Australia to seek veto powers on all public deals with foreign nations

While Australia's Prime Minister Scott Morrison will not name China specifically, the new law is likely to further sour bilateral ties. PHOTO: EPA-EFE

SYDNEY (REUTERS) - Australia's Prime Minister Scott Morrison will announce on Thursday (Aug 27) legislation giving the federal government new powers to review and cancel any agreements that local authorities and public institutions make or have made with foreign governments.

If approved by Parliament, the law will give the federal government a veto over any deals made between state and territory governments, local councils, and public universities and foreign administrations.

While Mr Morrison will not name China specifically, the new law is likely to further sour bilateral ties, and comes amid growing concerns over links between Australian institutions and Beijing.

"It is vital that when it comes to Australia's dealings with the rest of the world, we speak with one voice and work to one plan," he will say on Thursday, according to extracts of a speech seen by Reuters.

The new legislation excludes commercial corporations and state-owned enterprises.

Under the new law, the country's foreign minister would be able to cancel any agreements made by local institutions if they "adversely affect Australia's foreign relations" or are "inconsistent with Australian foreign policy", a source familiar with the details of the plan told Reuters.

The legislation will also be retrospective, the source said.

Local authorities and public universities will have to inform the federal government of all deals with foreign nations within six months of the legislation becoming law.

If Australia's foreign minister thinks the deals contravene the law, lawmakers will have the power to cancel them, the source said.

The changes threaten a suite of deals signed by Australian institutions in industries ranging from education to health and tourism, the source said.

China, Australia's largest trading partner, buys more than one-third of Australia's total exports, and sends more than a million tourists and students there each year.

It comes after Australia in 2017 introduced sweeping powers aimed at preventing external interference in domestic politics, which then Prime Minister Malcolm Turnbull said was driven by Chinese meddling.

That was widely seen as a turning point in the Australian-China relationship, which has reached its lowest point in decades during the coronavirus pandemic, straining two-way trade.

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