A better regime for foreign investment and macroeconomic policies

Comments on John Denton and Peter Drysdale "Time to re-position Australia’s foreign investment regime", 14/06/2015

There are clear benefits to integrate policies toward and implementation of foreign investment into a seamless regime, such as a ministerial-level Foreign Investment Council as the author nicely proposed. Another approach may be a national economic management council which integrate economic policies and implementation at the national level and the tasks proposed for the foreign investment council forms a part of it.

At macro level, economic textbooks say there should be optimal combination of fiscal and monetary policies to achieve most desirable outcomes. But in reality, it does not seem such coordination of those two classical Macroeconomic policies really exists in many countries. So there is a gap between theory and practice there.

Now if we treat foreign investment as something similar to government spending but differing in degrees of the host country’s direct control in the GDP equation (as part of the investment - I component), the council proposed by this article’s authors may naturally fall into the macroeconomic policies area. As a result, a national economic council would be handy to include foreign investment coordination in its tasks.