The benefits of foreign investment

Australia is resource-rich, has a highly skilled workforce, and enjoys an international reputation for innovation. To make the most of these advantages, Australia needs international capital to supplement domestic savings.

Foreign investment helps Australia reach its economic potential by providing capital to finance new industries and enhance existing industries, boosting infrastructure, productivity, and employment opportunities in the process.

The higher growth supported by foreign investment pays dividends for all Australians by increasing tax revenues to Federal and State Governments, and increasing the funds available to spend on hospitals, schools, roads and other essential services.

Foreign investment has other benefits beyond injecting new capital. By bringing in new businesses with connections in different markets it opens up additional export opportunities, boosting our overall export performance. It also encourages competition and increased innovation by bringing new technologies and services to the Australian market.

Why does Australia need foreign investment?

Foreign investment fills the gap between what Australia saves and invests every year.

Total investment is funded by domestic savings and foreign investment makes up the difference.

At end 2016, total investment flows stood at $422 billion, comprising $377 billion in domestic savings and $45 billion in foreign investment.

Last Updated: 3 June 2016