The 'national interest test' for foreign investment in Australia is entirely discretionary, according to one specialist in the area.

Treasurer Joe Hockey made several pointed comments on Wednesday that he would "not be bullied" into disallowing or approving the proposed sale of GrainCorp to American giant Archer Daniels Midland. He said he would be motivated only by what was in the "national interest".

But a decision based on the national interest is ultimately a political decision, according to Duncan Bedford, a partner at Brisbane law firm McCullough Robertson, who advises foreign entities looking to invest in Australia.

He says the Foreign Investment Review Board assesses potential sales based on a set of criteria including the transaction's potential impact on national security, the tax system and the Australian community, as well as an enterprise's 'corporate character'.

Those criteria are broad, political and completely subjective, Mr Bedford says.

"The Foreign Investment Review Board sets out these criteria that are to be considered, but doesn't specify what weight is to be given to each of them," he said.

"It doesn't specify that those are the only considerations to be taken into account. Each of these considerations is extremely broad and can be interpreted in any manner that the decision maker, in this case the Treasurer, wants.

"Essentially the list of criteria is a way of saying the Treasurer will consider everything that is relevant in determining whether something is in the national interest.

"That's pretty broad, and after considering those criteria, he'll generally be able to come out with the answer that he wanted to come out with."

Mr Bedford says the subjectivity of the national interest test isn't necessarily a bad thing' though.

"It's probably an appropriate outcome in a democracy, where a government has been elected and presumably their decisions reflect the general perception within the Australian community."

Other countries, including New Zealand, also have similar national interest tests for foreign investment. Mr Bedford says Australia could learn from those systems, which are significantly more transparent.

"The decisions of the [Australian] Foreign Investment Review Board are not published as a general rule, and their reasoning is not known.

"So where decisions are rejected, which happens very rarely, it's very difficult to get an idea of what the reasons were, particularly where conditions are imposed on particular acquisitions. That's not generally published either," he said.

"Countries such as New Zealand do publish their reasoning, and it is a lot more transparent.

"Although the decision is always going to be a political one, or a subjective one, where the reasoning is openly and reviewed, the process will be more trusted and will become less of a disincentive for investment."