Australia set to approve veto powers over foreign deals amid China tensions

The law allows the federal government to block any pact between Australian states and a foreign government, such as Victoria’s belt and road deal with China

PM Morrison has stressed the legislation is not aimed at any country but it is widely seen by analysts as directed at Beijing

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Relations between Australia and China have soured since Canberra called for an international probe into the origins of the coronavirus pandemic.

Published: 12:51pm, 3 Dec 2020Updated: 5:26pm, 3 Dec 2020

Corrected [4:30pm, 3 Dec, 2020]

[4:30pm, 3 Dec, 2020]
An earlier version of this Reuters article incorrectly stated that Australia had approved the new law.

Australia’s parliament is set to pass legislation that gives the federal government power to veto any agreement struck with foreign states, a move likely to anger China and intensify a bitter diplomatic spat between the two countries.

The law allows the Commonwealth to block any agreement between Australian states, councils or institutions and a foreign government, such as a controversial 2018 deal between the state of Victoria and China. An earlier version of this Reuters article incorrectly stated that Australia had already approved the new law.

“Australia’s policies and plans, the rules that we make for our country are made here in Australia according to our needs and our interests,” Prime Minister Scott Morrison told reporters in Canberra.

Morrison has stressed the law is not aimed at any country but it is widely seen by analysts as directed at China. It would allow the foreign minister to veto any agreements with foreign governments if they “adversely affect Australia’s foreign relations” or are “inconsistent with Australian foreign policy”.

“It creates another trigger for the relationship to deteriorate,” said Melissa Conley Tyler, research fellow at the Asia Institute of the University of Melbourne.

Speaking to the Post, she said she welcomed parliament taking more time to decide if the proposed law “was really in Australia’s best interests”.