THE Gillard government has accused the Opposition Leader, Tony Abbott, of raising Australia's sovereign-risk status and jeopardising jobs by proclaiming investments by Chinese state-owned enterprises would be rarely approved under a Coalition government.
The Treasurer, Wayne Swan, said Mr Abbott had surrendered the Coalition's foreign investment policy to the National Party, while the Trade Minister, Craig Emerson, said Mr Abbott's statement would scare other countries with sovereign wealth funds, such as Singapore and Middle Eastern nations, from investing in Australia.
Mr Abbott sparked the debate with a speech to a business breakfast in Beijing on Tuesday during his first visit to China as the Opposition Leader.
Mr Abbott said Chinese investment was complicated by the prevalence of state-owned enterprises. He said all investment bids would be assessed against the national interest by the Foreign Investment Review Board, as is the case at present, but then suggested the criteria would be tightened.
''It would rarely be in Australia's national interest to allow a foreign government or its agencies to control an Australian business,'' he said. ''That's because we don't support the nationalisation of business by the Australian government, let alone by a foreign one.''
The Coalition has long been debating internally its foreign investment policy. The Nationals have led the debate against state-owned companies investing in farms, mining and other assets, while the conservative Liberals have been more inclined to support foreign investment.
Mr Swan said Mr Abbott had outsourced the policy to the Nationals senator Barnaby Joyce.
''I actually think that it's very damaging for Australia that foreign investment policy in the Liberal-National Party has now been taken over by Barnaby Joyce,'' Mr Swan said in Sydney. ''There's a pipeline of investment that is coming our way … creating jobs and wealth in Australia.
''Now Mr Abbott wanders off overseas and puts a very big question mark over all of that because he wants to play politics while he's wandering around the world.''
Dr Emerson said the Foreign Investment Review Board already scrutinised every investment bid by a state-owned company.
''What he's saying is … he would step in and override that and ensure it was not approved,'' Dr Emerson said. ''This is an extraordinary lift in sovereign risk perceptions of Australia.''