Australia was “unsettled” before the British arrived and owes its existence to Britain’s “form of foreign investment” in the land, Tony Abbott has said.



The prime minister delivered the keynote address to the Australian-Melbourne Institute on Thursday evening and during a question and answer session he was asked about foreign investment in real estate.

He said the issue was contentious and emotional and likened it to perhaps wanting to be able to sell your own house to a foreign investor, “but if my neighbour wants to sell his place [then] foreign investment might be the last thing we want”.

“Our country is unimaginable without foreign investment,” Fairfax Media reported Abbott saying. “I guess our country owes its existence to a form of foreign investment by the British government in the then unsettled or, um, scarcely settled, Great South Land.”

The Q&A followed a speech during which Abbott pushed for greater investment in infrastructure.

He said the country had undergone a decisive and cultural shift against reform but his government would change that, as the gap between infrastructure need and infrastructure spending was about $1tn globally.

“A lot else has happened since the election but the boats are no longer coming, an infrastructure boom unmatched in our history is shortly to begin,” he said. “The budget is now projected to be in balance, and the carbon tax is likely to be gone within a week.”

Professor Michael Dodson, director of the National Centre for Indigenous Studies at the Australian National University, said Abbott’s comments were “an unfortunate slip of the tongue”.



“It’s a typical European colonial thing to say and it probably has its origins in the way in which history, for too long, has been taught in this country,” Dodson told Guardian Australia.



“The British view that the place was terra nullius and unsettled still lingers in the minds of people like our prime minister, I’m afraid. It’s very disappointing. I mean he corrected himself, but even ‘scarcely settled’ isn’t quite accurate either because some areas were heavily settled,” he said.



Dodson, who was also Australia's first Aboriginal and Torres Strait Islander social justice commissioner at the Human Rights Commission, said the lie of terra nullius as the foundation for colonisation is still being perpetuated, despite the high court overturning it in the historic Mabo ruling in 1992.



Dodson said he did find the other portion of Abbott’s comments – that the British arrival was a “form of foreign investment” – highly offensive.



"Foreign investment of troops who slaughter the bloody populace," he said.



"The first encounter James Cook had with Aboriginal people was to shoot this ancestor of the Sydney people in the back. This hankering for a mythical past is disturbing.”

The Labor senator and first female Indigenous parliamentarian Nova Peris condemned Abbott's comments and said they set back efforts to have Aboriginal and Torres Strait Islander people recognised in the constitution.

“British settlement was not foreign investment. It was occupation,” Peris said in a statement.

“Current foreign investment in Australia can be defended, promoted and debated without such insensitive statements from the prime minister.”

The opposition leader, Bill Shorten, labelled the remarks “offensive”.

The prime minister’s actions on Indigenous Australia are just as concerning as his words,” Shorten said.

“The PM cut $500m from Indigenous programs in his very first budget. The prime minister’s Indigenous cuts aren’t just unfair, they will rob the next generation of Indigenous kids of a fair future.”

Abbott has been a driver for a referendum on the recognition of Indigenous people in the constitution, and plans to make good on his election commitment of spending one week a year in an Aboriginal community when he visits Arnhem land in September.

"With the help of the Yothu Yindi Foundation I will be alongside Yolngu men and women and will take part in practical activities that are of immediate benefit to the community while listening to community members about government policy and practical solutions," Abbott said last month.

In the lead-up to December’s G20 summit in Brisbane, Abbott called for other governments to “get the settings right” for private business to play a bigger part in infrastructure investment.

“Governments can’t finance the world’s infrastructure needs on their own – as we have found in Australia and seen elsewhere,” he said. “The private sector must do more.”

Abbott also signalled further welfare reforms “based on the work of Patrick McClure and Andrew Forrest”.

He also said Australia had had six years of “economic drift”, but went on to laud the 23 years of continuous growth.

“It is a record unparalleled in our history and currently has few equals in the world,” he said.