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Investment

Foreign Investment

Australia has traditionally drawn international capital to supplement our domestic savings. This investment has allowed Australians to enjoy higher rates of economic growth, employment and living standards that could not have been achieved through domestic savings alone.

Foreign direct investment (FDI) is where an investor holds 10 per cent or more ownership in a company. FDI benefits Australia by:

  • creates new employment opportunities – foreign companies setting up subsidiaries and creating new businesses in Australia create jobs and build economic growth;
  • allows access to new technologies – foreign companies often transfer technology to Australia when they invest, making us more internationally competitive;
  • provides revenue to the government – profits of foreign-owned companies are taxed, spreading the benefits of these investments to all Australians;
  • helps drive productivity growth – it increases the level of competition in the market.

A number of studies have examined the impact of foreign investment. For example, an Economist Intelligence Unit study found that for every $1.0 billion of foreign investment in Australia, 1,000 jobs were created.

Australian investment abroad 2014 (a)

($ million)

Rank (b) Country Level of direct
investment
abroad
Total Australian
investment
abroad (c)
1 United States 136,248 575,514
2 United Kingdom 55,155 304,541
3 New Zealand 61,627 99,927
4 Japan 520 69,645
5 Germany np 65,427
6 China 12,074 57,884
7 Singapore 13,050 50,715
8 Hong Kong (SAR China) 5,106 45,974
9 Canada np 45,403
10 Switzerland np 41,182
Total all countries 540,743 1,918,321
of which: APEC 287,162 1,035,426
ASEAN10 29,092 84,234
EU28 83,473 529,153
OECD 324,627 1,367,552

(a) Australian investment abroad: level of investment (stocks) as at 31 December 2014, by selected country and country group.
(b) Ranked on total Australian investment abroad.
(c) Includes portfolio investment.
Source: ABS catalogue 5352.0.

Foreign investment in Australia 2014 (a)

($ million)

Rank (b) Country Level of direct
investment
in Australia
Level of total
investment
in Australia (c)
1 United States 163,410 758,153
2 United Kingdom 87,374 484,157
3 Belgium 4,340 226,084
4 Japan 66,124 174,676
5 Singapore 28,049 80,207
6 Hong Kong (SAR C hina) 11,465 77,286
7 China 29,970 64,525
8 Luxembourg 2,592 58,839
9 Netherlands 38,438 56,574
10 Switzerland 19,020 54,573
Total all countries 688,376 2,784,470
of which: APEC 344,122 1,289,807
ASEAN10 42,277 111,291
EU28 169,603 958,971
OECD 450,222 2,033,465

(a) Foreign investment in Australia: level of investment (stocks) as at 31 December 2014, by selected country and country group.
(b) Ranked on level of total investment in Australia.
(c) Includes portfolio investment.

Last Updated: 26 November 2015
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