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A Chinese-Australian funds manager has slammed changes to the foreign investment review framework, arguing they will damage the Australian economy and its managed funds businesses.
Atlas Advisors Australia said the new temporary FIRB rules would curb the managed funds industry's ability to support Australia's economic recovery.
It comes following Treasurer Josh Frydenberg's announcement on March 30 that Australia will extend the time frame for decisions on foreign investments to up to six months, in a bid to protect the national interest.
Slashing the threshold for foreign investment proposals from $1.2 billion to $0, Frydenberg said the changes would give the government greater scrutiny and visibility over foreign investment proposals.
The move will protect Australia's businesses from being acquired at the cheap by foreign investors, which occurred during the Global Financial Crisis more than a decade ago.
At the time, Frydenberg denied that the move was directed at China.
Atlas Advisors Australia executive chair Guy Hedley said government's FIRB reforms, which require every foreign investment proposal to be scrutinized by the Foreign Investment Review Board, could reduce interest in Australia as a destination for investment.
"The reforms importantly aim to safeguard the national interest against opportunism amidst the COVID-19 crisis," he said.
"However, it also creates needless complications for managed funds that invest broadly across different industries and sectors on behalf investors in areas that require capital support.
"In today's fast-moving business environment, where innovation is key to survival, enterprise cannot wait unreasonably long periods of time for the delivery of outcomes."
Hedley said the new regulations could stifle business opportunities at a time where the country is desperate for economic growth.
"These measures will leave thousands of Australian startups, emerging, listed and private companies stranded without critical funds needed to drive business continuity and change," he said.
"Many of these companies will inevitably collapse, forgoing billions of dollars' worth of tax and employment generating business opportunities."
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