Treasurer Jim Chalmers will make it easier for trusted foreign entities to invest in Australia as he all but confirms he will block the takeover of a pharmaceutical company by a US company deemed not in the national interest.
The government says the next stage of reforms to the nation's foreign investment review scheme will strengthen and accelerate the process as it seeks to increase overseas capital flowing into Australia from friendly countries and boost scrutiny of riskier investors.
Dr Chalmers unveiled a proposal for low-risk investments to gain access to an automatic approvals process at a speech in Sydney on Friday.
The government has already introduced changes to the way foreign investments are determined by the Foreign Investment Review Board, including streamlined assessments for investors with a proven track record, such as Canadian pension funds.
"Our vision is for Australia to be the destination where global investment flows first and grows fastest," Dr Chalmers told investors at the Citi A50 Australian Economic Forum.
"When you reconsider and redeploy the capital you manage, our objective is for Australia to be the most obvious and most compelling place to put it to work."
However, scrutiny will be further tightened where risks are higher, such as Chinese investments in critical minerals infrastructure.
Dr Chalmers said the changes would ensure investment was being made in the national interest.
To that end, he all but killed off US pharmaceutical giant Cosette's $672 million proposed takeover of ASX-listed Mayne Pharma on Friday.
Cosette had earlier threatened to close Mayne's Adelaide-based manufacturing plant, putting about 200 jobs at risk.
"The workers of South Australia are our focus," the treasurer said in a statement after sending a letter to Cosette advising he was considering prohibiting the acquisition.
"We'll always go into bat for Australian workers and that's what we've done.
"Safeguarding Australian jobs is a central feature of the government's economic agenda and it was a central consideration in this case."
In a statement to the ASX on Friday, Mayne Pharma said it did not consider it commercially rational to close the Adelaide site and had consistently communicated this to Cosette.
"Mayne Pharma notes that no final decision has been made the treasurer and Cosette remains obligated under the Scheme Implementation Deed ... to use its best endeavours to obtain the treasurer's approval of the scheme," the statement read.
The company's shares plunged in Friday's trade, closing the day 31 per cent lower at $4.25.
Boosting foreign investment is seen as a key way to repair Australia's ailing productivity performance, which has fallen in the past decades in line with lower investment in capital such as tools and manufacturing equipment.
Dr Chalmers has previously called for more investment to boost capital deepening - increasing the amount of equipment available to each worker - which he calls one of the big challenges to productivity.
Following its economic reform roundtable in August, the government has begun rolling back red tape, launched an Investor Front Door pilot and started consultation on changing the super performance test to encourage more investment.
"We're open to going further, which is why I'm releasing a new consultation paper for a second tranche of foreign investment reforms today," Dr Chalmers said.
"Our goal is a FIRB regime that is much stronger where risks are high, and much faster where risks are low."
The government will consult on a new automatic approvals process that would allow low-risk actions from trusted investors to require notification but not sign-off.
The board would retain the power to review cases and call them in if needed.
Additional measures include reducing reporting requirements, better managing approved investments and ensuring more decisions are made by the statutory deadline.
"We're also looking to tighten our scrutiny of investments in sensitive sectors, strengthen enforcement powers and ensure non-compliance is penalised," Dr Chalmers said.
"And we'll be consulting on a new enforceable undertakings power and conditions to make sure investment is in the national interest.
"This will make the FIRB regime stronger and faster."