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‘The great wait’ - How will the upcoming federal election impact your FIRB application?

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With another Federal Election looming on the horizon in 2025, we are expecting that the processing time of FIRB applications will be impacted, potentially (with other factors considered) even up to mid-2025.

In this Alert, we will provide an overview on what we expect the coming few months to look like, what factors should be taken into consideration, and how this will impact the various types of FIRB applications.

Pre-election and the Caretaker Period

The Caretaker Period begins at the time Parliament is prorogued (meaning that session of Parliament has ended) and the House of Representatives is dissolved. The Governor-General, on advice from the Prime Minister, prorogues the Parliament and dissolves the House of Representatives usually at the same time, and issues the writs for the Federal Election. This is done after the Prime Minister calls the Federal Election. The Caretaker Period then continues until the election result is clear or, if there is a change of government, until the new government is appointed.

Assuming the Government intends to hold a standard election (being the House of Representatives and half of the Senate), the election is expected to occur by 17 May 2025 to satisfy the half-Senate election timing. The Governor-General will typically issue the proclamation dissolving the House – and therefore begin the Caretaker Period - between 4 and 9 weeks before the election date.

  • If the Federal Election is held in May, the Caretaker Period could begin as early as mid-to-late March, but more likely around mid-April.
  • If the Federal Election is held in March, the Caretaker Period could begin in late January – right when the Government, many public servants and others return from their January holidays. (The Western Australian state election on 8 March may impact March timing for a Federal Election.)
  • The Federal Election could be held in April but given the Easter and ANZAC Day public holidays as well as school holidays fall in April, the possible election dates are limited.

What can happen during the Caretaker Period?

The usual business of government and ordinary matters of administration continue as per usual during the Caretaker Period.

What can’t happen during the Caretaker Period?

It is a longstanding practice that the Government will follow the ‘caretaker’ conventions. Broadly, under the conventions, incumbent governments avoid:

  • making major policy decisions that are likely to commit the incoming government;
  • making significant appointments; and
  • entering major contracts or undertakings,

unless they are willing to consult the opposition party on such matters (a thought that, surprisingly enough, has not seemed appealing to incumbent governments).

Post-election considerations

The outcome of the election will directly impact the progress of applications as part of the overall transition process. In summary:

  • If the current government wins the election, then business as usual typically begins within a week or so of the election result. However, if the Treasurer or any of the Treasury portfolio ministers change, there will likely be a delay of 2 weeks or so as the new ministers are briefed on their portfolios (and try to comprehend the complex world of FIRB if they are new to this area).
  • If there is a change of government, there will necessarily be a change of Treasurer and Treasury portfolio ministers (unless the new government is a minority Labor government with third-party support and changed Treasury portfolio ministers). There will likely be a delay of around a month, however the timing is hard to predict. The new ministers will need to be brought up to speed, and the new government will need to consider its approach to FIRB decisions going forward, including determining which decisions will be delegated from the Treasurer to a junior minister or senior Treasury or ATO staff.

How will my FIRB application be impacted?

While we are seeing significant improvements in the timeframes for non-sensitive FIRB applications, those considered to be sensitive or ‘high risk’ by FIRB may be compounded by delays potentially lasting until June 2025 (considering they are already subject to the notoriously long FIRB assessment period.).

Other proposals may also be delayed but likely to be less prolonged.

Decisions can be made on most FIRB applications – typically where the decision maker is not the Treasurer himself, but rather a senior Treasury officer, ATO officer or junior portfolio minister. However, the junior ministers’ availability may be more limited during this period, as they will be focused on campaigning in their own electorates and elsewhere.

The caretaker conventions usually mean the most sensitive proposals – such as those relating to critical infrastructure and critical minerals, as well as high-profile, high-value proposals – are highly unlikely to be decided during the Caretaker Period with decisions likely to be postponed to after the election. However, this depends on the Treasurer’s assessment (with advice from Treasury) of which foreign investment proposals would constitute a ‘major policy decision’.

Other upcoming sources of delay

We can also anticipate overall further across-the-board delays, with the following considerations:

  • Christmas / New Year Shutdown – FIRB (in addition to the broader public service) has an annual shutdown from around 12pm on 24 December 2024 to 2 January 2025. (KWM will be back on deck on 8 January 2025.)
  • January Holidays – There are often staff shortages at FIRB, and throughout the Government more broadly, including FIRB’s consult agencies, as case officers, senior staff and decision-makers often take leave during January for the Australian summer. A backlog of delayed FIRB decisions generally develops at the end of every January that can take until late February / March to clear.
  • Chinese New Year - Just as Australia returns from leave and the Australia Day long weekend in 2025, it will be Chinese New Year, the first day being 29 January 2025, with those celebrating usually taking 1-2 weeks before and after. This may delay the progress of FIRB applications if applicants and/or advisors are on leave during this period.
  • 2025-26 Federal Budget – It is common, but not mandatory, for the Government to release a Budget around the calling of the Federal Election. The Budget often acts as the informal beginning of the Election campaign and is typically filled with lots of incentives for key voters. The Budget can impact the availability of the Treasurer and potentially some Treasury staff, resulting in delays to receiving decisions on FIRB applications.

Summary

  • FIRB applications are expected to be impacted by across-the-board delays because of the timing and mechanisms of the upcoming Federal Election and subsequent period.
  • Complex and sensitive applications are going to be significantly impacted in comparison to the more routine ones.
  • Investors should take care to consider how these delays might affect their commercial deals and reach out for additional information.
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