SHADOW Agriculture Minister Joel Fitzgibbon has questioned the whereabouts of the Coalition government’s promised register of foreign investment in agricultural land and agribusiness assets.
The register was recommended in a Senate report tabled in June last year which said foreign investment was encouraged in Australian agriculture.
But the Rural Affairs Committee also found Australia's current foreign investment framework - as per the Foreign Acquisitions and Takeovers Act and related regulations and policy - was “significantly deficient in effectively managing a number of key challenges facing Australian agriculture”.
It backed the register as a method to overcome deficiencies in the quality and transparency of information about current and future trends for foreign ownership of Australian agricultural assets.
The Foreign Investment Review Board (FIRB) was also criticised for lacking transparency and scrutiny around potential foreign investments, in applying the national interest test.
It also recommended changes to lower the FIRB threshold rate of $248 million to scrutinise potential investments saying only a very small number of agricultural acquisitions were currently covered.
Mr Fitzgibbon said the foreign investment register was a key election promise that hasn’t “manifested”.
“I’ve heard Barnaby Joyce waffling on, saying it’s with Treasury, which is code for ‘Treasury is making it difficult’,” he said.
“But the rule of measure for a cabinet minister is to find a way to get those things done and here we are a year on and we’ve seen nothing - no draft, no public consultation, nothing.
“I know Treasury often pushes back on these things but people want transparency.
“People are generally welcoming of foreign investment in our agricultural sector but they just want full disclosure and better understanding of where it is and who’s making that investment.”
The Senate Committee also recommended the government commission an independent and wide-ranging review of Australia's foreign investment regulatory framework.
It also recommended the ABS not conduct future agricultural surveys on foreign investment, with the register to act as the primary mechanism for collecting and publishing information about foreign investment in Australian agriculture.
But Mr Joyce tempered concerns saying his government was currently negotiating with the States on the foreign investment register, to avoid bureaucratic duplication and red tape.
“We don’t want a federal and a State register,” he said.
“We want to reduce regulations so we don’t want three different registers.
“But I’ve always been concerned that 2.2 times the size of Victoria is now foreign owned.
“I think we have the right to ask questions when that amount of land is foreign owned and a lot of people now buy assets to be land banks, rather than to get a return on them.”
Mr Joyce said authenticity of the Coalition’s pre-election pledges on foreign investment policy can also be proved via statements contained in Free Trade Agreements signed since coming to office.
“Our policy is there to see in every agreement - one dollar for state owned enterprises, $15 million for private purchases of farm land and $53 million for agribusinesses,” he said of FIRB triggers for reviewing purchases.
Liberal Democratic Party Senator David Leyonhjelm said the foreign investment register’s delay was insignificant because it was flawed policy to start with.
“The idea that you should know how much foreigners own doesn’t help with clarity,” he said.
“If foreign ownership increases from 2 per cent to 4 per cent some people would say it’s a crisis because the amount has doubled and others would say ‘4 per cent is bugger all, why should we be concerned about it?’
“How does that help? It doesn’t advance the debate at all.
“The debate is about whether there’s any problem for Australia’s national interest in having some foreign investment and if there is a problem, at what level does that emerge.
“But I’ve not seen anything in the last 200 years of Australia’s history, where foreign investment has caused a problem.
“So why do people who argue that case insist it’s going to happen now?”
Mr Fitzgibbon said Tony Abbott’s election night statement that Australia is now, “open for business” under the new government, has been contradicted by lack of action on agricultural policy over the past 12 months.
He said for Australian agriculture, the Coalition’s slogan has been ‘closed for business’ until the Agricultural White Paper is delivered.
In accusing the government of post-election policy lag, Mr Fitzgibbon was also critical of Mr Joyce’s handling of the attempted $3.4 billion takeover bid for GrainCorp by US multinational Archer Daniels Midland (ADM).
He said Mr Joyce “behaved appallingly” over the proposed deal, blocked by Federal Treasurer Joe Hockey shortly after coming to office last year.
“He played the crowd and the crowd doesn’t always know what’s in its best interests,” he said.
Mr Fitzgibbon said growers in NSW were now lamenting lost investment in the ageing grains supply chain, given ADM had pledged $250 million as part of the deal.
“I think a lot of growers and industry players who were opposed to the bid would now have a different position which would maybe allow Barnaby Joyce more space to do what I believe he really should have been done and that is to allow that takeover,” he said.
“But he played to the crowd and allowed politics to be put in front of good public policy and in doing so he sent all the wrong messages to the international capital markets and investors.”
Senator Leyonhjelm said if the Treasurer’s decision on the controversial ADM deal was being made now, rather than shortly after the last election, it would be unchanged.
“I still think the Nats would wet their pants over it,” he said.
“They just don’t want foreigners owning significant agribusiness firms or farms – it’s an emotional thing, not rationale economics.”
Joyce: we've done well
Federal Agriculture Minister Barnaby Joyce rated the Coalition government’s overall performance a seven out of 10 for achieving outcomes for agriculture, after 12 months in office.
“I think we’ve done pretty well,” he said. “I’d give it a seven out of 10 - why - because you can always do jobs better.”
Mr Joyce attributed the seven out of 10 score to the government delivering two drought support packages, a turnaround in sheep, cattle and dairy prices, live cattle exports hitting record numbers and $300 million on the table to start work on the inland rail line that will be a vital asset for moving agricultural product to ports more efficiently.
“We’re actually doing things,” he said.
FTA wins, FDI fails: Leyonhjelm
Liberal Democratic Party Senator David Leyonhjelm rated the government’s agricultural performance four out of 10, boosted by its work concluding FTAs with Japan and Korea.
But he marked the government down because of the ADM-GrainCorp decision which he described as being “dreadful” and due to the majority of work on the FTAs being done before coming to office one year ago.
Senator Leyonhjelm said the government had no business messing in the ADM bid.
“They don’t own GrainCorp; it’s owned by shareholders and they voted to accept the ADM offer and that should be the end of it,” he said.
“Private property is private property so it’s not their business.
“And GrainCorp is not a bloody monopoly anyway - anyone can look at the ports and see that.
“In some areas, if you want the shortest route to market you could argue there’s only one option which is GrainCorp but if you’re prepared to send your grain a little bit further there are options.”