Made in Australia (FMIA) policy, which aims to secure national supply chains in defense, clean energy, and critical technologies. SAPA contends that the current reliance on formalities, such as an Australian Business Number (ABN) or Australian Company Number (ACN), fails to account for the broader economic contributions of businesses crucial to Australia's long-term prosperity.
Moreover, SAPA points out that the current procurement framework permits foreign-owned corporations with subsidiaries in Australia, such as ACCIONA (headquartered in Spain) and John Holland Group (a subsidiary of China Communications Construction Company), to benefit from Buy Australian Plan (BAP) initiatives, a trend SAPA views as incompatible with the objectives of fostering national industry.
SAPA's submission includes Huawei PTY Limited as a notable example of how defining Australian businesses solely by an ABN can potentially conflict with national security interests. It argues that ownership and shareholding percentages are fundamental in establishing a national interest test. "Government has the power to direct or control resources, materiel, operations, and IP of majority Australian companies," SAPA notes, while similar measures are limited for foreign-owned firms.
While SAPA clarifies that its proposed definition does not aim to guarantee preferential treatment in procurement for Australian companies, it underscores that a clear definition is essential for the government to make informed decisions on policy and procurement related to corporate nationality.
SAPA concludes that a more precise delineation of Australian versus non-Australian entities could directly benefit national security strategic planning. "There is a national security imperative for the Australian Government to have clear and precise intelligence on the Australian/non-Australian industrial capacities which support Australian Defence Forces and our broader national security interests," SAPA states.
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